Report for the Hearing in Case C-43/89

I — Facts

1. In 1983 the undertaking Gerlach & Co. BV (Gerlach) imported into the Netherlands from the United States of America a piece of apparatus known as a COM-recorder and described in the customs form as a complete apparatus for transferring documents to microfilm. The purpose of the apparatus is to transcribe in legible form on microfilm or microfiche decoded computerized data and it is described as follows.

2. Upon the importation of the apparatus, the undertaking declared it for entry for direct home use and indicated on the customs declaration subheading 90.07 A of the Common Customs Tariff.

3. Gerlach subsequently lodged an objection against its own declaration, claiming that the apparatus should be classified under subheading 84.53 B or, in the alternative, subheading 84.54 B of the Common Customs Tariff. When the Inspecteur der Invoerrechten en Accijnzen (Inspector of Customs and Excise) rejected its objection, Gerlach appealed to the Tariefcommissie (Administrative court of last instance in revenue matters), Amsterdam.

4. It appears from the order requesting a preliminary ruling that the imported apparatus consists of the following components: a control unit, a microcomputer, an acoustic modem, two disk drives, a control panel, a film-holder, a camera, a lens, a slide device, an optical laser system, a developer and a keyboard/printer.

II — Relevant legislation

5. The three relevant subheadings of the Common Customs Tariff (annexed to Regulation (EEC) No 950/68 of the Council, Official Journal, English Special Edition 1968 (I), p. 275, as amended by Council Regulation (EEC) No 3400/84 of 27 November 1984, Official Journal L 320, p. 319) in this case read as follows:

6. Note 3(B) to Chapter 84 of the Common Customs Tariff reads as follows:

7. The Explanatory Note to the Customs Cooperation Council Nomenclature regarding subheading 84.53 B, above, reads as follows:

8. Moreover, according to general rule 3(b) for the interpretation of the nomenclature of the Common Customs Tariff,

9. The Commission, acting under Regulation (EEC) No 97/69 of the Council of 16 January 1969 (Official Journal, English Special Edition 1969 (I), p. 12), adopted Regulation No 551/81 (Official Journal 1981 L 56, p. 20) with a view to ensuring uniform application of the nomenclature of the Common Customs Tariff. Article 1 of that regulation provides that the apparatus described therein for transferring to microfilm information recorded on magnetic tape is to be classified under subheading 90.07 A of the Common Customs Tariff.

III — The preliminary question

10. The question raised in this case is whether the essential part of the apparatus in question is the device for transcribing computerized data received by the central unit, in which case the apparatus should be classified under subheading 84.53 B, or the photographic device, in which case the apparatus should be classified under subheading 90.07 A.

11. The national court takes the view that the apparatus in question is an output unit for an automatic data-processing machine and should be classified under subheading 84.53 B. It considers, however, that doubt as to whether that would be correct is raised by the fact that under Commission Regulation (EEC) No 551/81 apparatus for transferring to microfilm information recorded on magnetic tape must be classified under subheading 90.07 A of the Common Customs Tariff ... . The national court also observes that such apparatus is classified for the purposes of the Common Customs Tariff differently in the various Member States and therefore refers to the Court for a preliminary ruling the following question :

12. The question should be recast so as to cover the interpretation of the three subheadings of the Common Customs Tariff which are mentioned above.

IV — Written procedure

13. In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities, written observations were lodged on 19 May 1989 by Gerlach, the applicant in the main proceedings, represented by N. P. J. Ooyevaar, of the Amsterdam Bar, and on 18 May 1989 by the Commission of the European Communities, represented by R. Barents, a member of its Legal Department, acting as Agent.

14. On 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.

15. By decision of the 17 January 1990, the Court assigned the case to the Fourth Chamber.

The parties' observations

16. As appears from the order of the national court, the Inspecteur der Invoerrechten en Accijnzen, the defendant in the main proceedings, argued before that court that the apparatus in question displayed a marked similarity to the apparatus described in Regulation No 551/81, cited above.

17. The defendant in the main proceedings considers that the difference between the two pieces of apparatus lies in the fact that the apparatus with which these proceedings are concerned has a laser rather than a cathode-ray tube and the film is developed by means of heat rather than chemically. In its view, however, that difference is of no significance for the purposes of classification under the Common Customs Tariff, since subheading 90.07 A covers photographic cameras of every kind. The essential character of the apparatus is determined by the photographic component inasmuch as the microcomputer which forms part of the apparatus is used only to control the photographic component.

18. Gerlach, the applicant in the main proceedings, observes, in limine, that the differing classification of the apparatus in question in the various Member States has seriously disturbed competition.

19. As regards the technical characteristics of the apparatus, Gerlach makes the following observations, which have not been challenged: the apparatus consists, first, of a device which transcribes in legible characters data from a central computer; that device may be compared to a laser printer.

20. As for the function of the apparatus in question — the initials of which, COM, stand for Computer Output Microfilm — Gerlach states that it consists in fixing computerized data received from a central computer on microfiches. The apparatus was especially designed for connection to a central processing unit and therefore constitutes an output unit within the meaning of the explanatory notes to subheading 84.53 B, quoted above.

21. Gerlach maintains that the apparatus described in Commission Regulation No 551/81 cannot be compared to the apparatus at issue in this case: the former does not produce the documents to be copied itself and hence its photographic device performs an essential function.

22. In contrast, in the apparatus at issue the photographic device performs a secondary function as compared with its function of transforming computerized data into legible form. Processing of computerized data is its main function given that if the computerized data were not transposed into legible form there would be nothing to photograph.

23. Gerlach therefore suggests that the answer to the question should be that the apparatus described in the order for reference must be classified under subheading 84.53 B of the Common Customs Tariff pursuant to note 3(B) to Chapter 84 of the Common Customs Tariff. In the event that the apparatus in question should be caught by Commission Regulation No 551/81, it should be held that that regulation is incompatible with the aforesaid provisions of the Common Customs Tariff.

24. The Commission considers that the apparatus at issue should be classified under subheading 84.53 B of the Common Customs Tariff, because it is a machine for transcribing data onto data media in coded form within the meaning of the subheading in question and it fulfils the two conditions mentioned in note 3(B) to Chapter 84 of the Common Customs Tariff.

25. The Commission observes that there is a considerable difference between the apparatus in question and the apparatus described in Regulation No 551/81. According to the preamble to that regulation, the apparatus described therein can operate completely independently because it has a built-in microprocessor of its own. As a result, the essential character of the apparatus described therein lies in its photographic component and the decision to classify it under subheading 90.07 A was based on general rule 3(b) for the interpretation of the Common Customs Tariff, which provides that composite goods must be classified as if they consisted of the component which gives them their essential character.

26. The Commission points out that the apparatus described in the order for reference cannot operate independently as it is specially designed to be connected to a central processing unit and cannot operate without being so connected. Consequently, since it cannot operate independently the apparatus in question satisfies the two conditions laid down in note 3(B) to Heading 84.53 of the Common Customs Tariff.

1 Language of the case: Dutch.