RUMA GmbH v Oberfinanzdirektion Nürnberg (C-183/06)

Contents

Judgment of the Court (Fifth Chamber)15 February 2007^noteIn Case C-183/06,REFERENCE for a preliminary ruling under Article 234 EC from the Finanzgericht München (Germany), made by decision of 23 February 2006, received at the Court on 13 April 2006, in the proceedingsRUMA GmbHvOberfinanzdirektion Nürnberg,THE COURT (Fifth Chamber),composed of R. Schintgen, President of the Chamber, A. Borg Barthet (Rapporteur) and E. Levits, Judges,Advocate General: V. Trstenjak,Registrar: R. Grass,having regard to the written procedure,after considering the observations submitted on behalf of:— RUMA GmbH, by M. Beer, Rechtsanwalt,— the Hungarian Government, by J. Fazekas, acting as Agent,— the Commission of the European Communities, by J. Hottiaux, acting as Agent, assisted by B. Wägenbaur, avocat,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following

Judgment

1This reference for a preliminary ruling concerns the interpretation of headings 8529 and 8538 of the Combined Nomenclature 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 1789/2003 of 11 September 2003 (OJ 2003 L 281, p. 1) (‘the CN’).

2The reference was made in the course of proceedings between RUMA Finanzierungs- & Beteiligungsgesellschaft mbH (‘RUMA’) and the Oberfinanzdirektion Nürnberg (Principal Revenue Office, Nuremberg — ‘the Oberfinanzdirektion’) regarding the tariff classification of a keypad membrane for a mobile telephone with organiser functions.

Legal context

3The Combined Nomenclature, established by Regulation No 2658/87, is based on the Harmonised Commodity Description and Coding System (‘the HS ’) drawn up by the Customs Cooperation Council (now the World Customs Organisation) and 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). It uses the 6-digit headings and subheadings of the HS and only the seventh and eighth digits forming subdivisions are specific to it.

4The version of the Combined Nomenclature applicable at the time of the facts in the main proceedings is set out in Annex I to Regulation No 1789/2003. Part Two of that annex includes Section XVI, ‘Machinery and mechanical appliances; electrical equipment; parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles’, which contains two chapters, Chapter 85 of which is entitled ‘Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles’.

5Chapter 85 of the CN contains inter alia the following headings and subheadings:8525 | Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras:...852520 | Transmission apparatus incorporating reception apparatus:...85252091 | — —For cellular networks (mobile telephones)... |8529 | Parts suitable for use solely or principally with the apparatus of headings 8525 to 8528:...8529 | — Other:...85299040 | — — — Parts of apparatus of subheadings 85251050, 85252091, 8525 20 99, 85254011 and 85279092.

6Heading 8537 of the CN is entitled ‘Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity ...’.

8All the sections and, within each section, all the chapters of the CN are preceded by some notes, namely section or chapter notes. Note 2 to Section XVI of the CN provides inter alia:‘...(a) Parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8485, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings.(b) Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading ... are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate ......’

9The general rules for the interpretation of the CN, which are in Part One, Section I, A, of the CN, state inter alia:‘Classification of goods in the Combined Nomenclature 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....3. When ... 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. ......6. For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section and chapter notes also apply, unless the context requires otherwise.’

10Council Regulation (EC) No 2505/96 of 20 December 1996 opening and providing for the administration of Community tariff quotas for certain agricultural and industrial products (OJ 1996 L 345, p. 1), as amended by Council Regulation (EC) No 2243/2004 of 22 December 2004 (OJ 2004 L 381, p. 1) (‘Regulation No 2505/96’), includes, in Annex I, serial number 09.2995 relating to keypads, the relevant parts of which for the case in the main proceedings are the following:Serial number | CN code | Taric subdivision | Description09.2995 | | | Keypads,| ex85369085 | 95 | — comprising a layer of silicone and polycarbonate keytops or| ex85389099 | 93 | — wholly of silicone or wholly of polycarbonate, including printed keys, For the manufacture or repair of mobile radio-telephones of subheading 85252091 ...

11Commission Regulation (EC) No 1578/2006 of 19 October 2006 concerning the classification of certain goods in the Combined Nomenclature (OJ 2006 L 291, p. 3), provides inter alia in the second and third recitals of the preamble:(1) In order to ensure uniform application of the Combined Nomenclature annexed to Regulation (EEC) No 2658/87, it is necessary to adopt measures concerning the classification of the goods referred to in the Annex to this Regulation....(3) Pursuant to those general rules, the goods described in column 1 of the table set out in the Annex to this Regulation should be classified under the CN codes indicated in column 2, by virtue of the reasons set out in column 3 of that table’

12The annex to Regulation No 1578/2006 provides inter alia the following:‘Description of the goods | Classification (CN Code) | Reasons(1) | (2) | (3)1. Keypad membrane (dimensions: approximately 65 x 40 x 1 mm) made of polycarbonate, without any electric conductive elements. The product has moulded keys on one side and non-conductive contact pins on the other side. | 85299040 | Le classement est determine par les règles générales 1 et 6 pour ľinterprétation de la nomenclature combinée, par la note 2 b) de la section XVI, ainsi que par le libellé des codes NC 8529, 852990 et 35299040.The product has printed keycaps constituting an alpha/numeric keyboard, call buttons and other features typical of mobile telephones. | | Classification is determined by General Rules 1 and 6 for the interpretation of the Combined Nomenclature, Note 2 (b) to Section XVI and the wording of CN Codes 8529, 352990 and 85299040.

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

13In August 2004, RUMA applied for binding tariff information concerning a keypad membrane which it described as a ‘mobile telephone keypad in the form of a contact pad’.

14In tariff information of 28 September 2004, the Oberfinanzdirektion classified the product in question under subheading 85389099 of the CN as a part suitable for use solely with the apparatus of heading 8537'.

15As it was of the opinion that that keypad membrane should be classified under subheading 85299040 of the CN as a part for products of heading 8525, RUMA lodged an objection against that binding tariff information. As that objection was rejected, RUMA brought an action before the Finanzgericht München (Finance Court, Munich).

16The national court describes the products in question as follows:‘According to the information sheets, photographs and sample product submitted to the Zolltechnische Prüflings- und Lehranstalt (Customs Testing and Teaching Institution) the disputed product, “a mobile telephone keypad in the form of a contact pad”, is a keypad made of polycarbonate. That polycarbonate membrane has moulded keys on its upper side and non-conductive contact pins on its underside. When a key is pressed the non-conductive contact pin operates a contact point on a contact membrane which lies under the polycarbonate membrane and which is not the subject of the binding tariff information. The keypad membrane is used as a pad to operate and cover the keys of mobile telephones’

17The national court takes the view that, according to note 2(b) to Section XVI of the CN, the product in question should be classified not on the basis of which of the machines listed in that section it is ultimately intended for use with, but on the basis of the machine which it is directly intended for use with. It considers a keypad membrane serves the direct purpose of completing a keyboard in accordance with heading 8537 with the result that the product in question should be classified under heading 8538 of the CN.

18According to the national court, such a classification is confirmed by Regulation No 2243/2004 pursuant to which, under serial number 09.2995, ‘keypads ... wholly of polycarbonate, including printed keys, for the manufacture or repair of mobile radio-telephones’ are classified under heading 8538 of the CN.

19Nevertheless, the national court considers that it is prevented from confirming the binding tariff information issued by the Oberfinanzdirektion inter alia on account of the fact that the Customs Tariff and Statistical Nomenclature Committee has been dealing with the tariff classification of the disputed product for years, but has not managed to come to a decision.

20In those circumstances, the Finanzgericht München decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:‘Is the [CN] to be interpreted as meaning that keypads which have non-conductive contact pins on the underside are to be classified under heading 8538?’

The question referred for a preliminary ruling

Observations submitted to the Court

21RUMA submits that the keypad membrane at issue in the main proceedings is a ‘part’ of a mobile telephone and must therefore be classified as such. According to RUMA, that membrane is necessary for the use of a mobile telephone with organiser functions and as it has been adapted especially for that purpose it cannot be used other than as part of a mobile telephone. Furthermore, it fulfils a protective function, in particular as it prevents dust from entering the mobile telephone.

22RUMA is of the opinion that the keypad membrane at issue should therefore be classified under heading 8529 of the CN, as it is a part suitable for use solely with apparatus of heading 8525. It adds that classifying that membrane as part of a keyboard under heading 8538 of the CN would amount to categorising a mobile telephone keypad as an independent piece of apparatus, which cannot be the case given that the keypad obtains its function only when it is incorporated into the mobile telephone.

23The Commission of the European Communities observes inter alia that it follows from the very wording of subheading 85299040 that it includes the keypad membrane at issue in the main proceedings. The fact that that membrane is manifestly not an independent object, but a part of a mobile telephone, is a decisive factor according to the Commission. Firstly, the membrane is essential as it plays a direct role in the use of the mobile telephone. Secondly, it protects it from moisture and dust, thus preserving its ability to function.

24The Commission adds that, according to Case C-339/98 Peacock [2000] ECR I-8947, paragraph 21, the term part implies a “whole” for the operation of which the part is essential. It takes the view that a mobile telephone is such a whole as it is a piece of apparatus which is complete and directly operational from a technical point of view and the keypad membrane is essential for it to function.

25The Hungarian Government observes that a part of a piece of apparatus covered by heading 8525 should, given the principles set out in the explanatory notes to the CN and the HS, be classified under heading 8529. It adds that, in accordance with the general rules for the interpretation of the CN, heading 8538 should be ruled out as regards the keypad membrane at issue in the main proceedings, since the wording of heading 8529 describes the product concerned most precisely as a part suitable for use with the apparatus of heading 8525.

The Court's answer

26The national court is essentially asking whether the keypad membrane at issue in the main proceedings should be classified under subheading 85389099 of the CN as part of a keyboard in accordance with heading 8537 or under subheading 85299040 as part of a mobile telephone in accordance with heading 8525.

27It should be noted at the outset that it is settled case-law that, in the interests of legal certainty and ease of verification, the decisive criterion for the classification of goods for customs purposes is in general to be found in their objective characteristics and properties as defined in the wording of the relevant heading of the combined nomenclature and of the notes to the sections or chapters (see, inter alia, Case 0396/02 DFDS [2004] ECR I-8439, paragraph 27; Case C-495/03 Intermodal Transports [2005] ECR I-8151, paragraph 47; and Case C-445/04 Possehl Erzkontor [2005] ECR I-10721, paragraph 19).

28In the present case, clearly the keypad membrane at issue in the main proceedings is not expressly referred to either in the wording of the headings of the CN or in that of the notes to the sections or chapters.

29The wording of heading 8529 of the CN under which, according to RUMA, the keypad membrane at issue in the main proceedings comes refers to ‘[p]arts suitable for use solely or principally with the apparatus of headings 8525 to 8528’, which inter alia includes mobile telephones. The wording of heading 8538, under which the keypad membrane should, according to the Oberfinanzdirektion, be classified, relates to ‘[p]arts suitable for use solely or principally with the apparatus of heading 8535, 8536 or 8537’, which include inter alia ‘[b]oards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity’.

30According to note 2(b) to Section XVI of the CN, ‘[o]ther parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading ..., are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate’.

31It must be borne in mind that the term ‘part’ implies a whole for the operation of which the part is essential (Peacock, paragraph 21, and Case 0276/00 Turbon International [2002] ECR I-1389, paragraph 30).

32In this connection, it must be noted that the assembling of the keypad membrane at issue in the main proceedings with the other components of a mobile telephone serves to ensure that it is a functional unit. The term ‘functional unit’, as defined by the case-law of the Court, applies where a machine or appliance consists of separate components which are designed to contribute together to a single clearly defined function (Case 223/84 Telefunken Fernseh und Rundfunk [1985] ECR 3335, paragraph 29).

33In the present case, the membrane plays a direct role in the use of the mobile telephone, in that it makes it possible to activate the contact points and thereby access the mobile telephones various functions. It is impossible to access the various functions of the telephone without the keypad membrane at issue in the main proceedings. Consequently, it is unquestionably an essential component for the operation of the mobile telephone.

34On the other hand, a mobile telephone keypad is not a functional unit which is distinct from the piece of apparatus into which it is incorporated inasmuch as it cannot be used independently or for a function other than that which may be performed by the telephone as a whole (see, inter alia, to that effect, Telefunken Fernseh und Rundfunk, paragraph 31).

35According to the wording of point 3(a) of the general rules for the interpretation of the CN in Part One, Section I, A, of the CN, which specifically covers the situation where goods are prima facie classifiable under two or more headings, ‘the heading which provides the most specific description shall be preferred to headings providing a more general description’. In the present case, it must be pointed out that, as regards the objective characteristics and properties of the keypad membrane at issue in the main proceedings, and in particular given the fact that it refers expressly to ‘[p]arts of apparatus of subheadings ... 85252091’, namely to parts of mobile telephones, subheading 85299040 provides a more specific description than subheading 85389099 which covers a much wider and more varied range of goods, as shown by its title read in conjunction with that of heading 8537.

36The intended use of a product may also constitute an objective criterion for classification if it is inherent to the product, and that inherent character must be capable of being assessed on the basis of the product's objective characteristics and properties (see Case C-459/93 Thyssen Haniel Logistic [1995] ECR I-1381, paragraph 13).

37In the present case, the construction of the keypad membrane at issue in the main proceedings, in particular its shape, which is specially adapted to a type of mobile telephone, and its method of operation preclude any use of that membrane other than as a component of that telephone. The characteristics of the keypad membrane also have the function of ensuring that the telephone has a certain imperviousness as they prevent in particular dust and moisture from entering it.

38It follows from the above considerations that the keypad membrane at issue in the main proceedings must be classified under subheading 85299040 of the CN as part of a mobile telephone in accordance with heading 8525.

39That finding is not called into question by the national court's view that the classification of the keypad membrane at issue in the main proceedings under heading 8538 of the CN is confirmed by Regulation No 2505/96, in which, under serial number 09.2995, ‘keypads ... wholly of polycarbonate, including printed keys, for the manufacture or repair of mobile radio-telephones’ are classified under heading 8538 of the CN, given that that provision, which was inserted into Annex I to Regulation No 2505/96 by Regulation No 2243/2004, was not applicable at the time of the facts in the main proceedings. Furthermore, it must, for the sake of completeness, be added that Regulation No 1578/2006, which has a date of adoption later than that of Regulation No 2243/2004, expressly provides for the classification of keypad membranes of polycarbonate, without any conductive elements and with moulded keys on one side and non-conductive contact pins on the other side, under subheading 85299040 of the CN.

40In the light of all those considerations, the answer to the question referred for a preliminary ruling must be that the CN must be interpreted as meaning that keypad membranes of polycarbonate which have moulded keys on their upper side and non-conductive contact pins on their underside and are intended for incorporation into mobile telephones are covered by subheading 85299040.

Costs

41Since 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 (Fifth Chamber) hereby rules: The Combined Nomenclature 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, as amended by Commission Regulation (EC) No 1789/2003 of 11 September 2003, must be interpreted as meaning that keypad membranes of polycarbonate which have moulded keys on their upper side and non-conductive contact pins on their underside and are intended for incorporation into mobile telephones are covered by subheading 85299040,