Turbon International GmbH v Oberfinanzdirektion Koblenz (C-250/05)

Contents

Judgment of the Court (Second Chamber)26 October 2006^noteIn Case C-250/05,REFERENCE for a preliminary ruling under Article 234 EC from the Hessisches Finanzgericht, Kassel (Germany), made by decision of 14 April 2005, received at the Court on 15 June 2005, in the proceedingsTurbon International GmbH, as universal successor in title to Kores Nordic Deutschland GmbH,vOberfinanzdirektion Koblenz,THE COURT (Second Chamber),composed of C.W.A. Timmermans (Rapporteur), President of the Chamber, R. Schintgen, J. Klučka, R. Silva de Lapuerta and L. Bay Larsen, Judges,Advocate General: J. Kokott,Registrar: K. Sztranc-Sławiczek, Administrator,having regard to the written procedure and further to the hearing on 1 June 2006,after considering the observations submitted on behalf of:— Turbon International GmbH, as universal successor in title to Kores Nordic Deutschland GmbH, by D. Quednau and J. Metzner, Steuerberater,— the United Kingdom Government, by R. Caudwell, C. White and T. Harris, acting as Agents, and by O. Thomas, Barrister,— the Commission of the European Communities, by J. Hottiaux, acting as Agent, and by B. Wägenbauer, Rechtsanwalt,after hearing the Opinion of the Advocate General at the sitting on 8 June 2006,gives the following

Judgment

1The reference for a preliminary ruling concerns the interpretation of headings 3215 and 8473 of the Combined Nomenclature (the ‘CN’), set out in Annex I to Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ 1987 L 256, p. 1), as amended by Commission Regulation (EC) No 1734/96 of 9 September 1996 (OJ 1996 L 238, p. 1).

2That question arose in proceedings between Turbon International GmbH (‘Turbon International’), established in Hattingen, acting as universal successor in title to Kores Nordic Deutschland GmbH, and the Oberfinanzdirektion Koblenz concerning the tariff classification of ink cartridges without an integrated print head for use in Epson Stylus Color inkjet printers.

Legal context

The CN

3The CN, established by Regulation No 2658/87, is designed to meet the requirements of both the Common Customs Tariff and the external trade statistics of the Community. It is based on the Harmonised Commodity Description and Coding System (hereinafter the ‘HS’) drawn up by the Customs Cooperation Council, now the World Customs Organisation, established by the International Convention concluded at Brussels on 14 June 1983 and approved on behalf of the Community by Council Decision 87/369/EEC of 7 April 1987 (OJ 1987 L 198, p. 1).

4In the version applicable at the material time in the main proceedings, which is the version in Annex I to Regulation No 1734/96, the CN included inter alia, in section VI, Chapter 32, entitled ‘Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks’, the heading 3215, entitled ‘Printing ink, writing or drawing ink and other inks, whether or not concentrated or solid’, and subheadings 32159010 and 32159080, entitled ‘Writing and drawing ink’ and ‘Other’ respectively.

5In section XVI, Chapter 84, entitled ‘Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof’, the CN contained, inter alia, heading 8471, entitled ‘Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included’, and subheading 84716040, entitled ‘Printers’. It also included heading 8473, entitled ‘Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with the machines or apparatus of heading Nos 8469 to 8472’ and subheading 84733090, entitled ‘Other’.

6The general rules for the interpretation of the CN, which are set forth in Part I of Title I A thereof provide, inter alia:‘Classification of goods in the [CN] shall be governed by the following principles:1. The titles of sections, chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the following provisions.2.(a) …(b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3.3. When by application of rule 2(b) or for any other 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. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods;(b) mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, 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;…’

The explanatory notes to the HS

7Under Article 6(1) of the HS Convention of 14 June 1983, a committee entitled the Harmonised System Committee, composed of representatives of each contracting party, was set up under the auspices of the Customs Cooperation Council. That Committee's task consists in particular of proposing amendments to that convention and preparing explanatory notes, classification opinions and other advice on the interpretation of the HS.

8According to paragraph VIII of the HS explanatory note relating to general rule 3(b), ‘the factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods’.

The dispute in the main proceedings and the question referred for a preliminary ruling

9By the judgment in Case C-276/00 Turbon International [2002] ECR I-1389, the Court ruled that Annex I to Regulation No 2658/87, as amended by Regulation No 1734/96, had to be interpreted as meaning that an ink cartridge without integrated print head, consisting of plastic casing, foam, a metal screen, seals, tape seal, labels, ink and packing material, which, as regards both the cartridge and the ink, could only be used in a printer with the same characteristics as Epson Stylus Color inkjet printers, was to be classified under subheading 32159080 of the CN.

10It is apparent from the decision of the referring court that, following that judgment, Turbon International challenged before the referring court that part of the Court of Justice's reasoning set out in paragraph 30 of that judgment, according to which the mechanical and electronic functioning of the printer is not dependent on the presence of an ink cartridge such as that at issue in the main proceedings. Turbon International maintains that such a premiss is factually inaccurate and that the Court wrongly inferred from this that an ink cartridge such as that at issue in the main proceedings cannot be regarded as ‘part’ of a printer within the meaning of CN heading 8473.

11Whilst hearing the evidence at the hearing, the referring court was given a demonstration of how an Epson Stylus Color printer operated under various operating conditions.

12According to that court, that demonstration confirmed the statements of Turbon International, namely that, when connected to a computer, a printer which contains no or only one cartridge does not respond to the ‘print’ command issued from that computer. In that situation, data are not transferred from the computer to the printer and the print head does not move from side to side nor is any paper drawn into the printer. The printer is, as it were, dead.

13The referring court adds that if, on the other hand, the cartridges are inserted in the printer, irrespective of whether they are full or empty, the printer initialises itself as soon as they have been inserted, that is to say, it executes an internal mechanical process by which it ensures that there is no longer any air between the print head inside the printer and the cartridges in the ink delivery system. The data are transferred from the computer to the printer and the print head starts to move. Furthermore, even if empty ink cartridges are used, the printer still draws in the paper. The difference is, however, that if empty ink cartridges are used, the paper emerges without any print on it.

14Taking account of those findings, the referring court asks whether the ink cartridges concerned should in fact be treated as part of a printer and therefore be classified under heading 8473 of the CN.

15As it formed the view that the resolution of the dispute before it depended on the interpretation of headings 3215 and 8473 of the CN, the Hessisches Finanzgericht (Hesse Finance Court), Kassel, decided to stay proceedings and to refer the following question to the Court for a preliminary ruling:‘In [Turbon International] it was held that Annex I to Council Regulation (EEC) No 2658/87 … as amended by Commission Regulation (EC) No 1734/96 … had to be interpreted as meaning that an ink cartridge without integrated print head, consisting of plastic casing, foam, a metal screen, seals, tape seal, labels, ink and packing material, which, as regards both the cartridge and the ink, could only be used in a printer with the same characteristics as Epson Stylus Color inkjet printers, is to be classified under subheading 32159080 of the CN. Contrary to that ruling, should not the ink cartridge described above in fact be classified as a part or accessory of a printer under CN heading 8473 because the mechanical and electronic functioning of the printer is dependent upon the presence of a cartridge of that kind?’

The question referred for a preliminary ruling

16It is settled case-law that, in the interests of legal certainty and for ease of verification, the decisive criterion for the classification of goods for customs purposes is in general to be sought in their objective characteristics and properties as defined in the wording of the relevant heading of the CN. The explanatory notes drawn up by the Commission of the European Communities as regards the CN and by the World Customs Organisation as regards the HS are an important aid to the interpretation of the scope of the various tariff headings but do not have legally binding force (see Case C-14/05 Anagram International [2006] ECR I-6763, paragraph 20).

17It is also apparent from the case-law of the Court of Justice that the word ‘part’, within the meaning of heading 8473 of the CN, implies a whole for whose operation the part is essential (C-339/98 Peacock [2000] ECR I-8947, paragraph 21).

18In the present case, the circumstances of the case communicated by the referring court reveal that the cartridge itself is necessary for the printer to function. It is therefore capable of being regarded as a part and, accordingly, classified in subheading 84733090 of the CN.

19However, as the Advocate General observes in points 72 to 74 of her Opinion, the ink contained in the cartridge cannot be regarded as part of a printer. An ink cartridge, such as that at issue in the main proceedings, is thus made up of two elements which, when considered separately, may each be classified under one heading, namely subheadings 32159080 or 84733090 of the CN, but neither of those headings covers the goods as a whole.

20Since the product at issue is composed of different materials and neither of the two subheadings mentioned above is more specific than the other, the sole provision to which recourse may be had for the purpose of classifying the goods is general rule 3(b) (see, to that effect, Case 253/87 Sportex [1988] ECR 3351, paragraph 7).

21Under that general rule, in carrying out the tariff classification of goods it is necessary to identify, from among the materials of which they are composed, the one which gives them their essential character. This may be done by determining whether the goods would retain their characteristic properties if one or other of their constituents were removed from them (Sportex, paragraph 8; see also, to that effect, C-288/99 VauDe Sport [2001] ECR I-3683, paragraph 25, and Turbon International, paragraph 26).

22In the same way, as stated by paragraph VIII of the explanatory note to the HS on general rule 3(b), the factor which determines the essential character of the goods may, depending on the type of goods, be determined for example, by the nature of the material or component, its bulk, quantity, weight or value, or the role of a constituent material in relation to the use of the goods.

23Even if an ink cartridge, such as that at issue in the main proceedings, is constructed in such a way that the printer does not function in the absence of that cartridge, the fact remains that the ink contained in the cartridge is the most important factor for the purpose of using the goods at issue. In fact, the ink cartridge is not inserted in the printer in order to make the printer itself function but specifically to supply it with ink. Therefore, the ink must be regarded as determining the essential character of an ink cartridge, such as that at issue in the main proceedings.

24That interpretation is not affected by the argument of the defendant in the main proceedings, according to which ink cartridges with an integrated print head are classified under heading 8473 of the CN. Since such ink cartridges are composed of materials other than those at issue in the main proceedings, the tariff classification of the former does not necessarily determine the tariff classification of the latter.

25The answer to the question referred must therefore be that Annex I to Regulation No 2658/87, as amended by Regulation No 1734/96, must be interpreted as meaning that an ink cartridge without an integrated print head consisting of plastic casing, foam, a metal screen, seals, tape seal, labels, ink and packing material, which, as regards both the cartridge and the ink, can only be used in a printer with the same characteristics as Epson Stylus Color inkjet printers, must be classified under subheading 32159080 of the CN.

Costs

26Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (Second Chamber) hereby rules: Annex Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff, as amended by Commission Regulation (EC) No 1734/96 of 9 September 1996, must be interpreted as meaning that an ink cartridge without an integrated print head consisting of plastic casing, foam, a metal screen, seals, tape seal, labels, ink and packing material, which, as regards both the cartridge and the ink, can only be used in a printer with the same characteristics as Epson Stylus Color inkjet printers, must be classified under subheading 32159080 of the Combined Nomenclature.