Opinion of Mr Advocate General Reischl

Mr President,

Members of the Court,

The proceedings on which I give my opinion today concern once again the question how cherries put up in a mixture of alcohol and water are to be classified under the Common Customs Tariff. That question has already arisen in Case 37/75 Bagusat KG ν Hauptzollamt Berlin-Packhof [1975] ECR 1339, judgment of 11 November 1975, and in Joined Cases 87/79 Gebrüder Bagusat KG ν Hauptzollamt Berlin-Packhof, 112 and 113/79 Einkaufsgesellschaft der Deutschen Konservenindustrie mbH ν Hauptzollamt Hamburg-Waltershof and Hauptzollamt Bad Reichenhall [1980] ECR 1159, judgment of 20 March 1980.

In those cases, however, the imports were effected after a regulation prescribing a tariff classification (Regulation No 1709/74, Official Journal L 180 of 3 July 1974, p. 15) had been adopted by the Commission, whereas this case concerns imports effected before that date.

The plaintiff in the main proceedings received a binding customs classification notice dated 16 August 1968 from the Oberfinanzdirektion München [Regional Finance Office, Munich] issued pursuant to Article 23 of the German Customs Law. According to that notice mahaleb cherries imported from Yugoslavia put up in a solution having a spirit content of 13.4% and a sugar content of 9.3% had to be classified under tariff subheading 20.06 B I (e) 1 (Fruit otherwise prepared or preserved, whether or not containing added sugar or spirit: ... B. Other: 1. Containing added spirit: ... (e) Other fruits: 1. With a sugar content exceeding 9% by weight...).

The plaintiff appealed against that classification to the Bundesfinanzhof [Federal Finance Court] and succeeded in obtaining by a judgment of 16 January 1973 the annulment of the classification notice. On 9 May 1973 a new classification notice was issued to the plaintiff according to which, as the judgment of the Bundesfinanzhof made clear, the goods were to be classified under tariff subheading 08.11 D (Fruit provisionally preserved (for example, by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions), but unsuitable in that state for immediate consumption: ... D. Other).

During the period of validity of the first classification notice from 16 August 1968 to 24 April 1973 the plaintiff had cleared for home use through various customs offices 111 consignments of mahaleb and sweet cherries with or without stones put up in a mixture of alcohol and water and imported from Yugoslavia. The plaintiff declared the alcohol content to be between 14 to 16% by volume and in exceptional cases up to 23% by volume. According to the findings of the customs authorities, which were based on numerous tests, the alcohol content fluctuated between 10.8 and 15% by weight and in some cases was as high as 18.1% by weight; the sugar content was sometimes less and sometimes more than 9% by weight. In each case the goods were classified under tariff heading 20.06 by the customs offices, as the classification notice valid at that time provided. The plaintiff lodged objections against 23 such customs notices; the remaining notices are no longer appealable.

After the new classification notice had been issued, the plaintiff, relying on Article 94 of the Reichsabgabenordnung [German Revenue Code] which grants discretion to amend notices of assessment, sought rectification of all the notices of assessment issued between 16 August 1968 and 24 April 1973. However, the customs offices amended only those notices against which objections had been lodged before the judgment of the Bundesfinanzhof of 16 January 1973 had been delivered. They refused to amend the other notices, even after objections had been lodged against their refusal to do so.

The matter then came before the Finanzgericht München. In its judgment of 24 February 1975 it annulled the notices rejecting the applications for amendment in so far as the periods of limitation in respect of the duties fixed by the notices of assessment had not yet expired. The Bundesfinanzhof, before which an appeal against that judgment was brought, went still further in criticizing the attitude of the customs authorities. In its judgment of 26 April 1979 it held that once a customs classification notice has been successfully challenged, the notices of assessment issued on the basis of that notice are not required to be challenged in order to be amended; they may still be amended even if those assessments have acquired force in law. That is also the case as regards the rectification of assessments if rectification is not sought until after the period of limitation for the claims for duty has expired. It therefore overturned the judgment of the Finanzgericht and referred the case back to that court for reconsideration. In so doing it also stressed the importance of determining whether the customs classification notice is binding and thus whether the classification notice was the basis for the classification which must be assumed to be the case if the imported goods were covered by it and the customs offices through which they were cleared were bound by the classification notice.

When reconsidering the case the Finanzgericht München stressed that, since strict law applies to the actual fixing of duty, for the purposes of the application of Article 94 of the Reichsabgabenordnung it is of importance whether the original notices of assessment should be regarded as being incorrect, and thus whether the goods were classified incorrectly by the customs authorities. In that respect the Finanzgericht stated that it is not bound by either the judgments of the Bundesfinanzhof of 16 January 1973 and 26 April 1979 or by the customs classification notice of 9 May 1973. Nor is it possible to fall back upon Regulation No 1709/74 to answer that question because that regulation did not enter into force until after the relevant date of importation of the goods. On the other hand, in view of the ruling on classification contained in Regulation No 1709/74, with which the judgment of the Bundesfinanzhof of 16 January 1973 is in conflict, the line of demarcation between tariff headings 08.11 and 20.06 for the period before Regulation No 1709/74 was adopted is not clear.

The court therefore stayed the proceedings by an order of 4 July 1980 and pursuant to Article 177 of the EEC Treaty referred the following question to the Court for a preliminary ruling:

How was tariff heading 08.11 of the Common Customs Tariff as regards the characteristics provisionally perserved and unsuitable in that state for immediate consumption to be interpreted and distinguished from tariff heading 20.06 before the entry into force of Regulation (EEC) No 1709/74 of the Commission of 2 July 1974?

My views on that question are as follows :

1. In its application of 13 October 1980 the plaintiff in the main action informed the Court that it had lodged an objection with the Bundesfinanzhof against the order of the Finanzgericht making the reference to this Court. It therefore submitted at the beginning of its written submissions that the proceedings should be stayed until the Bundesfinanzhof has ruled on its objection.

2. Likewise the plaintiff has evidently not maintained the argument also put forward in its written observations that the reference for a preliminary ruling is inadmissible at the moment and will continue to be inadmissible for as long as no ruling is given on the question (which anticipates the question as to classification) whether the second classification notice has retroactive binding effect from 16 August 1968 and thus has to be applied to the imports in question in this case.

3. In the oral proceedings the plaintiff returned to the argument which I have just mentioned but this time in another guise.

4. It is therefore necessary to consider how tariff heading 08.11 of the Common Customs Tariff should have been construed as regards the characteristics provisionally preserved and unsuitable in that state for immediate consumption before Regulation No 1709/74 entered into force-and how it was to be distinguished from tariff heading 20.06 which brings me to the question put by the Finanzgericht. The plaintiff has expressed the view that before the adoption of Regulation No 1709/74, which according to the case-law has no retroactive effect because it creates new law, various interpretations — it even speaks of several correct interpretations — of tariff heading 08.11 were possible. If that were not the case the regulation would not have been necessary and it would not have been stipulated that it was to enter into force 21 days after its publication. If, however, the well-known Explanatory Notes of the Customs Cooperation Council are applied to that period it appears quite possible for the goods in question to be classified under tariff heading 08.11, which the Bundesfinanzhof also accepted in its judgment of 16 January 1973. That may be seen, the plaintiff argues, from that part of the Explanatory Notes which says that for tariff heading 08.11 to apply fruit should have been only provisionally preserved for the purposes of transport, be mainly intended for use as raw materials in the food industry and usually be put up in casks or skips.

5. In my opinion, therefore, the question asked by the Finanzgericht München should be answered to the effect that before Regulation No 1709/74 entered into force the application of tariff heading 08.11 depended on whether fruit had been provisionally preserved and was unsuitable in that state for immediate consumption, it not being possible to consider the second condition fulfilled if the fruit could be consumed as it was without risk to health.

1 Translated from the German.

2 Translator's note: This word appears as consumption in the English version of the Common Customs Tariff and of the Explanatory Notes of the Customs Cooperation Council, but it may also denote enjoyment.