JUDGMENT OF 26. 2. 1980 — CASE 54/79 HAKOSCHUH v HAUPTZOLIAMT FRANKFURT AM MAIN-OST

In Case 54/79 REFERENCE to the Court under Article 177 of the EEC Treaty by the Hessisches Finanzgericht [Finance Court, Hessen] for a preliminary ruling in the action pending before that court between

THE COURT composed of: A. O'Keeffe, President of the First Chamber, Acting as President, A. Touffait (President of the Second Chamber), P. Pescatore, Lord Mackenzie Stuart, G. Bosco, T. Koopmans and O. Due, Judges, Advocate General: H. Mayras Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

I — Facts and written procedure

II — Written observations under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

III — Oral procedure

Decision

Costs

I —. Facts and written procedure

1. On 2 February 1978 Firma Hako-Schuh Dietrich Bahner (hereinafter referred to as Hako-Schuh), Augsburg, obtained customs clearance for and imported into the Federal Republic of Germany from Spain footwear consisting of fabric uppers and hempen rope soles covered at the toe, the joint and the heel with rubber. The rubber coating covers 57% of the sole.

2. The objection which Hako-Schuh made against this classification was rejected by the Hauptzollamt and the matter then came before the Hessisches Finanzgericht.

3. The order referring the matter to the Court was registered at the Court Registry on 9 April 1979. In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC written observations were submitted by Hako-Schuh, represented by E. Leierseder of the Munich Bar, by the Government of the French Republic, represented by P. Achard, Secretary General of the Interministerial Committee for Questions of European Economic Cooperation, acting as Agent, the Government of the Italian Republic, represented by A. Maresca, Ambassador, acting as Agent, assisted by A. Marzano, Avvocato dello Stato, and the Commission of the European Communities, represented by Manfred Beschel, a Member of the Legal Department of the Commission, acting as Agent. After hearing the report of the Judge-Rapporteur and the views of the Advocate General the Court decided to open the oral procedure without any preparatory inquiry.

II —. Written observations under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

III —. Oral procedure

1. By order dated 13 March 1979, received at the Court of Justice on 9 April 1979, the Hessisches Finanzgericht (Seventh Senate) put the following question to the Court under Article 177 of the EEC Treaty:

2. It appears from the particulars contained in the order making the reference that the footwear in question is espadrilles imported from Spain having fabric uppers and hempen rope soles which have a coating of rubber at the toe, joint and heel. The order of the German court also states that the rubber coating covers 57% of the sole. The importer's customs declarations stated that the footwear was footwear with outer soles of rope coming under heading 64.04, which, for imports from Spain, involves a duty of 2.8%. The customs office on the other hand considered that the footwear came under subheading 64.02 B involving for this importation a duty of 12%. The Hessisches Finanzgericht referred to the Court the aforementioned question for a preliminary ruling to settle the question of tariff classification.

3. Subheading 64.02 B of the Common Customs Tariff applies inter alia to footwear with only the outer soles of rubber or artificial plastic material and not having uppers of leather. Tariff heading 64.04 comprises footwear with outer soles of other materials such as twine or rope, paperboard, textile fabric, felt, straw etc. It thus appears from the structure of these two tariff headings that the distinctive criterion on which they are based relates solely to the material of which the outer sole of the footwear is made: rubber or artificial plastic material as regards heading 64.02 and material other than rubber, plastic, leather, wood or cork as regards heading 64.04.

4. As regards mixtures such as those in the present case, Rule A 3 (b) of the Rules for the Interpretation of the Nomenclature of the Common Customs Tariff provides that composite goods consisting of different materials which cannot be classified by reference to Rule 3 (a), which relates to the criterion of the most specific heading, shall be classified as if they consisted of the material... which gives the goods their essential character, in so far as this criterion is applicable. In the interests of legal certainty it is the objective characteristics and properties of products which, as a general rule, provide the decisive criterion for their classification

5. In the present case it is apparent from tariff headings 64.02, 64.03 and 64.04 that the distinction between products falling under one or the other heading depends basically only on the characteristics of the outer sole, that is to say the part of the footwear in direct contact with the ground. In accordance with this criterion of classification, the Explanatory Notes to the Common Customs Tariff provide as regards footwear of subheading 64.02 B:

6. As the Court stated in its judgment of 8 May 1974 (Case 183/73 Osram [1974] ECR 477) although the Explanatory Notes to the Common Customs Tariff cannot modify the text of that tariff, they nevertheless constitute an important factor in its interpretation enabling the scope of the various tariff headings or subheadings to be defined or clarified. In the present case it appears from the Notes that for footwear of heading 64.04 the coating of rubber or artificial plastic material covers the toe, the heel and possibly the middle part of the outer sole whereas for footwear classified under subheading 64.02 B it covers, apart from those places, all round the edge of the outer sole and moreover extends to the parts of the sole in direct contact with the ground. With these particulars the Notes in question thus confirm that the distinction between products of heading 64.02 and those of heading 64.04 is essentially based on the characteristics of the outer sole and that, in accordance with that criterion, the classification of footwear with rope outer series reinforced with rubber depends upon the extent and area covered by such reinforcement on the parts of the outer sole in direct contact with the ground. When the rubber reinforcement covers the surface of the outer sole to such an extent that the parts of the sole most subject to wear have a strength and durability comparable to that of a rubber sole, the reinforcement gives the sole to which it is applied characteristics and a function similar to that of a rubber sole and result in such a mixture being assimilated, for tariff purposes, to footwear of heading 64.02 of the Common Customs Tariff.

7. The national court refers in its question to footwear of the espadrille type having a fabric upper and hempen rope outer sole which has a coating of rubber at the toe, joint and heel which covers 57% of the total surface leaving 43% uncovered. Having regard to its extent in relation to the surface of the sole in direct contact with the ground, such rubber reinforcement gives the outer sole the characteristics and function of a rubber sole. Because of this it justifies assimilating the said footwear, for customs purposes, to footwear with outer soles of rubber within the meaning of heading 64.02.

8. For these reasons it is necessary to answer the national court that footwear with outer soles of hempen rope, 57% of the surface of which is reinforced with rubber at the toe, joint and heel, must be classified as footwear with outer soles of rubber under heading 64.02 of the Common Customs Tariff and, having regard to the material of which the uppers are made, under subheading B of that heading.

9. The costs incurred by the Government of the French Republic, the Government of the Italian Republic and the Commission of the European Communities, which have submitted written observations to the Court, are not recoverable. As the 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 national court, the decision on costs is a matter for that court.

On those grounds, THE COURT in answer to the question put by the Hessisches Finanzgericht by an order of 13 March 1979 hereby rules: