Opinion of Mr Advocate General Capotorti

Mr President,

Members of the Court

1. This reference for a preliminary ruling concerns the interpretation of various aspects of Note 5 (B) to Chapter 85 of the Common Customs Tariff relating to electronic micro-circuits (micro-assemblies and integrated circuits). The purpose of that note is to facilitate the application of tariff subheading 85.21 D which covers electronic micro-circuits.

The facts of the case may be summarized as follows.

Between 1971 and 1973 and subsequently in 1977 Analog Devices, a Munich undertaking, imported into the Federal Republic of Germany various modules (electronic circuits) intended for automatic data-processing machines and other equipment. After checking the tariff classifications determined on the occasion of each importation, the German customs authorities decided to classify the goods imported in 1971 under subheading 85.21 C of the Common Costoms Tariff in force at the time, entitled Transistors and similar mounted semi-conductor devices, and to classify those imported subsequently under subheading 85.21 D of the Common Customs Tariff in force as from 1 January 1972.

The importing undertaking considered that classification to be inappropriate and submitted an objection to the decision of the customs authority, which was however dismissed. The company therefore instituted proceedings before the Finanzgericht München [Finance Court, Munich]. By order of 10 April 1980, that court stayed the proceedings and referred to the Court of Justice for a preliminary ruling a series of questions all of which concern the interpretation of Note 5 (B) to Chaper 85 of the Common Customs Tariff.

2. It is necessary to consider in the first place the tariff provisions most directly relevant for the purposes of this case.

3. The first question submitted by the Finanzgericht München concerns the concept of miniaturized discrete component which is used in two passages in Note 5 (B), namely in subparagraph (a) and in the last sentence of subparagraph (c). The order making the reference to the Court provides a clearer explanation of what the German court wishes to ascertain concerning the concept of discrete component: whether it covers exclusively components which are mounted as such separately (and provided with electrical connections), whether reference should be made to other criteria or whether, in addition to components consisting of a single electric circuit element, the same concept may also include circuits made up of several elements, such as monolithic integrated circuits or ceramic plates with a printed resistor network.

4. I have already stated that the first question submitted by the court hearing the main action concerns the concept of miniaturized discrete components. It therefore remains to be seen how the requirement relating to miniaturization, expressly laid down by subparagraphs (a) and (c) of Note 5 (B), is to be interpreted. In that connection, the court wishes to ascertain in particular whether miniaturization implies merely a reduction in size of the individual components or the arrangement of the components themselves in a certain density, whether reduction in size and density may be determined in absolute terms, and, finally, whether the degree of miniaturization which is customary in the electronics industry is to be taken into account.

5. The second question concerns certain expressions contained in subparagraph (a) of Note 5 (B) two of which refer to micro-assemblies (moulded module types, similar types) and the other to discrete elements (which are combined). Essentially, the processes concerned involve the inter-connection of different parts to form an electronic micro-circuit. The German court wishes to ascertain in the first place what moulded-module technology is to be understood as meaning: whether it is only the process whereby the individual components are moulded in a block and then connected up electrically or whether it includes processes whereby the components are mounted on a circuit board fitted with a printed circuit and the completed circuit is then put into a housing. The order making the reference to the Court also raises the problem of the significance of the components' dimensions, their arrangement on the carrier board, the manner in which the circuit is secured and how the elements are interconnected.

6. The third question concerns hybrid integrated circuits, which are covered by subparagraph (c) of Note 5 (B), and in particular the following sentence: in which ... elements, some obtained by ... semi-conductor technology ... are combined, to all intents and purposes indivisibly. In that connection, the first query raised by the court hearing the main action is whether elements manufactured by semi-conductor technology must in the main be non-discrete elements or whether hybrid circuits may, in addition to passive elements obtained by thin- or thick-film technology, also be made up exclusively of discrete (individual) components.

7. In conclusion, I propose that the Court should answer the questions formulated by the Finanzgericht München by order of 10 April 1980 by ruling that Note 5 (B) to Chapter 85 of the Common Customs Tariff must be interpreted in the following manner:

1 Translated from the Italian.