Report for the Hearing delivered in Case 43/87

I — Facts and procedure

Nicolet Instrument GmbH (hereinafter referred to as Nicolet), a German subsidiary of an American manufacturer, imported from the United States on 20 June 1980 an apparatus called Nicolet Data Acquisition and Processing System, model NIC-1180, intended for the Institute of Physical Chemistry of the University of Cologne.

In accordance with the normal practice in such cases, the Hauptzollamt (Principal Customs Office) Frankfurt-am-Main Airport initially granted exemption from customs duties.

However, following checks carried out by the Zolltechnische Prüfungs- und Lehranstalt (Customs Laboratory and Training College) in Munich, the Hauptzollamt Frankfurt am Main-Airport served an amended notice of assessment on 30 March 1981 claiming DM 6582.77 customs duty in respect of the apparatus in question, which was not regarded by the German authorities as being specifically intended for scientific research.

On 3 April 1981 Nicolet submitted a complaint, which was rejected on 16 July 1982 by the Hauptrollamt Frankfurt am Main on the basis of Commission Decision 80/716 of 7 July 1980 to the effect that the apparatus NIC-1180 was not scientific in character (Official Journal 1980, L 191, p. 31).

On 13 August 1982 Nicolet brought an action before the Hessische Finanzgericht (Finance Court, Hesse) against the decision rejecting its complaint, claiming in particular that the Commission had not consulted experts with the required qualifications to assess the scientific character of the apparatus in question and that Decision 80/716 did not contain a statement of the reasons on which it was based.

By order of 16 January 1984, which was received at the Court Registry on 30 January 1984, the Hessische Finanzgericht (Seventh Senate) asked the Court to give a preliminary ruling as to whether Commission Decision 80/716 was valid.

By judgment of 7 March 1985 (Case 30/84 [1985] ECR 771) the Court ruled that Commission Decision 80/716 was not valid and that the Commission should reexamine the file with a view to making a fresh assessment in accordance with the criteria which it had itself adopted and which were mentioned in the grounds of the judgment.

Following that judgment the Commission adopted on 18 October 1985 Decision C(85) 1661/2 in which it reaffirmed that the apparatus in question was not a scientific apparatus and could not therefore be imported free of import duties.

That decision was adopted on the basis of Council Regulation (EEC) No 918/83 of 28 March 1983 setting up a Community system of reliefs from customs duty (Official Journal 1983, L 105, p. 1) and Commission Regulation (EEC) No 2290/83 of 29 July 1983 laying down provisions for the implementation of Articles 50 to 59 of Council Regulation (EEC) No 918/83 (Official Journal 1983, L 220, p. 20).

Those two regulations repeal the Council and Commission regulations on the basis of which the Commission had adopted Decision 80/716, which had been the subject of Case 30/84. The new regulations, however, largely reproduce the terms of the repealed regulations, namely Regulation (EEC) No 1798/75 of the Council of 10 July 1975 (Official Journal 1975, L 184, p. 1), amended by Council Regulation No 1027/79 of 8 May 1979 (Official Journal 1979, L 134, p. 1) and Commission Regulation (EEC) No 3195/75 of 2 December 1979 (Official Journal 1979, L 316, p. 17), amended by Commission Regulation (EEC) No 2784/79 of 12 December 1979 (Official Journal 1979, L 318, p. 32).

Having regard to the new Commission decision, the German customs authorities continued to refuse to grant exemption from customs duties. Nicolet, for its part, reiterated against the new Commission decision the complaints which it had made in support of its action which culminated in the judgment of the Court in Case 30/84.

In the proceedings which ensured before the Hessische Finanzgericht (Seventh Senate), Nicolet claimed in particular that Commission Decision C(85) 1661/2 of 18 October 1985 was unfounded, inter alia because the expert's reports which it produced should have led to the conclusion that the apparatus in question was a scientific apparatus.

The Hessische Finanzgericht decided to refer the following question to the Court:

The order for reference was received at the Court Registry on 10 February 1987.

Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted by Nicolet, the plaintiff in the main proceedings, represented by Helmut Villaschek, Rechtanswalt und Notar, Frankfurt am Main, and by the Commission of the European Communities, represented by Jörn Sack, a member of its Legal Department, acting as Agent.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to ask Nicolet to reply in writing within one month to the question set out below and to ask the Commission to be accompanied by an expert at the hearing.

By decision of 15 October 1987, the Court, pursuant to Article 95 (1) and (2) of the Rules of Procedure, assigned the case to the Third Chamber.

II — Summary of the written observations submitted to the Court

Nicolet states that although the Commission decision contains a statement of the reasons on which it is based, the complaints made in Case 30/84 remain valid.

It claims in the first place that the contested decision was adopted in breach of the fundamental right to be heard embodied in paragraph 20 of the German Basic Law, in so far as the procedure followed by the Commission gave it no opportunity to express its views. Thus, the contested decision is in fact no more than an expert's report disagreeing with the expert's report prepared by Professor Bernhard Schrader of the University of Essen on 26 May 1982 and the observations expanding upon it of 29 November 1982, which Nicolet produced in Case 30/84.

Nicolet then claims that the contested Commission Decision, C(85) 1661/2, is also vitiated by the fact that it is retroactive in effect and incorrect on matters of substance.

Nicolet emphasizes that in the judgment in Case 30/84 of 7 March 1985, the Court found that the Commission had not carried out an analysis of the objective characteristics of the apparatus in question and had confined itself to general considerations which were applicable to all computers.

According to Nicolet, the same applies to the Commission's new decision. Moreover, the names of the experts consulted by the Commission are not given; it is therefore impossible to establish whether properly qualified scientists were involved in its preparation.

In any event, Nicolet, which refers on all points to the expert's reports prepared by Professor Schrader produced in Case 30/84, claims that the NIC-1180 dataprocessing system differs very clearly from the apparatus mentioned by the Commission by reason of its mechanical execution procedure and its internal programs... memorized on magnetic disks which cannot be amended and are not accessible to the customer. The NIC-1180 apparatus is a calculator intended to be used exclusively for function in the area of natural sciences, that is to say the recordal, processing and storage of mensurational values and control of experiments It is not suited to purely commercial use ... and displays the objective characteristics of an apparatus specially suited to scientific research.

Finally, Nicolet states that the contested decision contains no response to the considerations advanced by Professor Schrader, who freely expressed his own opinion and not that of Nicolet.

The Commission states that it adopted the contested decision in conformity with the examination required of it by the Court. It points out that when submitting its written observations in the present case, it checked whether its decision was justified in the light of the criteria expounded by the Court in its judgment of 21 January 1987 in Case 13/84 (Control Data v Commission [1987] ECR 275). It follows from that judgment that the Commission is required to interpret the rules on exemption from^ customs duties widely, particularly in the case of dataprocessing systems. The Commission states that whilst a check of that kind induced it to withdraw the contested decision in Case 26/87 Nicolet v Hauptzollamt Frankfurt am Main, judgment of 8 July 1987 (not published) it could not follow the same course in this case since a broad interpretation of the applicable rules did not permit the desired exemption from customs duties to be granted.

The Commission considers that Nicolet has merely put forward the same arguments as those relied upon in Case 30/84 and reiterated the terms of Professor Schrader's expert's report, without expressing its views on the observations made in that regard in Case 30/84 and set out in the contested decision. In particular it has not refuted the Commission's argument that the technical characteristics referred to by Nicolet are to be found in a large number of other computers which are mentioned in the contested decision and are certainly not scientific apparatus.

The Commission states, notwithstanding the risk of repeating itself, that both under Article 3 of Regulation No 1798/75 as amended by Regulation No 1029/79 and by virtue of the judgment of 29 January 1985 in Case 234/83 Gesamthochschule Duisberg [1985] ECR 327, an apparatus can only be imported free of customs duties if it achieves high-level performances which are not required for the execution of industrial or commercial operations. The NIC-1180 apparatus does not fall into that category.

The Commission points out firstly in that connection that, according to the description given by the manufacturer and once again annexed to its observations, the system in question has general purpose computing capabilities, that is to say it is like any other dataprocessing apparatus.

Secondly, it states that, contrary to the claim made in Professor Schrader's statement of 29 November 1982, the computer in question does not form an integral part of the scientific apparatus known as the Fourier-Transform Spectrometer. If the computer had actually been imported as part of that spectrometer and could be used only in conjunction with it, it could have been imported free of customs duty.

Professor Schrader, moreover, goes no further than to affirm that the apparatus in question is particularly suited to scientific research, whereas the applicable rules made the grant of exemption conditional upon its being mainly or exclusively suited to scientific activities.

The Commission also emphasizes that whilst a word-length of 20 bits is not generally required for commercial purposes, it nevertheless falls within the normal range of microcomputers, namely 32 bits, and is not designed to meet special requirements by enabling very precise or rapid results to be obtained. That degree of precision, which is generally chosen for reasons of convenience, may be useful both in industry and in scientific activities. According to the experts in the Member States, it is widely used in pharmaceutical analysis. However, according to the Commission, Professor Schrader has not shown in any way that the apparatus in question is essentially suited to purely scientific analysis of materials.

In the Commission's opinion, the apparatus in question does not have any significant technical characteristic enabling it to be regarded as a scientific apparatus. It therefore proposes that it should be stated in reply to the Hessische Finanzgericht that Consideration of the question submitted has disclosed no factor of such a kind as to affect the validity of Commission Decision C(85) 1661/2 of 18 October 1985.

III — The reply given by Nicolet to the question put to it by the Court

Question

For what reasons did Nicolet choose the NIC-1180 apparatus and not one of the models with comparable characteristics indicated in the contested decision of 18 October 1985?

Answer

Nicolet stated that it imported the NIC-1180 apparatus from the United States at the request of the Institut für Physikalische Chemie of the University of Cologne, which considered it to be specially suited to the purposes of its scientific research.

The apparatus was imported in 1980, that is to say when the models indicated in the contested decision were not yet on the European market.

Nicolet repeated its offer to prove all its statements by recourse to an expert.

1 Language of the Case: German.