51/70 · GlobalLawDB

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In Case 51/70Reference to the Court under Article 177 of the EEC Treaty by the Finanzgericht München for a preliminary ruling in the action pending before that court betweenALFONS LÜTTICKE GMBH, Cologne,andHAUPTZOLLAMT PASSAU,THE COURTcomposed of: R. Lecourt, President, A. M. Donner and A. Trabucchi, Presidents of Chambers, R. Monaco (Rapporteur), J. Mertens de Wilmars, P. Pescatore and H. Kutscher, Judges.Advocate-General: K. RoemerRegistrar: A. Van Houttegives the following

Judgment

Issues of fact and of law

I —Summary of the facts and procedure

In November 1967 and in January and June 1968 Alfons Lütticke GmbH [hereinafter referred to as Lütticke] requested customs clearance at the customs office of Simbach-Innbrücke for three consignments of goods coming from Austria which the company declared as ‘chocolate in bulk’.The customs office however took the view that the goods were not ‘chocolate in bulk’.In the view of Lütticke, the description ‘chocolate in bulk’ means intermediate or semi-finished products at least in so far as they possess the essential properties of a chocolate preparation, without necessarily having all the properties of chocolate ready for consumption.The Hauptzollamt (Principal Customs Office), on the other hand, regards the description ‘chocolate in bulk’ as applying only to chocolate ready for consumption.Faced with this problem, the Finanzgericht (Finance Court) München, by an order dated 3 August 1970, stayed proceedings and referred two questions to the Court of Justice for preliminary ruling pursuant to Article 177 of the EEC Treaty:1. Is the term “chocolate in bulk” (“Schokoladenmasse”) in the first indent of Article 1 of Regulation No 755/67/EEC of the Council of 26 October 1967, especially having regard to the facts that the word “chocolate” is used in the fourth indent of that article and that the term “chocolates” is used in Annexes I and II to Regulation No 752/67/EEC of the Council of 24 October 1967, to be interpreted as including:(a) only unfilled chocolate, ready for consumption, including chocolate in the form of granules or, if this question is answered in the negative,(b) only intermediate or semi-finished products of the chocolate industry?2. If Question 1 (b) is answered in the affirmative, what minimum conditions must a preparation fulfil in order to be regarded as “chocolate in bulk” within the meaning of Article 1 of Regulation No 755/67/EEC of the Council:(a) in respect of its composition?(aa) Must the preparation already include the ingredients of the end-product, whether chocolate or milk chocolate?(bb) If the answer to Question (aa) is in the affirmative, must certain minimum and maximum limits be observed for the proportions of cocoa, milk and sugar constituting the ingredients, although there are no relevant regulations on food at Community level and although the national food law provisions diverge from one another in this respect?(cc) If the answers to Questions (aa) and (bb) are in the affirmative, what minimum and maximum limits must be observed for the proportions of the ingredients of milk chocolate?(dd) In the case of Question (cc), does it suffice, in particular, if the preparation already contains all the ingredients of the end-product, chocolate or milk chocolate, in such quantities that the minimum limits according to the food law provisions of any Member State—although not necessarily of the Federal Republic of Germany—are satisfied and does this apply to the maximum limits?(b) with regard to the stage reached in processing towards the finished product?(aa) Must the preparation have already undergone all the processing stages of chocolate production, such as the mixing of the ingredients, the drying of the mixture (if ingredients in a liquid state are used), the fine-reduction, conching and crystallization of the mixture, right down to the moulding?(bb) If the answer to Question (aa) is in the negative, does the mere mixing of the ingredients suffice or must there be a further stage of processing?(c) with regard to the method of manufacture?(aa) Must a specific technical process have been used at the particular processing stage or stages, which the preparation must in any event have undergone in the processes mentioned in Question (b), by employing quite specific types of machines or is it irrelevant how the mixture has been produced and, where necessary, dried and fine-reduced?(bb) In particular, must a specific process be used for the compounding of the cocoa constituents with the milk constituents or is it irrelevant whether, for example, the compounding is achieved with milk powder or liquid milk?(cc) If the answers to Questions (aa) and (bb) are the first alternatives, according to what technical process must the mixing and, where necessary, the drying and fine-reduction have been effected and what types of machines must be used for this purpose?(dd) Must all the ingredients of the preparation—cocoa, milk and, where applicable, sugar—have been intimately compounded with one another or is it sufficient that an intimate compound has been produced either of cocoa and milk alone or of cocoa, milk and part of the sugar?’The order for reference was received at the Court Registry on 18 August 1970.Lütticke and the Commission of the European Communities submitted written observations in accordance with Article 20 of the Protocol on the Statute of the Court of Justice on 10 and 12 November 1970 respectively.On hearing the report of the Judge-Rapporteur and the views of the Advocate-General, the Court decided not to hold any preparatory inquiry and set the date for the opening of the oral procedure.Lütticke, represented by Mr Wendt and Mr Heyn, and the Commission, represented by its Legal Adviser, Mr F. W. Albrecht, presented oral argument at the hearing on 13 January 1971.The Advocate-General delivered his opinion at the hearing on 3 February 1971.

II —Written observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice

A —Observations submitted by Lütticke

Lütticke first referred to the terms of the legal provisions relevant to the problem at issue and summarized the background to the contested description in the Community rules and then went on to make the following observations:— Literally the expression ‘in bulk’ with regard solely to its material composition indicates generally an ‘unshaped mass’ that is a mass which has to be improved and worked to become an object of a particular type and form. Descriptions containing this expression used in connexion with foodstuffs mean intermediate or semi-finished products which already have the essential qualities of the finished product. Thus the expression ‘chocolate in bulk’ means an intermediate or semi-finished product for the production of chocolate which already has the essential qualities of chocolate.— As to the commercial concept, to which the description of goods contained in a customs tariff must correspond, it must be stated that the essential nature of goods ‘in bulk’ is that they are intended for further processing and for the manufacture of a finished product. Thus the expression ‘chocolate in bulk’ refers to products which are the result of as homogeneous as possible a mixture of the ingredients of chocolate which are used in the manufacture of chocolate and which are therefore intermediate or semi-finished products.— Moreover the fact that the expression ‘chocolate in bulk’ is unknown in German food law is significant, since this law only relates to products intended for the ultimate consumer and does not refer to intermediate or semi-finished products.— In addition this interpretation is confirmed by a systematic analysis of the relevant regulations. The distinction between the descriptions ‘chocolate in bulk’ and ‘chocolate’ made in Article 1 of Regulation No 755/67/EEC (in the first and fourth indents) shows that since the expression ‘chocolate’ covers products ready for consumption, the expression ‘chocolate in bulk’ must apply to intermediate or semi-finished products, intended for the manufacture of chocolate.— Moreover from the distinction made between the expressions ‘chocolate in bulk’ and ‘chocolates, whether or not filled’ in Annexes I and II to Regulation No 752/67/EEC (subheading 18.06-B-1) it may be deduced that since chocolates whether or not filled are chocolates ready for consumption, the expression ‘chocolate in bulk’ refers to an intermediate or semifinished product, that is to say, a product which has reached a stage of production less advanced than that of unfilled chocolates. The fact that these two descriptions are placed together under the same subheading shows that the word ‘chocolate’ has a very wide meaning, including both products ready for consumption and intermediate or semi-finished products.— As to the mention in brackets of certain products (‘blocks, bars, sticks etc.’) relating to ‘chocolate in bulk’ in Article 1 of Regulation No 755/67, it could perhaps be deduced that, since in the chocolate industry chocolate in bulk is formed into ‘blocks’ if it has to be stored for a long time before going through the next stage of processing, the description ‘chocolate in bulk’ also applies to products ready for consumption.After pointing out that the rules for the interpretation of the nomenclature of the Common Customs Tariff and in particular those contained in paragraphs 3 (a) and (b) and 5 of the ‘Explanatory Notes’ to this nomenclature lead to the same conclusions, Lütticke argues that the criterion for interpretation adopted by the Passau customs office is ill-founded in that, in order to determine the sense and content of the description in question for the purposes of Regulations Nos 752/67 and 755/67, that office referred to the description ‘chocolate en masse’ (‘chocolate in bulk’) contained in the French customs tariff before the entry into force of these regulations.There are many objections to an interpretation based on consideration of only one national law since reference to internal legislation may only be admitted if it is based on a comparison of all national laws.The description ‘chocolate en masse’ in the former French tariff is unknown in the customs tariffs of the other Member States.Finally the subdivisions of heading 18.06-B made by Regulations Nos 752/67 and 755/67 do not correspond to the subdivisions of this heading in the former French tariff.Lütticke refers to the personal opinions relating to the description in question, expressed to a former colleague of its Counsel by officials of the Federal Ministry for Finance and of the Commission in December 1967.In its oral observations, it adds that if it was accepted that the contrary view corresponded to the letter and the sense of Regulation No 755/67, this regulation was void and Article 16 of Regulation No 160/66 would be applicable in this case. In addition Regulation No 755/67 was no longer in force at the time when the imports in question were made.Lütticke examined the second question with detailed analysis and decided that the two questions should be answered as follows:1. The description ‘chocolate in bulk’ in the first indent of Article 1 of Regulation No 755/67 also includes intermediate or semi-finished products intended for the production of chocolate.2. The description ‘chocolate in bulk’ also applies to intermediate or semi-finished products which do not contain all the ingredients for chocolate or for milk chocolate etc.Or in the alternative:The description ‘chocolate in bulk’ also applies to intermediate or semifinished products which do not contain all the ingredients of the final product of chocolate or milk chocolate etc., in the proportions in which they should be found, according to their composition, in products which are ready for consumption. There are no minimum or maximum limits for the proportion of ingredients of ‘chocolate in bulk’.3. For the production of ‘chocolate in bulk’ it is enough that the ingredients of chocolate or of milk chocolate have been mixed. It does not matter that chocolate in bulk may already have gone through possible further stages of the process of chocolate production.4. For the production of ‘chocolate in bulk’ it is not essential that a specific process be followed or that specific machines be used. It is only necessary that an intimate compound of the ingredients for chocolate shall have been obtained, without their having had to be dissolved in the mass or refined.

B —Observations submitted by the Commission of the European Communities

The Commission first described the system established by Regulation No 160/66 and summarized the background to the development of tariff heading 18.06 through the various regulations covering this heading and then went on to make the following observations:— The Explanatory Notes to the Brussels Nomenclature which, while they have no mandatory effect within the Community, can serve as a valuable aid to tariff interpretation, and the Explanatory Notes to the Common Customs Tariff established by the Community and reflecting the unanimous opinion of the national customs experts responsible for their preparation, defined the term ‘chocolate’. From these explanatory notes it may be deduced that ‘chocolate’ covers products ready for consumption which, from the point of view of composition and processing, have the properties of chocolate so defined. This does not create a contradiction with the fact that such a product is not necessarily an end-product. Other products which contain cocoa but do not satisfy these conditions are intermediate or semi-finished products for the manufacture of chocolate, even if they contain all the ingredients for the manufacture of chocolate and evidence a certain amount of processing.— The expression ‘chocolate in bulk’ is only a subdivision of ‘chocolate’. It refers to a mass of chocolate and not to a mass for the manufacture of chocolate. This interpretation corresponds to the concept in the former French customs tariff of ‘chocolate en masse’ and was most probably the source of the description in question under Community law.— In addition the list of products in brackets in Regulation No 755/67 (as well as in the French customs tariff) proves that this description refers solely to chocolate ready for consumption, in commercial form. This list also permits of the conclusion that the expression ‘in bulk’ does not connote shapeless matter, but rather a homogeneous product'. Chocolate products in the form of granules or powder would also come within the concept of ‘in bulk’ and therefore within the concept of ‘chocolate in bulk’. On the other hand, filled chocolates or all similar products containing chocolate would be excluded.The Commission further maintains that these conclusions are confirmed by the ratio legis of Regulation No 755/67. The necessity of suspending the consolidation of customs duties only arose in respect of those products included under tariff heading 18.06-B, which being neither suitable for sale, nor ready for consumption, are food preparations containing cocoa and intended for the production of chocolate; to import them would have been prejudicial to the Common Market.Therefore, indirectly, the fact that ‘chocolate in bulk’ has been exempted from this suspension by Article 1 of Regulation No 755/67 proves that in this case only chocolate ready for consumption is referred to and not an intermediate or semi-finished product for the manufacture of chocolate .The Commission contests arguments brought by Lütticke, including those drawn from the Rules for the Interpretation of the Nomenclature of the Common Customs Tariff, and finally observes that the term ‘chocolate’ (in Regulations Nos 755/67 and 735/68, ‘chocolate in bulk’ (in Regulations Nos 752/67 and 755/67) and ‘chocolates’ (in Regulations Nos 752/67 and 735/68 all refer, apart from certain differences in detail, to chocolate ready for consumption.In conclusion, it argues that the first question should be answered to the effect that intermediate products or semi-finished products for the chocolate industry are not covered by the term ‘chocolate in bulk’ within the meaning of Regulation No 755/67.‘Chocolate in bulk’ should be so interpreted as to include solely a commodity with all the properties of chocolate and which is therefore ready for consumption.In addition since chocolate in bulk should form a homogeneous mass, chocolate in granules, in contrast to filled chocolate, is excluded from this term.The second question is therefore superfluous.

Grounds of judgment

1By an order of 3 August 1970, received at the Court on 18 August 1970, the Finanzgericht München, pursuant to Article 177 of the EEC Treaty, referred several questions relating to the interpretation of Regulation No 752/67/EEC of the Council of 24 October 1967 (Official Journal 1967, No 263) and Regulation No 755/67/EEC of the Council of 26 October 1967 (Official Journal 1967, No 260).

The first question

2In the first question the Court is asked to rule whether the term ‘chocolate in bulk’ in Article 1 of Regulation No 755/67/EEC is to be interpreted to the effect that it only covers chocolate ready for consumption or only intermediate or semi-finished products of the chocolate industry.

3This question relates to the tariff classification of certain food preparations for the manufacture of chocolate which were imported into the Community in November 1967 and January and June 1968. It emerges from the order of the court making the reference, the customs declarations and the written observations submitted by the Commission and by the plaintiff in the main action under Article 20 (2) of the Protocol on the Statute of the Court of Justice that these are preparations containing 0 to 20 % sugar, 10 to 26 % cocoa or cocoa in bulk and 64 to 74 % milk.

4The plaintiff in the main action claims that the regulation for which the interpretation is requested was no longer in force at the time of the imports in question. However, this regulation, according to the second paragraph of Article 2 thereof, ‘shall apply up to the date of the decision of the Council concerning the conclusion of the negotiations opened in accordance with Article XXVIII of the General Agreement on Tariffs and Trade’. The preamble to the said regulation shows that the negotiations referred to are those in which the Commission was authorized to participate by decision of the Council of 25 July 1967. No decision within the meaning of the second paragraph of Article 2 abovementioned was made before the adoption of Regulation No 2121/68 of the Council of 20 December 1968, Article 4 of which repealed Regulation No 755/67 with effect from 1 January 1969. It follows that Regulation No 755/67 was still in force at the time of the imports in question.

5By Article 1 of Regulation No 755/67 the amount of the tax referred to in Article 10 of Regulation No 160/66 is, by way of derogation from Article 16 of that regulation, to be collected in full on products classified under tariff heading 18.06-B of the Common Customs Tariff other than ‘chocolate in bulk’, confectionery containing cocoa or chocolate, whether or not filled, ice-cream containing cocoa or chocolate and chocolate and other food preparations satisfying certain conditions of packaging for retail sale. Therefore, in determining the scope of application of these product descriptions, it must be borne in mind that Regulation No 755/67 applies only to certain listed products.

6Neither from the letter nor from the context can the term ‘chocolate in bulk’ as used in Regulations Nos 752/67 and 755/67 be so interpreted as to extend the scope of application to intermediate or semi-finished products necessary for the manufacture of chocolate. In particular, it must be concluded from Annexes I and II to Regulation No 752/67 of the Council that the Customs Tariff, which amends Regulation No 83/67 on this point, classified ‘chocolate in bulk’ under the same tariff heading (18.06-B-I) as ‘chocolate goods’ and ‘sugar confectionery’ which are products ready for consumption. It cannot be deduced from letter (a) of this tariff heading, which relates to products ‘containing no sucrose or containing less than 5 % by weight of sucrose’, that Regulation No 752/67 was intended, by the use of the term ‘chocolate in bulk’, also to cover intermediate or semi-finished products in chocolate manufacturing. Since only finished products come under tariff heading 18.06-B-I, the designation contained under letter (a) must refer not to ‘chocolate in bulk’ but to ‘substitutes made from sugar substitutes’.

7In common usage the term ‘in bulk’ describes a product that has no particular form or which is characterized by a homogeneous mixture of its constituents. The more detailed description ‘blocks, bars, sticks …’ added in brackets to the first indent of Article 1 of Regulation No 755/67 indicates the various forms in which ‘chocolate in bulk’ may exist. ‘Chocolate in bulk’ may be regarded as ‘ready for consumption’ if it can be marketed as chocolate; this does not necessarily preclude it from undergoing a further production or packaging stage. Thus in the present case the term ‘in bulk’ means a homogeneous mass of chocolate, regardless of the form in which it is presented.

8Accordingly, the term ‘in bulk’ cannot be so interpreted as to describe a product which is not ready for consumption. To attribute to the term ‘chocolate in bulk’ a wider scope and not limit it solely to products ready for consumption would be incompatible with the aims of Regulation No 755/67, which with the withdrawal of the tariff concessions for food preparations for the manufacture of chocolate took account as far as possible of the necessity of protecting the market for milk and milk products within the Community. Moreover, it follows from Article 1 of Regulation No 1114/68 of the Council of 29 July 1968, in which the provisions of Article 16 of Regulation No 160/66 were extended to preparations for chocolate manufacturing, that the Council expressly described these products and the conditions which they had to fulfil with regard to their milk fat content. Although Regulation No 1114/68 had not yet entered into force at the time of the imports in question it supplemented Regulation No 755/67 without amending it and therefore allows a better understanding of the guiding principle of this regulation.

9It is therefore appropriate to reply that the term ‘chocolate in bulk’ in the first indent of Article 1 of Regulation No 755/67 must be interpreted as covering solely chocolate ready for consumption which can be marketed as chocolate.

10Since the answer to the first question is in the affirmative the remaining questions become superfluous.

Costs

11The costs incurred by the Commission of the European Communities which submitted observations to the Court are not recoverable. As these proceedings are, so far as the parties to the main action are concerned, a step in the action pending before the Finanzgericht München, the decision of costs is a matter for that court.

Operative part

On those grounds,Upon reading the pleadings;Upon hearing the report of the Judge-Rapporteur;Upon hearing the observations of Lütticke and the Commission of the European Communities;Upon hearing the opinion of the Advocate-General;Having regard to the Treaty establishing the European Economic Community, especially Article 177;Having regard to Regulations of the Council No 160/66 of 27 October 1966, No 83/67 of 18 April 1967, No 752/67 of 24 October 1967, No 755/67 of 26 October 1967, No 735/68 of 18 June 1968, No 1114/68 of 29 July 1968, No 2121/68 of 20 December 1968 and No 1/71 of 17 December 1970;Having regard to the Decisions of the Council No 68/411/EEC of 27 November 1967 and No 68/421/EEC of 20 December 1968;Having regard to the Protocol on the Statute of the Court of Justice of the EEC, especially Article 20;Having regard to the Rules of Procedure of the Court of Justice of the European Communities;THE COURTin answer to the question referred to it by the Finanzgericht München by order of 3 August 1970, hereby rules: The term ‘chocolate in bulk’ in the first indent of Regulation No 755/67 of the Council of 26 October 1967 must be interpreted as covering solely chocolate ready for consumption, which can be marketed as chocolate.

Delivered in open court in Luxembourg on 3 March 1971.