JUDGMENT OF 18. 2. 1976 —JOINED CASES 98 AND 99/75 CARSTENS KERAMIK v OBERFINANZDIREKTION FRANKFURT AM MAIN

In Joined Cases 98 and 99/75 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, H. Kutscher and A. O'Keeffe, Presidents of Chambers, A. M. Donner, J. Mertens de Wilmars, M. Sørensen and Lord Mackenzie Stuart, Judges, Advocate-General: A. Trabucchi Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts

I — Facts and procedure

II — Written observations submitted to the Court

Law

(I) — Porcelain or China

(II) — Pottery, other than porcelain or China

Costs

I —. Facts and procedure

1. In March 1972 the undertaking Carstens Keramik applied to the Oberfinanzdirektion (Regional Finance Office), Frankfurt am Main, for an official tariff classification opinion binding the administration in relation to vases approximately 15 centimetres high with a simple decorative shape imported from Rumania.

2. The tariff headings in question are subdivided as follows:

3. The Oberfinanzdirektion rejected the complaints of the importers who then instituted proceedings before the Bundesfinanzhof (Federal Finance Court) against these decisions rejecting their complaints.

4. It emerges from the two orders of the Bundesfinanzhof that the parties to the main action put forward in particular the arguments summarized hereunder:

5. In the orders for reference the Bundesfinanzhof particularly stated:

6. The orders of the Bundesfinanzhof were registered at the Court Registry on 11 September 1975.

II —. Written observations submitted to the Court

(1). Articles of furniture or of personal adornment which are obtained from simple brick clay, and which are porous, permeable, opaque, easily scratched with iron and whose earthy fracture sticks to the tongue must be classified under tariff heading 69.13 A as common pottery.

(2). Articles of furniture or of personal adornment which do not display the essential characteristics of common pottery or those which are required for classification under heading 69.13 B come under tariff heading 69.13 C. In this connexion it is of little importance whether the superior quality distinguishing the products in question from products of common pottery results from a specific process or from refining the body of the clay.

(1). Tableware of pottery made from simple brick clay which is porous, permeable, opaque, easily scratched with iron, having a rather coarse grain, a non-homogeneous structure and an earthy fracture which sticks to the tongue must be classified under tariff heading 69.12 A as a product of common pottery.

(2). Tableware of pottery which does not display the essential characteristics of common pottery or those characteristics required for classification under tariff headings 69.11, 69.12 B or 69.12 D come under tariff heading 69.12 C. In this respect it is of little importance whether the superior quality distinguishing the product in question from products of common pottery results from a particular preparation or from refinement of the body of the clay.

1. By two orders of 5 August 1975 which were received at the Court on 11 September 1975 the Bundesfinanzhof referred, under Article 177 of the EEC Treaty, questions on the interpretation of tariff headings 69.12 A, 69.12 C, 69.13 A and 69.13 C of the Common Customs Tariff (Regulation No 950/68 of the Council of 28 June 1968, JO L 172, 1968, as amended by subsequent regulations).

2. The questions put in the two cases should be joined for the purposes of the judgment since their essential subject-matter is the same.

3. It is clear from the orders for reference that the questions were put in the course of disputes relating to official tariff classification opinions, binding upon the administration (verbindliche Zolltarifauskunft) issued by a German customs authority in 1972 and 1973 with regard to the classification of certain ceramic products. In the first official opinion certain ceramic products were classified under heading 69.13 C of the Common Customs Tariff (hereinafter referred to as the CCT) as articles of furniture or ornaments of fine pottery (vases). In the second official opinion other products were classified under heading 69.12 C II as tableware of fine pottery. The importers of those products claimed that they should be classified respectively under heading 69.13 A and heading 69.12 A as products of common pottery.

4. In its question in Case 98/75 the Bundesfinanzhof asks how the expressions … other ornaments and … articles of furniture: … Common pottery and … other ornaments … articles of furniture: … Other in tariff headings 69.13 A and 69.13 C of the CCT are to be interpreted and distinguished from one another. In its question in Case 99/75 it asks how the expressions Tableware … of … common pottery and Tableware … of … fine pottery employed in tariff headings 69.12 A and 69.12 C are to be interpreted and distinguished from one another. The essential problem posed by these questions is thus the interpretation of the expression common pottery as a criterion for tariff classification.

5. The relevant tariff headings are subdivided as follows:

6. It must be considered in the first place whether the expression common pottery must be interpreted exclusively in terms of the nature of the raw material and perhaps of its preparation in the course of manufacture or whether account should also be taken of the objective characteristics of the product. It is clear from the orders for reference that the German customs authorities proceeded on the basis of an examination of the objective characteristics of the products, primarily the fineness of the grain and the homogeneity of the structure, whilst the plaintiffs in the main action relied on information from the producer countries according to which the objects were produced from natural raw materials which did not undergo any special preparation and whose fineness and homogeneity were due to the characteristics of the clays employed.

7. In the interests of legal certainty and of the administrative procedures, it is the characteristics and objective properties of products which afford the decisive criterion for their classification in the CCT unless there are special facts and circumstances implying other criteria.

8. The problem which presents itself is thus to ascertain the characteristics and objective properties of the relevant products which, for the purposes of their classification in the CCT, distinguish them from each other.

9. The German customs authority, and also the Commission, refer to an opinion issued in June 1972 by the Committee on Nomenclature, established by Regulation No 97/69 of the Council of 16 January 1969 on measures to be taken for the uniform application of the nomenclature of the Common Customs Tariff (JO L 14, 1969, p. 1) in reply to a question on the classification of ceramic wall tiles coming under tariff heading 69.08. This opinion classifies the products in question under subheading B II as other products and not under subheading B I (products of common pottery) stating that although the body displays a mixture of various grains and colours it has a high degree of homogeneity and regularity to obtain which the clay employed must have been subjected to a more intensive preparation, and in particular to a refining process, than that required in order to obtain products of common pottery. Nevertheless the plaintiffs in the main action claimed that the regularity and homogeneity of the product cannot serve as a criterion and in this respect they rely on the Explanatory Notes to the Brussels Nomenclature which define the term common pottery without recourse to the criterion of the homogeneity and regularity of the product.

10. With regard to Subchapter II of Chapter 69 of the CCT the Explanatory Notes to the Brussels Nomenclature contain the following general considerations:

11. It is established that in the absence of Community measures, of explanatory notes or other information supplied by the Community authorities, the Explanatory Notes to the Brussels Nomenclature are an authoritative aid to the interpretation of headings in the CCT. Nevertheless the question must be asked whether the abovementioned notes to the Brussels Nomenclature contain anything which enables a distinction to be drawn between the subheadings common pottery on the one hand and fine pottery and other kinds of pottery on the other hand. According to the wording of these notes they only refer to the distinction between the two headings 69.11 and 69.12, that is to say, between tableware of porcelain or china (including biscuit porcelain and parian) and tableware of other kinds of pottery and contains no reference at all to the subheadings of heading 69.12. This is no doubt to be explained by the fact that Chapter 69 of the Brussels Nomenclature does not contain subheadings. From this it must therefore be concluded that the Explanatory Notes to the Brussels Nomenclature do not preclude taking into consideration the fineness of the grain and the homogeneity of the structure for the purposes of distinguishing between the relevant subheadings of the CCT.

12. In addition, although the abovementioned opinion of the Committee on Nomenclature is not binding and relates to a heading which is not one of those, at issue in the present case, it represents a valid indication for the purposes of taking into consideration the fineness of the grain and the homogeneity of the structure of the product as objective characteristics of the product for the purposes of the interpretation and definition of the concept common pottery. This conclusion appears to correspond to the general scheme of the CCT in this sphere which presupposes that objects of little value are produced from common clay, in that it is the simplest raw material, whilst less coarse products are obtained from raw pottery material of higher quality. Although the German version of heading 69.12 does not perhaps bring out this difference clearly, other official versions leave no doubt in this matter since they employ expressions such as en poterie fine, fine pottery and di terracotta fine to describe products manufactured from a raw material other than common clay.

13. The plaintiffs in the main action have objected that the fineness of the grain and the homogeneity of the structure are criteria which are too vague and too subjective to be employed to draw a distinction between tariff headings.

14. Nevertheless in this connexion, as the Commission has stated in the course of the proceedings, in professional circles certain trends of opinion have appeared which may be of use to the customs authorities.

15. It must therefore be concluded that subheadings 69.12 A and 69.12 C (tableware of common pottery and of fine pottery) and subheadings 69.13 A and 69.13 C (statuettes and other ornaments of common pottery and of other kinds of pottery) must be interpreted and distinguished in terms of the fineness of the grain and the homogeneity of the structure so that a very fine and homogeneous product cannot be classified as a product of common pottery. It is for the national court to determine whether the articles in question in fact fulfil the conditions for classification under the one or the other subheading.

16. The costs incurred by the Commission which has submitted observations to the Court, are not recoverable. As these proceedings are, in so far 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.

THE COURT in answer to the questions referred to it by the Bundesfinanzhof by orders of 5 August 1975, hereby rules:

1 Translator's note: The words It may be glazed do not occur in the English version of the Explanatory Notes.

2 Translator's note: The words It may be glazed, more or less fine and stirred with water do not occur in the English version of the Explanatory Notes.

3 Translator's note: The words It may be glazed do not occur in the English version of the Explanatory Notes.

4 Translator's note: The words It may be glazed do not occur in the English version of the Explanatory Notes.