JUDGMENT OF 29. 5. 1979 — CASE 165/78 IMCO — MICHAELIS v OBERFINANZDIREKTION BERLIN

In Case 165/78 REFERENCE to the Court under Article 177 of the EEC Treaty by the Bundesfinanzhof [Federal Finance Court] for a preliminary ruling in the action pending before that court between

THE COURT (Second Chamber) composed of: Lord Mackenzie Stuart, President of Chamber, P. Pescatore and A. Touffait, Judges, Advocate General: F. Capotorti Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

I — Facts and procedure

II — Observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

Question 1

Question 2

Question 3

III — Oral procedure

Decision

Cost

I —. Facts and procedure

1. The titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions.

2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as imported, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), imported unassembled or disassembled.

1. Is the application of the second sentence of Rule 2 (a) of the General Rules for the Interpretation of the Nomenclature of the Common Customs Tariff excluded in accordance with the third sentence of General Rule 1 if the Common Customs Tariff contains a special tariff heading for the parts of an unassembled or disassembled [zerlegt] article?

2. Must the second sentence of General Rule 2 (a) of the Common Customs Tariff be interpreted as meaning that, in addition to articles which are zerlegt it also covers articles which have not yet been assembled?

3. Does the second sentence of General Rule 2 (a) also apply if, when a number of parts of articles which have not yet been assembled is presented for customs clearance, it is uncertain which parts will be assembled with which other parts will be assembled with which other parts to form an article?

II —. Observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

1. The second sentence of General Rule 2 (a) for the Interpretation of the Nomenclature of the Common Customs Tariff also applies where the Common Customs Tariff contains a particular subheading for the parts which make up a complete article submitted unassembled or disassembled.

2. The second sentence of General Rule 2 (a) also applies to articles which have not yet been assembled.

3. Where separate parts are imported with a view to their assembly into complete articles the second sentence of General Rule 2 (a) applies even though it is not yet known at the time of importation which pieces will be assembled together.

III —. Oral procedure

1. By an order of 13 June 1978 which was received at the Court Registry on 31 July 1979, the Bundesfinanzhof submitted the following preliminary questions pursuant to Article 177 of the EEC Treaty:

2. These questions were raised in the context of a dispute concerning a binding opinion as to tariff classification (verbindliche Zolitarifauskunft), issued on the application of a German importer, the plaintiff in the main action, by the Oberfinanzdirektion Berlin, the defendant in the main action, setting out the headings of the Common Customs Tariff applicable to the articles described by the plaintiff as parts for Fisher Space Pen (caps, barrels and magazines) which it intended to import from the United States into the Federal Republic of Germany with a view to assembling them to form ballpoint pens.

3. The file establishes that the caps and barrels, in various finishes, contain all the parts of the device and are supplied in pairs, whilst the magazines, which are of different sizes and mixed colours, and are supplied in boxes of 600 units, are intended in part to be assembled with the caps and barrels with which they are imported and in part to supplement the plaintiff's stock of refill-magazines.

4. The defendant, in its classification opinion of 15 June 1977, stated that the caps, barrels and the corresponding number of magazines came under subheading 98.03 A of the Common Customs Tariff (Fountain-pens and stylograph pens and pencils (including ball-point, felt-tipped and fibre-tipped pens and pencils)) as parts for ball-point pens. For the classification of the caps and barrels and the corresponding number of magazines intended to be assembled in the form of ball-point pens, the defendant relied on General Rule 2 (a) of the Rules for the Interpretation of the Nomenclature of the Common Customs Tariff, which provides:

5. The plaintiff claims that all the above-mentioned articles constitute parts of ball-point pens for which the Common Customs Tariff contains a special subheading, namely subheading 98.03 C II, and that the second sentence of General Rule'2 (a) is therefore not applicable to them. The plaintiff relies on the German version of that provision which, unlike the versions in all the other languages of the Community, does not refer to the unassembled or disassembled article but only to the disassembled (zerlegt) article; the plaintiff therefore claims in particular that since the articles in question are assembled in the form of ball-point pens only after their importation into the Federal Republic of Germany they cannot constitute disassembled articles within the meaning of General Rule 2 (a).

6. The questions submitted by the national court require the following answer.

7. With regard to Question 1 and 2, tariff heading 98.03 covers on the one hand complete articles such as fountain-pens and stylograph pens, and, on the other, parts and fittings. It is clear from the general plan of that heading and from the very concept of parts and fittings that that tariff category implies the existence, even if.possibly only in the future, of a complete article of which such pieces are fittings or pans. It follows that, given the existence of the constituent parts, disassembled or not yet assembled, of a complete article, such parts cannot be classified as parts and fittings, within the meaning of subheading 98.03 C II, in respect of the complete article of which they form the totality of the components.

8. The reply to the first two questions submitted by the national court must therefore be that General Rule 2 (a) for the Interpretation of the Nomenclature of the Common Customs Tariff covers articles not yet assembled as well as articles which have been disassembled and to the extent to which the parts not yet assembled allow of the assembly of a complete article they are covered by the provisions governing that article even though the Common Customs Tariff contains a specific heading for parts and fittings.

9. Question 3 is intended to settle a special difficulty arising from the fact that in a large consignment of parts of a given article which have not yet been assembled there is no correspondence between any one of such parts and any other, so that it is impossible to establish which, when put together, will ultimately form the finished article.

10. In such a situation, since standard and interchangeable parts are concerned, only those parts which may be assembled to form the finished article must be classified under the tariff heading for that article whilst any surplus must thus be covered by the concept of parts and fittings. The reply to Question 3 must therefore be that when unassembled parts of an article are presented for customs clearance only any surplus parts not allowing of the assembly of a complete article are to be regarded as parts and fittings of the said article within the meaning of the Common Customs Tariff.

11. The costs incurred by the Commission of the European Communities, 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, in the nature of a step in the action pending before the Bundesfinanzhof, costs are a matter for that court.

On those grounds, THE COURT (Second Chamber) in answer to the questions submitted to it by the Bundesfinanzhof, by an order of 13 June 1978, hereby rules:

(1) General Rule 2 (a) for the Interpretation of the Nomenclature of the Common Customs Tariff covers articles not yet assembled as well as articles which have been disassembled and to the extent to which the parts not yet assembled allow of the assembly of a complete article they are covered by the provisions governing that article even though the Common Customs Tariff contains a specific heading for parts and fittings.

(2) When unassembled parts of an article are presented for customs clearance only any surplus parts not allowing of the assembly of a complete article are to be regarded as parts and fittings of the said article within the meaning of the Common Customs Tariff.

1 Translator's note: The English version of General Rule I (already quoted) is not a word-for-word translation of the German and in particular it contains no readily identifiable third sentence. A close translation of the German version of the rule would be as follows: The titles of Sections, Chapters and sub-Chanters are only for reference. The wording of the tariff headings and the Section or Chapter Notes and General Rules are decisive for the purposes of classification. The General Rules only apply however in so far as the tariff headings and Section and Chapter notes do not otherwise provide.

2 Translator's note: Since the words unassembled or disassembled in the English version are represented by the single German word zerlegt, which means primarily to dismount, disassemble or dismantle, to avoid the apparent absurdity of discussing whether unassembled or disassembled can also mean unassembled the German word zerlegt is retained in this translation where appropriate.