Opinion of Mr Advocate General Lenz delivered on 2 May 1990

1 Original language: German.

2 Council Regulation of 28 May 1980 on the valuation of goods for customs purposes; OJ L 134, p. 1.

3 The Bundesfinanzhof, allowing that the magnetic tapes might not have formed part of the total price, bases its questions to the Court on the premise that the total price did include sums relating to the carrier media (magnetic tapes). Accordingly, the questions will be answered on that basis. The plaintiff's submissions at the hearing that the magnetic tape* were not purchased but were transferred for a limited period of use cannot be taken into consideration in the proceedings before the Court of Justice.

4 Sec ludgmeni of the Court in Case 1/77 Boich v Hauptzollamt Hildesheim [1977] ECR 1473

5 OJ English Special Edition 1968(1), p 170

6 The Convention entered into force on 28 Julv 1953

7 See Articles 5 and 6 of the 1950 Convention

8 Study No 3. issued in French and English in the series Customs ValuationA'aleur en Douane, by the Customs Cooperation Council

9 See the Commission's answer to questions on that subject from the Court of Auditors; Annual Report of the Court of Auditors concerning the financial year 1983, OJ 1984 C 348, p. 193.

10 Agreement of 12 April 1979, reprinted in OJ 1980 L 71, p. 107.

11 OJ L 71, p. 1.

12 See Article 3(1) of Regulation No 1224/80 and Article 1 of the 1979 Agreement.

13 The Commission and the plaintiff before the Bundesfinanzhof disagree as to whether all the customs authorities in the Community changed their practice in that way.

14 See the Commission's submission, above (footnote 12).

15 See Article 18(1) of the 1979 Agreement.

16 Reprinted in Customs Valuation, published by the Commission of the European Communities, 1989, p. 53.

17 Council Regulation (EEC) No IC5S/85 of 23 April 1985 amending Regulation (EEC) No 1224/80 on the valuation of goods for customs purposes, OJ 1985 L 112, p 50, see also the fourth, fifth and sixth recitals in the preamble

18 The second part of Question I concerns the further conditions governing such deduction

19 If the value of the consideration or the conditions can be determined by reference to the goods to be valued, then it is an indirect payment as envisaged in the last sentence of Article 3(3) or the basic regulation.

20 See Article 14 of the 1979 Agreement.

21 Commission Regulation of 11 June 1980 on interpretative notes and generally accepted accounting principles for the purposes of customs value; OJ 1980 L 154, p. 3.

22 The examples in Regulation No 1494/80 refer to Article 3(l)(b) of the basic regulation, whilst those in Annex I to the 1979 Agreement refer to the parallel Article l(l)(b) of that Agreement.

23 One example given is the case in which the seller establishes the price of the imported goods on condition that the buyer will also buy other goods in specified quantities.

24 Commission Regulation of 11 June 1980 implementing certain provisions of Articles 1, 3 and 8 of Council Regulation (EEC) No 1224/80 on the valuation of goods Tor customs purposes; OJ 1980 L 154, p. 14.

25 Case 1/77, cued above

26 Judgments of the Court in Case 1/77, cued abo\c, and Case 135/77 Bosch v Ilaupizollamt UMeibeim [1978] PCR 855

27 Paragraph 4 of the judgment.

28 Paragraph 5, iti fine; see also the operative part of the judgment in Case 135/77, cited above.

29 Perhaps unlike the case of operating software, without which the computer is quite unable to function as such, any incorporation of applications software in the computer seems altogether out of the question, since such apparatus is generally — and, clearly, m this instance too — built to be operated with a wide range of verv diverse applications programmes

30 Regulation No 1055/85, cited above

31 According to page 9 of lhe order for reference (p 6 of the translation), the inclusion of the value of the software in the customs value of the carrier media increases thai value considerably.

32 A ratio of US $ 8 million to DM 2C million was quoted, however, the first figure clearly relaies io the value of the apparatus as a whole

33 Council Regulation No 3193/8C of 8 December 1980 amending Regulation (EEC) No 1224/8C on the valuation of goods for customs purposes, OJ 1980 L 333, p. 1

34 Such acquistion of title is, indeed, not even necessary to the transaction regarding the software, since in this context the essential purpose of recording the software is that it shall be fixed for tansportation.

35 See page 2 of the English translation of the order for reference.

36 This is in keeping with the later case-law of the Bundesfinanzhof on whether software should be classified as a tangible or an incorporeal assent: judgment of 3 July 1987, Bmdeutemrblatt 1987 Part II, p. 728, at p. 730 et seq.

37 Under the principle of the transaction value it is possible only to allow or disallow, in its entirety, the deduction for the (actual) cost of the software. The method described in the aforesaid study of 1979 (namely the value of the magnetic tape and certain services, increased by 100%) seems, in any event, totally excluded under the basic regulation.

38 Sec above, paragraph 26, m fine

39 Judgment in Case 183/85 Hauptzollarm Itzehoe v Repenning [1986] ECR 1873

40 In the version applicable to that case

41 Paragraph 16 of the judgment

42 Sixth recital in the preamble

43 Hauptzollamt Frankfurt am Main-Ost v Deutsche Olivetti; see the Opinion of Mr Advocate General Tesauro of 28 March 1990.

44 As regards the terminology, it should be said that in Article 3 the basic regulation employs the terms transaction value and customs value — without prejudice to Article 8 — as synonyms whereas it uses only the term customs value for the value following the deduction of certain costs (see Articles 3 (4), 8a and 15). Those terms will be used accordingly hereinafter.

45 That point is clear not only from the later adoption of Regulation No 1055/85 but also from the hiatus in the continuity of the provisions which would occur if such a deduction were ruled out for the period from 1 July 1980 to 1 May 1985 (the entry into force of the basic regulation and of Regulation No 1055/85 respectively).

46 Judgment in Case 290/84 Hauptzollami Schweinjuri v Mainfiucbtl [1985] ECR 3909.

47 See judgment cited above, at paragraph 20; emphasis added.

48 See the detailed reasons set out in my Opinion in Case 290/84, or cited above, at p. 3919 et seq; see also the examination of Question 2, which follows.

49 See the Judgment in Case 290/84, cited above.

50 The plaintiff is therefore right in claiming that Article 8a of the basic regulation is, in relation to applications software, an innovation only in the sense that it treats a separate itemization as sufficient. In the present case, of course, the distinction between separate itemization and subsequent furnishing of evidence plays only a minor role. The plaintiff initially presented an inovoice which, in keeping with the contract, did not cite separate figures for the carrier media and the software. As I shall show shortly in examining Question 2, the customs authorities are permitted in such a case although the separate statement of the figures is normally sufficient to justify a deduction and even if the importer subsequently produces an appropriate invoice to call for further evidence, if this is needed, to convince them that the claimant is entitled to the deduction.

51 See the judgment in Case 84/79 Meyer-Uetze v Hauptzollamt Bad Rekhenhall [1980] ECR 291, at paragraph 13.

52 Article l(l)(g) of the basic regulation.

53 See the judgment in Case 84/79, cited above, and in particular the Opinion of Mr Advocate General Reischl in that case; [1980] ECR 304, at p. 308.

54 It may also be seen thai the Commission's view, expressed particularly at the hearing, that the plaintiff' should pay duty calculated on the total price because it agreed to purchase the carrier media without having the software transmitted to it by the use of telecommunication techniques, docs not carry conviction The arrangements chosen, although making a separation of the price components difficult, do not make it absolutely impossible. It would therefore be inappropriate to disallow the deduction out of hand

55 Case 290/84, cued above

56 Independently of the view set out below, it is legitimate to ask whether it is, in the first place, possible to claim that the evidence was submitted after the customs value had been fixed. Under the procedure laid down in the Federal Republic for the lodging of an obiection (administrative appeal), the same customs authorities which originally adopted the contested decision are required to rule on the obiection (Paragraphs 3, 348 and 367 of the Abgabenordnung, Bundesgesetzblatt 1976 1, page 613) and may then adopt an entirely new decision (Paragraph 367(2) of the Abgabenordnung)

57 As regards the relationship between the material time and the time of the lodging of the entry form I should like, without going into detail, to make the following points. If, as in this case, goods are released for free circulation by way of the special written procedure (Paragraph 40(a) of the Zollgesetz; see Article 20 of Directive 79/695), then the declarant who has been allowed to use the procedure first enters the goods in his records for release for free circulation. This entry notes the material time under both Community law (Article 20(5) of Directive 79/695) and German customs law (Paragraph 40(a)(2) of the Zollgesetz). The formal entry pursuant to Article 3 of Directive 79/695, however, is usually (and clearly here too) lodged only later, generally in the form of a recapitualtive entry (Paragraph 40(a) of Zollgesetz and Articles 20 (5) and (6) and 19 (5) of Dirctive 79/695).

58 Council Directive of 24 July 1979 on the harmonization of procedures for the release of goods for free circulation; OJ 1979 L 205, p. 19.

59 Commission Directive 82/57/EEC of 17 December 1981 laying down certain provisions for implementing Council Directive 79/695/EEC on the Harmonization of procedures for the release of goods for free circulation; OJ 1982 L 28, p. 38.

60 Commission Regulation (EEC) No 1496/80 of 11 June 1980 on the declaration of particulars relating to customs value and on documents to be furnished; OJ 1980 L 154, p. 16.

61 That is, the time from which the decision can no longer be contested in law (whether in |udicial proceedings or otherwise)

62 See Box 21 of the specimen form shown in the Annex to the regulation.

63 The Community body is meant. Articles 17 and 18 of the basic regulation.

64 See the Committee's commentary on the meaning of distinguished, in Customs Valuation, cited above, p. 323 (paragraph 4)

65 Cited above.

66 According to the documents the authority, in the administrative appeal proceudre, regarded as irrelevant the supplier's documents produced subsequently, in which the assembly charges were set out separately, on the ground that they were too vague in presentation to substantiate an entitlement to the deduction