JUDGMENT OF 29. 5. 1974 — CASE 185/73 HAUPTZOLLAMT BIELEFELD v KÖNIG
In Case 185/73 Reference to the Court under Article 177 of the EEC Treaty by the Bundesfinanzhof for a preliminary ruling in the action pending before that court between
THE COURT composed of: R. Lecourt, President, A. M. Donner and M. Sørensen, Presidents of Chambers, R. Monaco, J. Mertens de Wilmars, P. Pescatore, H. Kutscher, C. Ó Dálaigh and A. J. Mackenzie Stuart (Rapporteur), Judges Advocate-General: A. Trabucchi Registrar: A. Van Houtte
gives the following
JUDGMENT
Facts
I — Facts
II — Summary of the grounds of the order for reference
Concerning the first and second questions
Concerning the third question
III — Procedure
Written observations submitted to the Court
A — Observations of the Commission of the EEC
As to the first question
As to the second question
As to the third question
B — Observations of the Council
As to the first question
As to the second question
As to the third question
C — Observations of the United Kingdom
As to the second question
D — Observations of Ireland
As to the second question
Oral procedure
Law
As to the first question
As to the second question
As to the third question
Costs
I —. Facts
A —. Spirits (other than those of heading No 22.08)
B —. Compound alcoholic preparations (known as concentrated extracts)
C —. Spirituous beverages:
1. The common market shall extend to agriculture and trade in agricultural products. Agricultural products means the products of the soil, of stockfarming and of fisheries and products of first-stage processing directly related to these products.
2. Save as otherwise provided in Articles 39 to 46, the rules laid down for the establishment of the common market shall apply to agricultural products.
3. The products subject to the provisions of Articles 39 to 46 are listed in Annex II do this Treaty. Within two years of the entry into force of this Treaty, however, the Council shall, acting by a qualified majority on proposal from the Commission, decide what products are to be added to this list.
4. The operation and development of the common market for agricultural products must be accompanied by the establishment of a common agricultural policy among the Member States.
1. Is EEC Regulation No 7a/59 of 18 December 1959 (OJ 1961, p. 71) valid, in spite of being issued only after the expiration of the power conferred in Article 38 of the Treaty establishing the European Community?
2. If Question 1 is answered in the affirmative: Was the Council of the European Economic Community permitted to add spirits to the list in Annex II to the Treaty establishing the European Economic Community without regard to its alcoholic strength?
3. If Questions 1 and 2 are answered in the affirmative: How are the products under tariff headings Nos 22.09-A-II and 22.09-C-V-b to be distinguished from one another?
II —. Summary of the grounds of the order for reference
1. The time limit fixed in Article 38 (3) had already expired when EEC Regulation No 7a/59 was published on 30 January 1961. The fact that the Regulation was to take effect retroactively from 31 December 1959, a date when the Council was still competent to adopt the measure in question, is irrelevant.
2. Only those products corresponding with the definition of agricultural products given in Article 38 can be added to the list.
III —. Procedure
A —. Observations of the Commission of the EEC
(i). ethyl alcohol, undenatured, of a strength of less than 80o
(ii). brandies, liqueurs and other beverages
(iii). compound alcoholic preparations for the manufacture of beverages
A —. Ethyl alcohol, undenatured, of a strength of less than 80o
B —. Compound alcoholic preparations
C —. Spirituous beverages.
B —. Observations of the Council
C —. Observations of the United Kingdom
D —. Observations of Ireland
1. By Order of 16 October 1973 of the Bundesfinanzhof, filed at the Registry on 3 December 1973, a preliminary ruling was requested of the Court as to the validity and interpretation of EEC Regulation No 7a/59 of the Council, bearing the date 18 December 1959 (OJ 1961, p. 71), as well as to the interpretation of tariff subheadings Nos 22.09-A-II and 22.09-C-V-b of the Common Customs Tariff.
2. During the oral procedure the Council adduced arguments from the Acts relating to the accession to the Communities of the Kingdom of Denmark, of Ireland and of the United Kingdom, in order to challenge the jurisdiction of the Court to pronounce upon the validity of Regulation No 7a.
3. The Acts relating to the Accession of the new Member States have as their essential purpose the extension to those States of the entirety of Community law in force at the time of accession.
4. Accordingly, it would appear that the preliminary objection of the Council must be rejected.
5. The first question asks whether Regulation No 7a of the Council, adding certain products to the list in Annex II to the Treaty, is valid, although not adopted until after the expiry of the period of validity of the power conferred by Article 38 of the Treaty establishing the EEC.
6. According to the wording of the second sentence of Article 38 (3), within two years of the entry into force of this Treaty, however, the Council shall, acting by a qualified majority on a proposal from the Commission, decide what products are to be added to the list in Annex II to the Treaty.
7. For present purposes, the Court is not called upon to examine the compatibility with general principles of law of the provision in Article 2 (1) of the Regulation, under which the Regulation was to enter into force on a date prior to its publication, this question not having been raised by the national court.
8. Accordingly, examination of the first question does not reveal any elements such as to affect the validity of Regulation No 7a of the Council.
9. The second question asks whether the Council was permitted to add ethyl alcohol to the said list without regard to its alcoholic strength.
10. The national court, forming the view that only those products could be added to the list which complied with the definition of agricultural products given in the first paragraph of Article 38, expresses doubt as to whether ethyl alcohol can come within this definition, by reason of the fact that alcohols of a strength of less than 80o would, in practice, be subjected after their distillation to an additional process, that is, dilution with water.
11. The intervening governments deny that the Council had, in any circumstances, acting within the scope of Article 38 (3), the option of adding alcohol to the list in question.
12. According to the definition in Article 38 (1), agricultural products are the products of the soil, of stockfarming and of fisheries and products of first-stage processing directly related to these products.
13. The definition of agricultural products, placed at the head of the Title devoted to agriculture, would be devoid of practical meaning if it were not to be interpreted, as regards the power of the Council to fill the gaps with which Article 38 (3) is concerned, in the light of the aims of the common agricultural policy and with reference to the products with which the authors of the Treaty considered that policy to be concerned.
14. There is no reason to consider that ethyl alcohol falls within this category.
15. Accordingly, the fact that the Council added ethyl alcohol to the list in Annex II, without regard to its alcoholic strength, does not affect the validity of Regulation No 7a.
16. The third question asks how the products listed under tariff subheadings Nos 22.09-A-II and 22.09-C-V-b are to be distinguished from one another.
17. Heading No 22.09 in the Brussels Nomenclature covers both undenatured ethyl alcohols of a strength of less than 80o, and brandies, liqueurs and other spirituous beverages whatever their degree of alcoholic strength.
18. In the interests of legal certainty and the simplification of administrative procedures, it is the characteristics and objective properties of products which, as a general rule, afford the decisive criterion for their classification in the Common Customs Tariff.
19. Accordingly, ethyl alcohol, under subheading No 22.09-A, is distinguished from the products under subheading No 22.09-C-V by the presence in those products of flavouring substances or distinctive properties of taste.
20. The expenses incurred by the Government of Ireland and the Government of the United Kingdom, by the Council and by the Commission of the EEC, which have submitted observations to the Court, are not recoverable, and as these proceedings are, insofar as the parties to the main action are concerned, a step in the action before the national court, costs are a matter for that court.
On those grounds, THE COURT in answer to the questions referred to it by the Bundesfinanzhof by order of 16 October 1973, hereby rules:
1 Examination of the questions referred does not reveal any elements such as to affect the validity of Regulation No 7a of the Council.
2 Ethyl alcohol, under subheading No 22.09-A-II of the Common Customs Tariff, is distinguished from the products under subheading No 22.09-C-V-b by the presence in those products of flavouring substances or distinctive properties of taste.
1 Translator's Note: This appears in the French version of the CCT as follows: Alcool éthylique non dénaturé de moins de 80o; (ethyl alcohol, undenatured, of a strength of less than 80o).