JUDGMENT OF 4. 7. 1978 — CASE 5/78 MILCHFUTTER v HAUPTZOLLAMT GRONAU
In Case 5/78 REFERENCE to the Court pursuant to Article 177 of the EEC Treaty by the Finanzgericht (Finanze Court) Münster for a preliminary ruling in the proceedings pending before that court between
THE COURT (Second Chamber) composed of: M. Sørensen, President of Chamber, P. Pescatore and Lord Mackenzie Stuart, Judges, Advocate General: F. Capotorti Registrar: A. Van Houtte
gives the following
JUDGMENT
Facts and Issues
I — Facts and written procedure
II — Written observations submitted to the Court
III — Oral procedure
Decision
Questions 1, 2 and 3
The fourth question
Costs
I —. Facts and written procedure
1. Is the milk product content which results from the application of Article 11 (1) of Regulation (EEC) No 823/68 of the Council of 28 June 1968 and of Article 1 of Regulation (EEC) No 1216/68 of the Commission of 9 August 1968 decisive with regard to the amount of the monetary compensatory amounts which it was necessary to impose during the period from January to March 1975 on compound feedingstuffs coming under tariff subheadings 23.07 B I a 3 or 23.07 B I a 4 of the Common Customs Tariff which were imported from the Netherlands into the Federal Republic of Germany?
2. If Question 1 is answered in the negative:
3. If Question 2 is answered in the affirmative:
4. Within the context of the system of monetary compensatory amounts, is the tariff classification made by the exporting Member State of the European Communities binding upon the importing Member State?
II —. Written observations submitted to the Court
(a). In the plaintiff's view the answer to the question whether the milk product content which results from the application of Article 11 (1) of Regulation No 823/68 and of Article 1 of Regulation No 1216/68 determines the rate of the monetary compensatory amounts applicable in intra-Community trade is in the negative.
(b). The second question should be answered in the affirmative. The Court of Justice has ruled that in the interests of legal certainty and of administrative procedures the decisive criteria for the classification of products in the Common Customs Tariff are to be their objective properties and characteristics, subject to any special indications or circumstances which imply that other criteria are to be used. Chapter 23 of the Common Customs Tariff and in particular the Additional Notes to that chapter contain no indication of an exceptional classification.
(c). The determination of the milk product content of feeding-stuffs containing milk powder in substitution for other protein should be made on the basis of principles and procedures recognized in chemistry and chemical technology. In the present instance the use of methods of analysis harmonized within the context of the Council Directive No 70/373/EEC of 20 July 1970 on the introduction of Community methods of sampling and analysis for the official control of feeding-stuffs (Official Journal, English Special Edition 1970 (II), p. 535) enable it to be shown clearly and irrefutably that the animal feeding-stuffs involved in the present dispute contain less than 75 % of milk products: the total sugar content, to the exclusion of lactose, fat and starch, is greater than 25 % and consequently the milk product content must necessarily be less than 75 %.
(d). The exporting Netherlands company obtained the refund to be granted within the context of the system of monetary compensation for tariff subheading 23.07 B I a 3 of the Common Customs Tariff, while for the levying of compensation at the frontier the German customs authorities took as a basis tariff subheading 23.07 B I a 4, for which a considerably higher compensation is laid down in the relevant provisions. The Commission is aware of these difficulties: it modified Regulation No 1380/75 by Regulation No 1556/77 of 11 July 1977 (Official Journal L 173, p. 10), which in particular requires the persons concerned to submit, when all the customs formalities for clearance into free circulation are completed, all information necessary for the calculation of the monetary compensatory amount, That regulation does not call in question the principle that the decisive classification is that by the exporting country. That principle is justified by the fact that the check in the exporting country is much more precise and effective than the check carried out in the importing Community country, the fact that in application of Article 2a of Regulation No 974/71 the monetary compensatory amount may be paid by the exporting Member Sute and the fact that it appears desirable within the context of the scheme of monetary compensatory amounts to apply the principle which is to be found in particular in the decided cases of the Court of Justice relating to public and veterinary health inspection questions that the analyses carried out in the exporting country are decisive.
(a). The distinction drawn in the tariff classification of the different compound feeding-stuffs under tariff heading 23.07 is an attempt to reconcile contradictory administrative and economic requirements with the particular nature of those products and the limited possibilities offered by techniques of analysis for determining that nature.
(b). In order to guarantee legal certainty and the uniform application of Community law it is desirable not only that the customs authorities of a Member State should treat the same product in the same way when it is imported from a third country and when it is imported from other Member States, but also that the customs authorities of the various Member States should classify the same product in a uniform manner on importation and on exportation. The Commission has not yet succeeded in ensuring that each Member Sute recognizes the tariff classification made in another Member Sute as binding. At present each Member Sute retains the power to determine itself the correct tariff classification of products imported into its territory or exported therefrom.
III —. Oral procedure
1. By an order of 29 September 1977 which was received at the Court on 5 January 1978 the Finanzgericht Münster referred to the Court for a preliminary ruling, pursuant to Article 177 of the EEC Treaty, questions relating in particular to the interpretation of Regulation No 823/68 of the Council of 28 June 1968 determining the groups of products and the special provisions for calculating levies on milk and milk products (Official Journal, English Special Edition 1968 (I), p. 199) and Regulation No 1216/68 of the Commission of 9 August 1968 laying down the method for determining the lactose content of compound feeding-stuffs imported from third countries (Official Journal, English Special Edition 1968 (II), p. 421) in connexion with the application of subheadings B I a 3 and B I a 4 of tariff heading 23.07 of the Common Customs Tariff.
2. It appears from the order making the reference that the plaintiff in the main action imported into Germany from the Netherlands between January and March 1975 several consignments of compound feeding-stuffs under tariff subheading 23.07 B I a.
3. On the basis of Article 11 (1) of Regulation No 823/68, according to which the milk product content of products falling within tariff subheading No ex 23.07 B shall be determined by applying a coefficient of 2 to the lactose content per 100 kg of the product in question, the German customs authorities classified the product under subheading B I a 4 of heading 23.07, distinguished by a milk product content by weight of not less than 75 % and subject to a higher monetary compensatory amount than products under subheading B I a 3.
4. The plaintiff in the main action challenged that classification, arguing that as it is contained in a regulation relating to the calculation of levies on products from third countries the coefficient laid down by Regulation No 823/68 is not applicable to intra-Community trade.
5. In order to resolve that problem the Finanzgericht asked four questions worded as follows:
6. The questions contained in the order making the reference should be answered in the light of the provisions of the regulation which forms the basis for and the general framework of the system of compensatory amounts, namely Regulation No 974/71 of the Council of 12 May 1971 on certain measures of conjunctural policy to be taken in agriculture following the temporary widening of the margins of fluctuation for the currencies of certain Member States (Official Journal, English Special Edition 1971 (I), p. 257).
7. Under Article 1 (1) of that regulation Member States are to be authorized to:
8. Those provisions thus involve a general reference to the rules relating to the common organization of agricultural markets as regards the determination of the products subject to the system of monetary compensatory amounts.
9. In view of that general reference no exception can be made in respect of the application, to a particular product, of a specific rule relating to classification, such as that contained in Article 11 of Regulation No 823/68, or of Regulation No 1216/68 of the Commission.
10. The argument derived by the plaintiff in the main action from what it regards as the protective nature of the coefficient laid down by Article 11 of Regulation No 823/68 must also be rejected as, according to the sixth recital in the preamble to that regulation, the only aim of the coefficient is to emphasize the proportion, in compound feeding-stuffs consisting of cereals and milk products, of milk ingredients because they have a much greater effect on price formation than cereal ingredients.
11. Nor, finally, can any argument be derived from the provisions and structure of Commission Regulation No 1463/73 of 30 May 1973 laying down detailed rules for the application of monetary compensatory amounts (Official Journal L 146, p. 1) since that regulation, in accordance with the provisions of Article 6 of Regulation No 974/71 on which it is based, principally lays down the detailed financial and administrative rules for the application of the system of compensatory amounts.
12. Support may be found for these conclusions in the fact that, in the absence of any express provision, it would be inappropriate for the headings of the Common Customs Tariff to be applied in different ways to the same product depending on whether they are used for the classification thereof in connexion with the levying of customs duties, the application of the system of the common organizations of the market or the application of the system of monetary compensatory amounts.
13. The answer to the first question should be that the method of calculating the milk product content which results from the application of Article 11 (1) of Regulation No 823/68 of the Council is decisive with regard to the amount of the monetary compensatory amounts which must be charged on compound feeding-stuffs coming under tariff subheadings 23.07 B I a 3 or 23.07 B I a 4 of the Common Customs Tariff which were imported from the Netherlands into the Federal Republic of Germany during the period from January to March 1975.
14. In these circumstances it is not necessary to reply to the second and third questions.
15. The fourth question asks whether, within the context of the system of monetary compensatory amounts, the tariff classification made by the exporting Member State is binding upon the importing Member Sute.
16. On the basis of Community law as applicable at the time of the dispute there was no obligation on the relevant authorities of one Member State to accept a tariff classification decision made in respect of a given product in another Member State.
17. The answer to the fourth question should therefore be that within the context of the system of monetary compensatory amounts, the tariff classification made by the exporting Member State was not binding upon the importing Member State at the time of the dispute.
18. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable.
On those grounds, THE COURT (Second Chamber) in answer to the questions referred to it by the Finanzgericht Münster by order of 29 September 1977, hereby rules:
1 The method of calculating the milk product content which results from the application of Article 11 (1) of Regulation No 823/68 of the Council of 28 June 1968 determining the groups of products and the special provisions for calculating levies on milk and milk products is decisive with regard to the amount of the monetary compensatory amounts which must be charged on compound feeding-stuffs coming under tariff subheadings 23.07 B I a 3 or 23.07 B I a 4 of the Common Customs Tariff which were imported from the Netherlands into the Federal Republic of Germany during the period from January to March 1975.
2 Within the context of the system of monetary compensatory amounts, the tariff classification made by the exporting Member State was not binding upon the importing Member State at the time of the dispute.