JUDGMENT OF 14. 7. 1971 — CASE 13/71 HENCK v HAUPTZOLLAMT EMMERICH

In Case 13/71 Reference to the Court under Article 177 of the EEC Treaty by the Bundesfinanzhof, Seventh Chamber, for a preliminary ruling in the action pending before that court between

THE COURT, composed of: R. Lecourt, President, A. M. Donner and A. Trabucchi, Presidents of Chambers, R. Monaco (Raporteur), J. Mertens de Wilmars, P. Pescatore and H. Kutscher, Judges, Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Summary of the facts and procedure

The facts which form the basis of this case may be summarized as follows:

1) On 23 and 31 March 1964, the Gunther Henck undertaking obtained customs clearance for the release to the market of consignments of a commodity described in the customs declaration as ‘maize grits, a food product intended for human consumption, without sugar’ or as ‘maize grits, a food product which is not described or included elsewhere, intended for human consumption, without sugar’. In accordance with the customs declaration, the customs office classified these products in subheading 21.07 B of the German customs tariff, which corresponds to the Common Customs Tariff and which provides for the payment of customs duties in addition to die countervailing charge. Subsequently, on the basis of reports from the Zolltechnische Prüfungs- und Lehranstalt, Cologne, the customs authorities decided to classify the products in question as ‘maize groats or meal’ in subheading 11.02 A III b of that tariff and thus to demand additional duty as a levy. When the proceedings relating to this tariff classification had been brought before the Bundesfinanzhof in the last instance the latter decided to stay the proceedings and referred the following questions to the Court in application of Article 177 of the EEC Treaty:

‘(1) Must the phrase “maize groats” referred to in Article 1(d) of Regulation No 19/62 of the Council of the EEC in conjunction with the annex to that regulation (No ex 11.02, ex A ex HI (b) of the Common Customs Tariff) be interpreted as meaning that these are indeed such products when they consist in floury fragments derived from rough grinding of hulled maize grains from which the germ has been removed and when the granules are coarser than those of maize meal of merchantable quality, when in other words they ought rather to be described as groats (“Griitze”)? Must fat content be taken into account in addition and in particular must a fat content of 0.9 % to 1.5 % be considered necessary and sufficient?

2) If the answer to the questions set forth under (1) above is in the negative: Must the phrase “hulled maize grain” (Getreidekorner, geschalt, von Mais"), referred to in the provision mentioned under (1) above be interpreted as meaning that this is indeed such a product when it displays the characteristics indicated in (1)?

3) If the answer to question (2) is in the negative: Must the phrase “kibbled maize grain” Getreidekorner, geschrotet von Mais"), referred to in the provision mentioned under (1) above be interpreted as meaning that this is indeed such a product when it displays the characteristics indicated under (1), that is in particular where the grain is hulled and where the maize germ has been removed therefrom?

4) If the answer to question (3) is in the negative: May it be deduced from the fact that Community Regulation No 19/62 in conjunction with the annex to that regulation mentions heading 11.02 of the Common Customs Tariff that therefore paragraphs 5 and 6 of the general rules for the interpretation of the Common Customs Tariff must also be applied, with the result that a commodity which, in a heading of the Common Customs Tariff, if it is not included in any subheading, must be classified in the same heading as the article which is the most similar thereto?’

2) The order for reference was received at the Registry of the Court of Justice on 19 March 1971.

The Giinther Henck undertaking 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.

After hearing the report of the Judge-Rapporteur and the views of the Advocate-General, the Court decided to open the oral procedure without instituting a preparatory inquiry.

The Giinther Henck undertaking, represented by Fritz Modest and Claus Brandel and the Commission of the European Communities, represented by its Legal Adviser Peter Kalbe, acting as Agent, submitted oral observations at the hearing on 30 June 1971.

The Advocate-General delivered his opinion at the hearing on 7 July 1971.

II — Observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice

The observations submitted under Article 20 of the Protocol on the Statute of the Court may be summarized as follows:

Admissibility

A —. According to the Henck undertaking, the Bundesfinanzhof is not seeking the interpretation of the expression ‘maize groats’ but rather the application of Article 1 (d) of Regulation No 19/62 in this case. But questions of interpretation which are referred for a preliminary ruling may only be posed generally and in the abstract. The application of Community law to actual cases does not come within the jurisdiction of the Court under Article 177 of the Treaty. Moreover, the court making the reference, in wording its question, failed to take into consideration that Regulation No 19/62 was replaced from 1 July 1967 by Regulation No 120/67. Since the law applicable to the imports in question was that in force when the goods were imported, that is in 1964, the interpretation requested must solely inquire into what the contents of the Community law applicable were at that time. The question put by the German Court can therefore only be admitted in so far as it asks: These objections raise, according to the Henck undertaking, a problem which appears insignificant but which is in fact very important; that of an interpretation given by a court almost ten years after the dispute arose and which attributes to the applicable law a meaning which the parties could not have taken into consideration when the dispute emerged. The Henck undertaking points out in particular that because of the length of the national proceedings and the relatively short duration of Community rules, which are often replaced and amended, the German courts are no longer able to follow the developments in Community legislation and case-law and are therefore no longer even in a position to ensure the certainty of the law in cases to come. Having made these remarks as to the meaning and significance in this respect of the judgments of the Court in Cases 72/69 and 74/69, it deals with the problem of ‘the retroactive effect of decisions made by courts’ which, although it does not arise as often as that of the retroactive effects of the law, is however not new. It puts forward many arguments on this subject based both on national practice and Community practice with regard to regulations and it claims that it follows from those that the retroactive effect of legal provisions represents a quite exceptional and limited phenomenon. It concludes by recalling the need to avoid the application of the law in general and of Community law in particular injuring the legal protection of those subject to the law by weakening the certainty of the law in legal relationships. At the end of these observations, it summarizes its position in the matter as follows: the Henck undertaking imported the product in question when Regulation No 19/62 was in force; the German customs authorities did not consider that this product came within the common organization of agricultural market at the time when it was imported; the German customs authorities changed their mind about the classification of this product after the latter had been marketed: the Henck undertaking had not been able to protect itself against the amendments made a posteriori to the tariff classification by the German customs authorities by applying in particular to the latter for a binding tariff assessment in accordance with Paragraph 23 of the German Customs Law, since such assessments are, according to the case-law of the Court, of no effect in the Community sphere; in spite of the fact that at the time when the goods were imported the German customs authorities agreed with the plaintiff in the main action in classifying the goods in question under Tariff Heading 21.07 B and in spite of the fact that it could not be foreseen that there would be a dispute with the customs authorities on this point, the plaintiff has now, after seven years, to accept a decision on the classification which was applicable at that time; for these reasons, the Henck undertaking is of the opinion that the interpretation of Article 1(d) of Regulation No 19/62 must now be sought exclusively on the basis of the sources of information and the means of interpretation at the disposal of the parties and the German customs authorities at the beginning of 1964. In other words, the interpretation of the abovementioned provisions of Community law must be sought by the Court of Justice by referring to the time when the products in question were imported. Subject to these observations, the Henck undertaking leaves it to the Court to appraise the admissibility of the questions which have been referred.

‘What was the meaning of the expression “maize groats” within the meaning of Article 1 (d) of Regulation No 19/62 in March 1964, having regard to the annex of that regulation?’

B —. The Commission of the European Communities declares that it has no objections as to the admissibility of the questions which have been referred. It points out that when the goods in question were imported, maize products came within the common organization of the market laid down by Regulation No 19/62 in which Article 5 (1) of Regulation No 55/62 referring to: (b) maize ‘groats and meal’, (d) hulled maize grains and (g) kibbled maize grains provided that a levy should be charged. On the other hand, ‘food preparations not elsewhere specified or included’ in tariff heading 21.07 were not made subject to any Community price or import regulations. Thus in this case only the interpretation of heading 11.02 may be the subject matter of proceedings under Article 177 of the Treaty. It follows from the facts in the present case that the questions which have been referred do not so much relate to the distinction between the products in tariff heading 11.02 and those in heading 21.07. They are rather concerned with the distinction between the various products in tariff heading 11.02, as reenacted in Regulation No 55/62.

The substance of the case

A —. The Henck undertaking recalls the observations which it put forward in Case 12/71 as to the meaning of the concept of ‘kibbled maize grain’, at least in March 1964. The concept of ‘maize groats or meal’ must now be defined on the basis of that concept. For this purpose, the Henck undertaking makes inter alia the following points: (1) The essential characteristic of kibbled grain lies in the fact that this product is obtained by grinding whole unworked grains. In contrast to kibbled maize grain, maize groats or meal consist in floury fragments from the grinding of hulled grains which have been degermed. Thus the production of maize groats or meal presupposes that the maize grains have previously been treated. The fat content and content in crude fibres of maize groats or meal are for that reason very low. The former is normally less than 1.5 % in the dry material and the latter is never more than 1.2 % in the dry material. In support of these arguments, Henck undertaking refers to annexes 3 to 13 of its statement of defence and puts forward offers of proof. (2) Groats differ from meal solely because of their structure. The former consists in roughly-ground fragments of hulled grains which have been degermed: because of this, they cannot contain any floury constituents. A precise criterion for distinguishing between these two types of product did not exist in 1964. (3) The above-mentioned criteria are based on commercial practice. Neither Community law nor the explanatory notes on the German customs tariff offered a legal definition of ‘maize groats’ in March 1964. Even the Explanatory Notes to the Brussels Nomenclature which relate to tariff heading 11.02 merely state as regards the concept of ‘groats’ that the product referred to consists in a granular product which is obtained after the initial milling operation by a sifting process or by a second nulling operation. There was only a precise definition of the concept of ‘maize groats or meal’ in Community law from 1970 under Regulation No 1011/70 of the Commission of 29 May 1970. The Henck undertaking recalls the basic provisions of that regulation which concern the present case and observes that although it is correct that that regulation cannot be taken into consideration for the interpretation of the concept of ‘maize groats’ in March 1964, it reflects the view of commercial circles as it existed even before 1970 and repeats the definition previously accepted in those circles. In the absence of a different legal definition it is quite justified to take account of such an opinion for the interpretation of Article 1(d) of Regulation No 19/62. On the basis of these observations, the Henck undertaking concludes that the question which has been referred must be answered as follows:

‘The expression “maize groats” within the meaning of Article 1 (d) of Regulation No 19/62 of the Council of the EEC in conjunction with the annex to that regulation must be interpreted as meaning that it included in March 1964 a product consisting in fragments from the rough grinding of hulled maize grains which have been degermed in so far as the maximum fat content was 1.5 % in the dry material and the maximum crude fibre content was 1 % in the dry material.’

B —. The Commission of the European Communities considers that the products described in the order for reference must be considered according to the correct interpretation of Article 5 (1) of Regulation No 55/62 as ‘groats’ within the meaning of (b) of that provision. From the point of view of tariff classification, heading 11.02 of the Common Customs Tariff applies to the products which result from the milling of maize and which have undergone the processes laid down in that same heading with the exception of the flours referred to in tariff heading 11.01 and residues within the meaning of Chapter 23. Under the Explanatory Notes to the Brussels Nom enclature according to the degree of grinding or milling or the different stages of treatment, groats, meal and hulled or kibbled grain can be distinguished amongst the chief products resulting from dry milling. With regard to the classification of these products within tariff heading 11.02 and Regulation No 55/62, the Commission relies inter alia on the Explanatory Notes to the Brussels Nomenclature on heading 11.02 and points out that in the absence of a different definition it must be acknowledged that the Community legislature re-enacted tariff heading 11.02 in Regulation No 55/62 with the meaning attributed to it by the abovementioned notes. It follows from the description given by these notes that ‘groats’ or ‘Grobgrieß’ are small fragments obtained by the rough grinding of cereals and that ‘meal’ or ‘Feingrieß’ consists in even smaller fragments obtained from the further processing of the groats, whilst ‘kibbled grain’ or ‘geschrotete Getreidekorner’ are grains resulting from a more rough and irregular grinding process than that which gives rise to ‘groats’. According to the abovementioned notes, the product obtained by rough grinding of hulled maize grain from which the germ has been removed must therefore be considered as groats within the meaning of Article 5 (1) (d) of Regulation No 55/62. The Commission examines the development of the German Tariff terminology relating to heading 11.02 and states that the expression ‘Grobgrieß und Feingrieß’ which is contained in Regulation No 19/62 was recently replaced by the expression ‘Grütze und Grieß’ which the German legislature used in 1952 and observes that considerations based on market policy are also in favour of classifying the products in question under the category of ‘maize groats’. It supports this opinion not only with arguments drawn from Article 5 (1) (b) of Regulation No 55/62 but also with the consideration that these products, because of their importance from the commercial point of view, make it necessary to apply higher rates of levy in order to protect domestic production effectively. In addition it observes that according to Regulation No 55/62, the fat content is not a decisive distinguishing criterion since a content of 0.9 % to 1.5 % corresponds to normal variations in the fat content of maize grains. The distinction between maize ‘groats’ and ‘meal’ on account of the fat content was introduced for the first time in October 1964 with Regulation No 141/64 in order to adapt the rate of levy to differences in quality. Finally the Commission recalls the proposal that it submitted to the Council for a new nomenclature for the subheadings within tariff heading 11.02 supplemented by additional explanatory notes to Chapter 11 of the Common Customs Tariff (schedules 1 and 2 to the statement of defence). However it states that this new provision departs considerably from Regulation No 55/62 and that therefore the explanatory notes which it contains cannot be used without reservation with regard to the tariff headings in Regulation No 55/62. The Commission concludes that:

‘The product described by the Bundesfinanzhof must be considered as “maize groats” within the meaning of Article 5 (1) (b) of Regulation No 55. Since the answer to the first question is in the affirmative it is unnecessary to examine the other questions.’

Grounds of judgment

1. By order of 12 January 1971 received at the Court Registry on 19 March 1971, the Bundesfinanzhof of the Federal Republic of Germany referred several questions on the interpretation of Article 1 (d) of Regulation No 19 of the Council of 4 April 1962 (OJ 1962, No 30) under Article 177 of the Treaty establishing the European Economic Community.

On the jurisdiction of the Court

2. Whilst requesting the Court to define the scope of Article 1 (d) of Regulation No 19/62 with regard to a certain product, the Bundesfinanzhof gives details as to the composition of that product. The Giinther Henck undertaking maintains that because of these details, the question which has been referred does not in fact request the Court to define the meaning and scope of the abovementioned provision but to apply that same provision to the case in question.

3. Although Article 177 of the Treaty does not allow the Court to give a ruling on a specific case when it is called upon to interpret Community law, the need, however, to reach a helpful interpretation of the provisions in question justifies the statement by the national court of the legal context in which the interpretation which is sought must be placed. The details contained in the questions which have been referred enable the category of products which may come within the provision in question to be determined in a general and abstract way.

4. In addition, since Regulation No 19/62 was repealed and placed by other provisions of Community law from 1 July 1967, the Giinther Henck undertaking maintains that the Court cannot reply to the question which has been referred by basing its reply on legal rules which were not applicable when the product in question was imported.

5. The principle of legal certainty makes it necessary to refer to the state of the law in force when the provision in question was applied. The wording of the questions which have been referred does not prevent the interpretation which has been requested from being sought whilst observing that principle.

On the substance of the case

6. In its first question, the Bundesfmanzhof requests the Court of Justice to rule whether the expression ‘maize groats’ used in Article 1 (d) of Regulation No 19/62 and mentioned under tariff heading ex 11.02 A III (b) in the annex to that regulation must be interpreted as including a product which is the result of rough grinding of hulled maize grain from which the germ has been removed and the grains of which are coarser than those of maize meal of merchantable quality and which in other words ought rather to be described as groats. The Bundesfinanzhof asks in addition whether account must be taken for this purpose of the fat content and in particular whether a fat content of 0.9 % to 1.5 % must be considered necessary and sufficient.

7. Neither Regulation No 19/62 nor Regulation No 55/62 which was issued in implementation thereof define maize groats' within the meaning of tariff heading ex 11.02 and Article 5 (1) (b) of the latter regulation. In the absence of provisions of Community law, the Explanatory Notes and the Classification Opinions laid down by the Convention on the Nomenclature for the Classification of Goods in the Customs Tariffs are authoritative as a valid means of the interpretation of headings in the Common Customs Tariff. It follows from those notes on the headings in Chapter 11 of the Tariff that floury fragments which are less coarse and irregular than kibbled grain but the granules of which are coarser than those of meal and which are derived from the milling of hulled maize grains which have been degermed must be considered as maize groats' within the meaning of tariff heading ex 11.02, in view also of the practice in the milling of maize and in the maize trade. Moreover this conclusion is confirmed by the definition subsequendy given to these products in Article 2 of Article No 1011/70 of the Commission of 29 May 1970.

8. As regards the fat content, it follows from Regulation No 55/62 that it is not decisive in the present case. In any case, since the production of ‘groats’ presupposes that the maize grain has previously been processed, its fat content in relation to the dry material is necessarily very low.

9. For those reasons, the answer to the first question must be that the expression ‘maize groats’ used in Article 1 (d) of Regulation No 19/62 and mentioned under heading ex 11.02 A III (b) in the annex to that regulation must be interpreted as including floury fragments which are less coarse and irregular than kibbled grain but the granules of which are coarser than those of meal and which are derived from the milling of hulled maize grain which has been degermed.

10. Since the answer to the first question is in the affirmative, the other questions which have been referred by the national court now have no purpose.

Costs

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

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the observations of the Günther Henck undertaking 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 Articles 39, 40 and 177; Having regard to Regulation No 19 of the Council of 4 April 1962 on the progressive establishment of a common organization of the market in cereals; Having regard to Regulation No 55 of the Council of 30 June 1962; Having regard to Regulation No 1011/70 of the Commission of 29 May 1970 on certain quality requirements for maize groats and meal used by the Community brewing industry; 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 COURT, in answer to the question referred to it by the Bundesfinanzhof (Seventh Chamber) of the Federal Republic of Germany in accordance with the order of that court on 12 January 1971, hereby rules :