Contents
In Case 137/78REFERENCE to the Court under Article 177 of the EEC Treaty by the College van Beroep voor het Bedrijfsleven (administrative court of last instance in matters of trade and industry) for a preliminary ruling in the action pending before that court betweenHENNINGSEN FOOD INC ., Nebraska, United States of America,VAN DEN BURG EIERPRODUKTEN BV., Waalwijk, The Netherlands,both in their capacity as managing partners of the partnership trading as Henningsen Van den Burg, Waalwijk,andPRODUKTSCHAP VOOR PLUIMVEE EN EIEREN (Poultry and Eggs Board), Zeist, The Netherlands,THE COURT (First Chamber)composed of: J. Mertens de Wilmars, President of Chamber, A. O'Keeffe and G. Bosco, Judges,Advocate General: J.-P. WarnerRegistrar: A. Van Houttegives the following
Judgment
Facts and Issues
The facts of the case, the course of the procedure and the written observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows:
I —Facts and written procedure
II —Written observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC
(a)First question
The products in question correspond to the definitions of the products referred to in Article 1 (2) (c) and (d) of Regulation (EEC) No 2771/75 on the common organization of the market in eggs (Official Journal 1975, L 282, p. 49) and monetary compensatory amounts are applicable to them. Even if this were not so those definitions are not decisive in this case since the sphere of application of Regulation No 2771/75, as defined in Article 2 (1), covers a number of headings of the Common Customs Tariff including heading 04.05 B I.Neither the notes at the beginning of Chapter 4 of the Common Customs Tariff nor those at the beginning of Chapter 21 refer to headings 04.05 B I or 21.07 G I (a) 1. According to the general rules of classification for tariff purposes the classification of products is decided principally on the basis of the wording of the headings and of the notes thereto and, where there is doubt, in accordance with the criteria mentioned in Rules 2 (b) or 3 (a) and (b) of the General Rules for the Interpretation of the Nomenclature of the Common Customs Tariff, in so far as they are not contrary to the above-mentioned wording or notes.Egg products, such as the Hentex products, correspond directly to the wording of heading 04.05 BI since it refers specifically to ‘Eggs, not in shell; egg yolks: … Dried …’. Classification under heading 21.07, ‘Food preparations not elsewhere specified or included’, is ruled out because of the subsidiary nature of that heading.If any doubts are nevertheless harboured concerning the classification of the products in question under heading 04.05 BI they may be dispelled by General Rule 2 (b) which, with regard to ‘mixtures’, refers to the classification criteria set out in Rule 3 (a) and (b) which state:3. When, for any reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:(a) The heading which provides the most specific description shall be preferred to headings providing a more general description.(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets, which cannot be classified by reference to 3 (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable.’Consequently the products in question must be classified under heading 04.05 B I:— First, because they correspond specifically to the description contained in that heading and because that heading can thus be considered as the ‘heading which provides the most specific description’ within the meaning of the above Rule 3 (a);— Secondly, because eggs are the component which gives them their essential character and heading 04.05 B I is thus applicable to them pursuant to the above-mentioned Rule 3 (b).
(b)Second question
It is clear from the decision of the Produktschap of 14 February 1978 that the dispute does not concern the ‘grant’ of the monetary compensatory amounts but rather their .‘payment’. In accordance with Article 11 (2) of Regulation No 1380/75 such amounts must be paid when the ‘proof’ referred to in that provision has been provided. The fact to be proved is the date on which the products in question were put to the intended use or reached their destination, that is to say in this case the date on which they were imported into the United Kingdom. As to form, the ‘proof’ must be produced by a special kind of Community transit document known as a “control copy” with the section headed “Control as to use and/or destination” in which the specific information required must be inserted.In the present case the Produktschap refused to pay the amounts in dispute on the sole ground that the information required had not been expressly inserted in the appropriate section on the control copy. A control copy concerning 40 boxes of Hentex, produced as an annex to the written observations, and the accompanying letter from the British customs authorities of 8 November 1977 show that:— The section “Control as to use and/or destination” contains the hand-written statement: “Duty-free, levy exempt, satisfied”, and a sump indicating “Exempt II, 02.11.77, Hull”;— The accompanying letter from the British customs states that the goods were admitted for domestic consumption in the United Kingdom under tariff heading 21.07 FI (a) 1 (now heading 21.07 G I (a) 1).That information is equivalent to the requirements mentioned in Article 11 (2) of Regulation No 1380/75, namely that the goods exported to the Netherlands which, it is provided, qualify for the monetary compensatory amounts, were in fact imported into the United Kingdom. The above-mentioned Article 11 (2) is capable of being interpreted in this way by the Netherlands, which, as the exporting State is responsible for the grant and payment of such amounts, is bound to pay them.Furthermore, it is to be observed that the “proof” in question does not depend on a check by means of a second sample effected by the customs authorities of the importing State (the United Kingdom) with regard to the tariff classification accepted by the customs authorities of the exporting State (the Netherlands). The Produktschap cannot rely in the present case on any evidence other than the control copy (cf. judgment of 22 October 1970, Craeynest, [1970] ECR 912).Henningsen accordingly suggests that the reply to the questions submitted should be as it has suggested above in its observations.
(a)First question
Although the question is submitted as a choice between two tariff headings, 04.05 and 21.07 of the Common Customs Tariff, it cannot be ruled out in theory that a product with a composition such as that at issue in the present case might be classified under another tariff heading, in particular heading 23.07 (‘… other preparations of a kind used in animal feeding’) on the basis of the specific use of the product, of the part played by its various components having regard to that use and of the result of a chemical analysis of its content in sucrose and starch.With regard to the distinction between tariff headings 04.05 and 21.07 it may be inferred from the definition of the scope of the latter heading provided by the Explanatory Notes to the Nomenclature of the Customs Co-operation Council and of the definition of subheading 21.07 G I that the latter covers inter alia food preparations which do not contain milk-fats at all or contain less than 5 %. A mixture of whole hen-egg powder, soya meal, glucose syrup, salt and lecithin would in fact result in a preparation which might be described as a ‘food preparation’ within the meaning of that tariff heading.With regard to heading 04.05 it is necessary to take account on the one hand of its wording which refers to ‘birds’ eggs and egg yolks' and not of egg products in general, and on the other of the ‘Explanatory Notes to the Nomenclature of the Customs Cooperation Council’ on that heading and on subheading 04.05 B I.It is clear from the wording of the tariff heading that, whilst the addition of certain components is not per se excluded, it is nevertheless necessary to establish in all cases the essential character of the ‘birds’ eggs and egg yolks' and that the product should not be an egg product in general.Secondly it is clear from the above-mentioned Explanatory Notes that only certain components may be added, in accordance with their nature or function: such components must be for preserving the product.Having regard to those factors it is clear that a product such as the one in question, having regard to its composition, in particular its content in soya meal (25 %), precludes its classification under subheading 04.05 BI. The product is rather a ‘preparation’ within the meaning of the nomenclature of the Common Customs Tariff. However, it is impossible to consider that ‘preparation’ as a ‘preparation of flour’ within the meaning of heading 19.02 since the addition of 25 % of soya meal does not give it the character essential for such a preparation: it is impossible to classify it otherwise than under heading 21.07 as a ‘Food preparation not elsewhere specified or included’.
(b)Second question
In accordance with Article 11 (2) of Regulation No 1380/75 the exporting Member State which wishes to exercise its option to pay the monetary compensatory amounts on importation into another Member State can do so only upon production of proof that customs import formalities have been completed and that the duties and charges having equivalent effect payable in the importing Member State have been charged. The formalities concerning such amounts must in principle be dealt with by the importing Member State whilst the exporting Member State's only role is to effect the actual payment. This means, inter alia, that it is for the importing Member State to decide whether or not such amounts apply to a given operation.That interpretation is confirmed not only by the wording of the relevant provisions, from which it is clear that a compensatory amount paid by the exporting Member State is that which must (‘should’) be paid by the importing Member State, but also by the system considered as a whole.Regulation No 1112/73, which inserted Article 2 a in its present form, into Regulation No 974/71, has in fact abolished the granting of compensatory amounts by the exporting Member State alone, without affecting the rules on the addition and deduction of the amounts, and has returned to a system whereby each Member State charges and grants ‘its’ compensatory amounts.The formalities prescribed by Regulation No 1380/75 were clearly envisaged with a view to such a system. In transactions such as the one in question there are indubitably two distinct amounts, applied in accordance with separate provisions, namely:(i) A compensatory amount on export, which is ‘determined’ on the day of export (as defined in Article 8 (2)) the ‘payment’ of which is conditional upon the production of proof that the product in respect of which the customs export formalities were completed has left the territory of the exporting Member State in which the formalities were completed (Article 10(1)).(ii) A compensatory amount on import which is ‘determined’ on the day of import (as defined in Article 8 (5)), the ‘payment’ of which is conditional on the production of proof that customs formalities have been completed and that the duties and charges having equivalent effect payable in the importing Member State have been charged (Article 10(2)).The option made available by the above-mentioned Article 2 a — namely payment by the exporting Member State of the compensatory amounts on import — must and can be considered only in the context of this system. That option in no way constitutes a derogation from the rules on the ‘determination’ of the compensatory amounts on import; it derogates from the rules on the ‘payment’ of that amount only to enable the exporting Member State to make the payment. The provisions on proof remain the same under the general rules and the optional rules (cf. Article 10 (2) and the first subparagraph of Article 11 (2)); only the manner in which proof must be produced is altered (second subparagraph of Article 11 (2)).The procedure prescribed in Article 11(5) of Regulation No 1380/75, as inserted by Regulation No 1498/76, does not apply to this case. It authorizes the replacement of a lost control copy and was not intended to permit the exporting Member State to place itself in the position of the importing Member States in completing the formalities prescribed under the rules for the latter State.Under this system a single tariff classification is adopted in the importing Member State for compensatory amounts on import whether the latter State or the exporting Member State makes itself responsible for the payment of these amounts. There is indeed a risk that in the same transaction the tariff classification accepted for the amounts on import will differ from that applied in respect of the amounts on export. Such a risk is, however, inevitable in the present state of the rules, whereby the importing Member State is not obliged in applying ‘its’ compensatory amounts to adopt the tariff classification accepted by the exporting Member State in applying ‘its’ amounts.In conclusion the Commission adds that, despite its efforts, the tariff classification adopted by one Member State is not at present binding on another. It notifies its classification opinion where the Member States concerned differ. Such an opinion does not, however, constitute a decision binding those States. The Commission explains, that on the other hand, it considers itself bound by its interpretation with regard to its interventions within the framework of the financing of the common agricultural policy and to the reimbursement of monetary compensatory amounts.
Ill —Oral procedure
At the hearing on 15 February 1979 (V.o.F. Henningsen Van den Burg and the Commission of the European Communities submitted their oral observations.The Advocate General delivered his opinion at the hearing on 22 March 1979.
Decision
Costs
Operative part
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