Opinion of Mr Advocate General Reischl

Mr President,

Members of the Court,

The references for a preliminary ruling in the cases joined by order of 21 November 1979 which I deal with in this opinion concern the interpretation of tariff subheading 20.06 BI of the Common Customs Tariff which under Regulation No 950/68 as amended by Regulation No 1/74 (official Journal No L 1 of 1 January 1974, p. 1) has the following wording:

It is of relevance for imports from Yugoslavia of cherries — Morello cherries and sweet cherries — effected in September and November 1974 by the appellants in the main action. This fruit was intended for the chocolate industry, packed in casks and put up in Yugoslavia in a mixture of alcohol, flavouring and water or of alcohol and water, so as to preserve it during transportation. According to the order making the reference the first case concerned goods containing 70% fruit and 30% juice of which 12% by weight was alcohol. In the second case the mixture of alcohol and water was said to have an ethyl alcohol content of 15.9% by volume and in the third case an ethyl alcohol content of 12.5 to 16.3% by weight.

The importers are firmly of the opinion that the goods come under tariff subheading 08.11.:

All the importers have brought actions before the finance courts against these decisions.

In the first case it was argued that the said regulation was unlawful for exceeding the legislative scope existing under Regulation No 97/69 of the Council of 16 January 1969 (Official Journal, English Special Edition, 1969 (I), p. 12) for classification decisions on the Common Customs Tariff. There followed the first proceedings for a preliminary ruling as a result of a decision by the Finanzgericht [Finance Court] Berlin of 25 March 1975 (Case 37/75, Bagusat KG v Hauptzollamt Berlin-Packhof, judgment of 11 November 1975 [1975] ECR 1339) in which the following questions were raised:

The Court, in its judgment of 11 November 1975, ruled as follows:

On the basis of that ruling the action was dismissed by the Finanzgericht Berlin.

In the second and third cases, too, the plaintiff took the view that Regulation No 1709/74 was unlawful because in practice it led to an alteration of the wording of the Common Customs Tariff and, as Regulation No 97/69 makes provision for classification decisions only in particularly difficult technical fields, there was no need for its adoption. At the same time it criticized the preliminary ruling in Case 37/75, contending that the facts were slightly different in that case. However, the actions in these cases, too, were dismissed by the Finanzgericht of Hamburg and Munich without any new reference for a preliminary ruling being made.

The plaintiffs thereupon turned to the Bundesfinanzhof [Federal Finance Court] to appeal on a point of law. The appellant in the first case relied primarily on a judgment of the Bundesfinanzhof of 16 January 1973 which also concerned a tariff classification dispute about the same type of goods; it contended that the classification unheld by the Finanzgericht actually infringed tariff heading 08.11. Moreover, Regulation No 1709/74 was unclear in many respects; also the preliminary ruling in Case 37/75 was not clear about the classification made by the Finanzgericht and since it did not examine all the important points in the proceedings it did not clear up the matter once and for all and did not therefore dispel all doubt. The appellant in the other proceedings, in the firm belief that it was how the product tasted to the ultimate consumer, and therefore its marketability, which mattered, relied inter alia upon a report by the Gesellschaft für Marktforschung [Association for Market Research], previously submitted to the Finanzgericht, which stated that a representative consumer survey showed that the cherries in question were not suitable for immediate consumption by the ultimate consumer. Therefore classification under heading 20.06 was ruled out. Furthermore the case which led to the reference being made in Case 37/75 was different in some points from the case in hand. The issue in that case concerned the addition of flavouring which was not involved here; the goods to be classified in this case were, moreover, put up in alcohol which was regarded as impure by German rules and this no doubt affected their suitability for consumption.

When considering the cases the Bundesfinanzhof came to the conclusion that the preliminary ruling in Case 37/75, given in answer to excessively generallyphrased questions put by the Finanzgericht Berlin, was not a reliable authority for the proceedings before it. Since tariff subheadings 20.Ó6 B I and 08.11 made a distinction between provisional preservation and preservation, the important criterion to distinguish their scope being suitability of the goods for immediate consumption, it seemed conceivable that not all cherries put up in a mixture of water and alcohol, irrespective of the type and strength of the preservative, came under tariff subheading 20.06 B I and that consequently Regulation No 1709/74 was not intended to cover all such cherries. Mindful not least of its 1973 judgment which I have mentioned and which held that such goods were to be assigned to tariff heading 08.11 on the basis of a report by the Staatliche Chemische Untersuchungsanstalt [National Chemical Research Institute], Munich, (which said that the cherries were only provisionally preserved and not suitable for immediate consumption), the Bundesfinanzhof decided to comply with the appellants' request and refer new questions to the Court of Justice for a preliminary ruling. This was done by orders of 24 April and 26 June 1979 which contained the following questions:

My views on those questions are these:

1. It really must seem astounding that the Bundesfinanzhof has asked for a direct construction of tariff subheading 20.06 B I as regards a particular type of goods. For Regulation No 1709/74 of the Commission was adopted pursuant to Article 3 of Regulation No 97/69 which permits the adoption of rules for the classification of goods in the Nomenclature of the Common Customs Tariff. It gives the tariff classification for the very same goods described by the Bundesfinanzhof and this contains an interpretation of the said tariff subheading. Since the regulation is directly binding upon institutions and courts it cannot easily be circumvented so long as it is not annulled or declared invalid. However, that has not been the case hitherto; indeed, as I said, it was expressly held in the judgment in Case 37/75 that no factor had been disclosed such as to affect the validity of Regulation No 1709/74.

2. But let us first turn to the construction of Regulation No 1709/74 itself to see if it contains anything which suggests limits upon the tariff classification. This seems to me to be appropriate in view of the observations made by the appellants, which concern two main points.

3. I come now to the interpretation of tariff subheading 20.06 B I requested by the Bundesfinanzhof which might in certain circumstances lead to the conclusion that, if it is to retain its validity, Regulation No 1709/74 must be interpreted restrictively, or, if this approach should not prove possible, might enable it to be said that the regulation is to be regarded as invalid, contrary to the ruling given in Case 37/75.

4. Consequently it must be concluded that the attempt by the appellants to demonstrate irrefutably that the products imported by them must be classified under 08.11 has not succeeded because a factual element essential to that tariff heading is absent. Therefore only the residual tariff heading 20.06 B I (e) is relevant for the classification of such goods. Should there still be doubt about the expression preserved — because no problem can be perceived with other expressions: Fruit, containing ... added spirit since nothing is said about alcoholic content — it must at least be admitted that prepared fruit may also be included thereunder since there is nothing in the tariff subheading to indicate that prepared means finally prepared and therefore also suitable for consumption.

5. The questions of the Bundesfinanzhof may therefore be answered as follows :

1 Translated from the German.

2 Translator's Note: This word appears as consumption in the English version of the Notes, but it may also denote enjoyment.