Opinion of Advocate General

My Lords,

1. The present case is a reference for a preliminary ruling from the Bundesfinanzhof (Federal Finance Court, Germany). The reference is made in the context of a dispute between Felix Koch Offenbach Couleur und Karamel GmbH (hereafter Felix Koch) and the Oberfinanzdirektion München (Principal Revenue Office, Munich). The dispute concerns the classification, for the purposes of the Common Customs Tariff, of a powder made from the flesh of coconuts which is used in the manufacture of food products. The question referred is the following:

2. The version of the combined nomenclature, established for the purposes of the Common Customs Tariff of the Community, which is currently in force is contained in Annex I of Commission Regulation (EEC) No 2505/92 of 14 July 1992. It appears that, as far as the tariff headings at issue in the present proceedings are concerned, there is no difference between the current version of the Common Customs Tariff and the version in force in 1990 which is specified in the order for reference.

3. The coconut powder at issue (hereafter the product) is obtained from a pasteurized mixture of ground and pressed coconut mass to which 8% maltose and 5% sodium caseinate are added before drying. The result is a powder with a 6.9% sucrose content by weight which is suitable for use in the manufacture of foodstuffs. The material from which the powder is made has a fibre content of only 0.15%, whereas the edible pulp of a coconut consists of approximately 3.3% raw vegetable fibre; the product itself contains virtually no fibre.

4. Subheading 210690 of the combined nomenclature (Food preparations not elsewhere specified or included: ...-Other: ... — Other:) is divided into the two further subheadings:

5. Felix Koch maintains that the product should be classified under subheading 110630 of the combined nomenclature, since it is a powder of a product falling within subheading 080110, namely coconut pulp. In the view of the Commission, on the other hand, the product cannot be regarded as a pulverized form of a product falling within heading 0801, since the original fruit has been subject to processing operations which arc not envisaged by that heading.

6. In my view that submission of the Commission is correct. Heading 0801 covers dried as well as fresh nuts, and includes those which have been shelled or peeled or subject to similar operations, but it is clear that it does not cover products which have been subject to more substantial forms of processing, other than certain treatments designed to preserve the product or maintain its appearance. Thus, Note 3 to Chapter 8 of the combined nomenclature states that:

7. It will be recalled that, in the present case, the product is obtained by pressing coconut mass in order to remove the bulk of the fibre content of the original fruit. The product is pasteurized, and maltose and sodium caseinate are added, before it is finally dried and reduced to the form of a powder. It seems to me therefore that the original fruit, even before it has been dried and pulverized, has been processed in a manner which takes it outside the scope of Chapter 8.

8. That conclusion is confirmed by an examination of the Explanatory Notes to the Harmonized System published by the Customs Cooperation Council which, as the Court has consistently held, must also be taken into account in interpreting the combined nomenclature. Thus the third paragraph of the General Note to Chapter 8 states that:

9. I therefore reach the conclusion that sub heading 110630 is not applicable in the present case. It must next be considered whether the product can be classified under heading 2008, which applies to:

10. The Commission submits that heading 2008 is inapplicable in the present instance for essentially the same reason that heading 1106 is inapplicable. Thus the Commission argues that the product cannot be regarded as a preparation of fruit, because the coconut pulp from which it is made is pressed in order to remove the bulk of the fibre content before the product is subject to any further processing. In the view of the Commission, only a preparation which contains the entire pulp of the coconut can be classified as fruit ... otherwise prepared or preserved within heading 2008, rather than as a food preparation under the residual heading 2106.

11. The Commission argues that a distinction can be drawn between the present product and the substance classified under subheading 20081990 by Commission Regulation (EEC) No 316/91. The latter product is described in that regulation in the following terms:

12. It seems to me that the Commission is correct to draw a distinction between a product obtained by preparing the entire pulp of the coconut, and a product which is prepared from coconut pulp only after the latter has been pressed in order to remove the bulk of the fibre content. A process which removes a major constituent of the fruit, such as its vegetable fibre, is not aptly described as leading to a preparation of the fruit. It is clear moreover that the constituents which remain cannot in themselves be described as other edible parts of plants for the purposes of heading 2008 (see paragraph 9 above).

13. On the other hand, as the Commission points out, there is no doubt that the product can be regarded as a food preparation for the purposes of heading 2106. It appears from the order for reference that Felix Koch argued in the main proceedings that the product is not a food preparation because it is used as an ingredient in the manufacture of food preparations rather than being independently consumed. However, according to the Explanatory Notes to the Harmonized System, heading 2106 (Food preparations not elsewhere specified or included) covers in particular:

Conclusion

14. I am accordingly of the opinion that the question referred by the Bundesfinanzhof should be answered as follows:

1 Original language: English.

2 OJ 1992 L 267, p. 1.

3 Harmonized Commodity Description and Coding System: Explanatory Notes (Customs Cooperation Council, Brussels).

4 See Case C-265/89 Vismans Nederland [1990] ECR I-3411, at paragraph 18 of the judgment, and sec also Case C-318/90 Boehringer Mannheim [1992] ECR I-3495, at paragraph 14.

5 Commission Regulation (EEC) No 316/91 of 7 February 1991 concerning the classification of certain goods in the combined nomenclature (OJ 1991 I. 37, p 25.)

6 Commission Regulation (EEC) No 1486/93 of 16 June 1993 concerning the classification of certain goods in the combined nomenclature (OJ 1993 L 147, p, 8 ).

7 On the role of the Committee on Common Customs Tariff Nomenclature, which consists of Customs experts of the Member States, see Case 37/75 Bagusat v Hanptzollamt Berlin-Packhof [1975] ECR 1339, at paragraphs 5 to 7 of the judgment, and Vismans Nederland, cited above in note 3, at paragraph 13. The Committee was established by Council Regulation (EEC) No 97/69 of 16 January 1969 on measures to be taken for uniform application of the Common Customs Tariff (OJ, English Special Edition 1969 (I), p. 12).