Report for the Hearing in Case C-14/91

I — Legislative background

Tariff heading 2106 (Food preparations not elsewhere specified or included) in Chapter 21 of the Common Customs Tariff (Miscellaneous edible preparations) contains the following subheading 9091:

Tariff heading 3823 in Chapter 38 (Miscellaneous chemical products) is worded as follows:

Subheading 60 of the above heading reads as follows:

At its 44th meeting, held on 1 April 1980, on the Harmonized Commodity Description and Coding System, the Nomenclature Committee of the Customs Cooperation Council approved a note 1(b) to Chapter 38. According to that note,

The relevant explanatory note reads as follows:

At its fourth meeting, held on 4 February 1991, the Scientific Sub-Committee of the Customs Cooperation Council drew up a list of simple ingredients which could be regarded as food preparations or other substances having nutritive value. The following table reproduces the list:

II — Facts and procedure

1. The Oberfinanzdirektion München, the defendant in the main proceedings, issued to SuCrest GmbH, the defendant in the main proceedings, on 12 September 1988 four binding customs notices in respect of various kinds of bakery and biscuit emulsifiers, pasty matter made from sorbitol syrup (70% by dry weight), monoglycerides and diglycerides and water — each of those preparations also containing carotene oil and propylene glycol — classifying them under subheading 2106 9091 of Chapter 21 of the Combined Nomenclature of the Common Customs Tariff (other edible preparations not elsewhere specified or included, containing no milkfats).

2. The plaintiffs objections, lodged on 22 September 1988, seeking classification under heading 3823 of Chapter 38 (chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included) were dismissed by decision of the Oberfinanzdirektion of 29 March 1990 on the ground that the preparations in question were mixtures of chemicals and foodstuffs with nutritive value used in the preparation of human foodstuffs, in particular for the manufacture of bakery products, and were thus excluded from Chapter 38 of the Common Customs Tariff. SuCrest commenced proceedings against that decision.

3. The Bundesfinanzhof (Federal Finance Court), before which the case was brought, considers that the decision to be given depends essentially on the interpretation of a provision of Community law. That provision, note 1(b) of Chapter 38 of the Common Customs Tariff excludes from that chapter mixtures of chemicals with foodstuffs or other substances with nutritive value, of a kind used in the preparation of human foodstuffs.

4. The Bundesfinanzhof states that it is inclined to share the view of the plaintiff, namely that the conditions for the exclusion of the mixtures in question from the abovementioned tariff heading are not satisfied in this case. In its view, the wording of that provision gives the impression that foodstuffs or other substances with nutritive value can only be substances which cannot themselves be regarded as chemicals. However, sorbitol syrups such as those used in the preparations in question fall within subheading 382360 of the Common Customs Tariff. Moreover, there is no reason to regard sorbitol, a synthetic sweetener, as a foodstuff with nutritive value. The same would appear to apply to monoglycerides and diglycerides. The fact stressed by the plaintiff, namely that glycerides are of use physiologically, in the metabolism of fat, does not in itself enable any conclusions to be drawn regarding its nutritive qualities. Propylene glycol and carotene oil (colouring agents) are not in any event to be regarded as substances with nutritive value.

5. According to the Bundesfinanzhof, whilst tariff heading 3823 appears to be applicable, doubts nevertheless remain regarding the components sorbitol syrup ano głycerides (being substances without nutritive value — see the German notes on tariff heading 2106 — Harmonized System — note 33.0: notice concerning baking aids including those containing glycerides, albeit together with saccharose — a foodstuff not contained in the products with which this case is concerned).

6. For that reason, by order of 27 November 1990, the Bundesfinanzhof stayed the proceedings and referred the following question to the Court for a preliminary ruling:

7. The order for reference was received at the Court Registry on 16 January 1991.

8. Pursuant to article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted by the defendant in the main proceedings, represented by Reinhart Pätsch, acting as Agent, and by the Commission of the European Communities, represented by Antonio Aresu, a member of its Legal Service, and Roberto Hayder, a national civil servant seconded to the Legal Service, acting as Agents.

9. Upon 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.

10. Pursuant to article 95(1) and (2) of the Rules of Procedure, the Court assigned the case to the Fourth Chamber.

III — Written observations submitted to the Court

1. The defendant sutes that it is disputed whether sorbitol, monoglyceride and diglyceride belong to the group of substances with nutritive value as defined in note 1(b) to Chapter 38.

(a) Sorbitol

Sorbitol is a sugar alcohol widespread in the vegetable kingdom. It differs from sugar, more precisely monosaccharides, only by the fact that there are two extra hydrogen atoms. Like sugar, it has an agreeably sweet flavour.

Sorbitol is found in particular in the fruit of the sorb tree (5-12%), in plums, apples, pears, peaches and apricots (1-5%). Concentrated pear juke and phim-based preparations contain highly enriched sorbitol (up to 20%).

By the action of a natural enzyme (sorbitol dehydrogenase), sorbitol changes in the liver of humans and mammals into fructose, which in turn may be either directly metabolized or converted into glycogen. Glycogen is a substance held in reserve, made up of units of glucose, present in the liver in particular, but also in other cells. The energy value of sorbitol, amounting to 17 kJ (4 kcal) per gramme, is equivalent to that of sugars.

Sorbitol has become very important in the food industry. It replaces ordinary sugars in food preparations for the following reasons:

Sorbitol is converted and broken down in the organisms of humans and animals by endogenous enzymes. Its calorific value of 17kJ (4 kcal) per gramme is equivalent to that of ordinary sugars. Like the latter, sorbitol is therefore a substance with nutritive value.

(b) Monoglycerides and diglycerides

The lipids used in foodstuffs are combinations of glycerine and fatty acids (esters). Glycerine is a trivalent alcohol. The three groups of alcohol are combined in lipids with fatty acids. That is why those substances are known as triglycerides.

In monoglycerides and diglycerides only one or two of the three alcohol groups are combined with the fatty acids. Since lipids are decomposed by hydrolysis on contact with water (the link between one or more alcohol groups and the fatty acids is dissolved), monoglyceride and diglyceride are often normal components of lipids in the natural state.

Lipids extracted from damaged seeds contain fatty acids in practically all cases, together with monoglycerides and diglycerides in the free state. It is well known that palm oil (a lipid extracted from the fruit of the palm tree known as Elaeis Guineensis) may, if special precautions are not taken during extraction, contain particularly large quantities of fatty acids and monoglycerides and diglycerides, owing to the fact that the fruit contain large quantities of enzymes which hydrolyse the lipids (lipases).

The defendant then explains how the hydroh/sing enzymes transform triglycerides, that is to say lipids, in the stomachs of human beings and animals.

The hydrolysed products are absorbed by the epithelial cells of the mucous in the small intestine either in the form of a water soluble combination of fatty acid — biliary acid and monoglyceride micelles, fatty acids and biliary salu, or in the form of very finely emulsified triglycerides and diglycerides.

The main meubolization occurs by degradation of the fatty acids resulting from the hydrolysis of monoglycerides, diglycerides and triglycerides according to the ß oxidation principle. That is a very complex process. The main end product deriving from that oxidation is activated acetic acid which is burned at the end of the process, releasing vital energy.

Monoglycerides and diglycerides are substances which normally accompany lipids of vegetable origin. They are — like lipids in the stria sense — fatty acid esters of glycerine and the first intermediate products deriving from the natural breakdown of lipids in the organism.

In the case both of monoglycerides and diglycerides and of triglycérides, the energy gain occurs when those substances are broken down in the human and animal organisms by combustion of the activated acetic acid deriving from ß oxidation of the fatty acids.

The defendant considers, for all those reasons, that monoglycerides and diglycerides are, like triglycerides, substances (lipids) with nutritive value.

2. The Commission recalls that the preliminary question relates to the classification of various emulsifying agents used for the manufacture of bakery products (in particular biscuits) under tariff headings of the Combined Nomenclature, pursuant to Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and the Common Customs Tariff. Those emulsifying agents are used in products prepared from sorbitol syrup, monoglycerides and diglycerides, and water, each of those products having added to it carotene oil as a colouring agent or propylene glycol.

IV — Oral procedure

At the hearing, the plaintiff in the main proceedings maintained that the products in question fail within Chapter 38 of the Common Customs Tariff.

1 Language of the case: German.