JUDGMENT OF 10. 12. 1975 — CASE 53/75 BELGIUM v VANDERTAELEN
In Case 53/75 Reference to the Court under Article 177 of the EEC Treaty by the Cour de cassation of Belgium for a preliminary ruling in the action pending before that court between
THE COURT composed of: R. Lecourt, President, A. M. Donner, J. Mertens de Wilmars, P. Pescatore, M. Sørensen, Lord Mackenzie Stuart and A. O'Keeffe, Judges, Advocate-General: G. Reischl Registrar: A. Van Houtte
gives the following
JUDGMENT
Facts
The facts of the case, the procedure and the observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows:
I — Facts and procedure
Between 6 December 1968 and 5 March 1969, a product, originating from a third country, was declared on importation to one of the customs offices in Antwerp under the description ‘chocolate-flavoured consumable ice’ in Dutch ‘cacaohoudend consumptie-ijs’ under cover of an import licence issued in respect of ice-cream containing cocoa under tariff subheading 18.06 B II b of the Common Customs Tariff.
The importers were prosecuted for importing under this description and it was held that an import licence valid for subheading 21.07 F VII b, 1, should have been produced, since the goods in question not only cannot be regarded as ice-cream but according to the analyses made by the national laboratory of the Administration of Customs and Excise, they contained no cocoa. According to that analysis the product was composed of approximately 14 % water, 66 % fats and 20 % sucrose together with colouring matter; that mixture at a temperature of 20o C and after 24 hours showed no sign of melting.
It appears from the findings of the court trying the matter — which found the defendants guilty — that the goods were processed and sold as butter oil to foreign purchasers.
The Cour d'Appel of Brussels, Antwerp Division, although accepting the correctness of the findings laboratory, considered that the infringements of the customs legislation have not been established for the following reasons: at the time of the events in question, there was no legal definition of the term ‘ice-cream’ and it is proper to decide whether it is obvious to one and all that the product clearly in no way deserves the description ‘ice-cream’ so that the defendants in their declaration intentionally put it under a more favourable heading. According to the judgment, neither the fat content nor the melting point is a conclusive factor in this respect and it has not been shown that the product either in its original form or aerated could not be consumed as a frozen food product having a high fat content, which might pass for ‘ice-cream’.
The Cour de cassation considers that the legality of the judgment of the Cour d'Appel depends on an interpretation of Community law, since the concept of ‘ice-cream’ appearing under subheadings 18.06 B and 21.07 C of the Common Customs Tariff, is not defined by that tariff.
By a judgment of 20 May 1975, filed in the Court Registry on 12 June 1975, the Belgian Cour de cassation stayed the proceedings and made a reference to the Court of Justice of the European Communities in accordance with Article 177 of the EEC Treaty in respect of the following questions:
1) Whether Regulation No 495/69 of 18 March 1969 of the Commission of the European Economic Community is applicable to the classification of goods imported before it came into force, in particular as regards the classification of goods imported during the period from 6 December 1968 up to and including 5 March 1969;
2) What is the definition of the term ‘ice-cream’ for the purpose of applying headings 18.06 B and 21.07 C of the Common Customs Tariff prior to the entry into force of the Regulation No 495/69, in particular during the period from 6 December 1968 up to and including 5 March 1969 and more particularly whether 0 this term can refer to products with a relatively high content in fats, of which milkfats amount to 45 % or more but less than 65 % by weight of the total weight of these products, which contain in particular sucrose and water, which do not melt in an ambient temperature of approximately 0o C and which even in an ambient temperature of 20o C show after 24 hours no sign of melting, even if aerated and offered chilled or frozen.
In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted by Mr Vandertaelen, represented by Armand d'Hondt, advocate at Brussels, by Mr Maes, by the Government of the Kingdom of Belgium, represented by the Minister for Finance and by the Commission of the European Communities, represented by its Legal Advisers, J. Bourgeois and A. Abate, acting as Agents.
The Court, after hearing the report of the Judge-Rapporteur and the views of the Advocate-General decided to open the oral procedure without any preparatory inquiry.
II — Written observations submitted to the Court
On the first question, Mr Vandertaelen refers to Article 3 of Regulation No 495/69 of 18 March 1969, fixing its entry into force on the third day following that of its publication.
In the present case the regulation cannot even be held applicable because of the fact that it regulates the future and permanent effects of a previous situation, the legal situation arising from the disputed imports no longer having any consequences after 5 March 1969.
The question referred for a preliminary ruling is intended therefore to inquire whether the regulation in question could be declared applicable retroactively.
Generally speaking, the retroactivity of laws in European law as in the law of the Member States is very much the exception. As regards, especially, Regulation No 495/69, retroactivity is even formally excluded (Article 3) and cannot be justified by any other wording in this regulation. Lastly, the nature of this regulation is opposed to retroactive application, since in customs law legal certainty assumes very special importance. On this point, Mr Van-dertaelen relies on the judgment of the Court of Justice of 24 November 1971 in Case 30/71, Siemers v Hauptzoll-amt Bad Reichenhall [1971] ECR.
As to the second question, the principle of legal certainty requires reference to be made only to the state of the law in force at the time the regulation, of which an interpretation is requested, was applied. At the time of the contested importation, the concept of ‘ice-cream’ could not be defined because of the absence of an objective criterion. In fact, a proposal for a directive concerning the approximation of the laws concerning ice-cream and similar edible products, published more than six months after the last importation, shows clearly that the current concept of ice-cream and similar edible products varies noticeably from one Member State to another, without a maximum content by weight of fat being decisive in the present case. It is possible only to refer to the attributes and to the methods of manufacture of the product to be classified and it is the national court, the only one competent in the present case, which must consider solely whether the content by weight of fat is or is not such as to cause the product to lose its edible nature.
In the present case that question was decided by the Cour de cassation in its judgment of 13 June 1973 which shows that it is not impossible that the product, in its given form and disregarding its fat content, could be described as ‘icecream’.
It must be mentioned lastly that despite Regulation No 495/69, the customs administration continues to authorize the export of a product absolutely identical with the product in question under the description ‘ice-cream’ and under heading 18.06 B II b of the Common Customs Tariff. It is not permissible to give to the concept of ‘ice-cream’ a different description according to whether it is a matter of an export or an import.
Mr Maes agrees entirely with the observations of Mr Vandertaelen.
The Government of the Kingdom of Belgium considers that given its composition, the disputed product could never have been regarded as ‘ice-cream’ within the meaning of tariff headings 18.06 B II b and 21.07 C of the Common Customs Tariff even at the time of the import.
The Commission mentions first of all that Regulation (EEC) No 495/69 of the Commission, based on Regulation (EEC) No 97/69 of the Council of 16 January 1969, on measures to be taken for the uniform application of the nomenclature of the Common Customs Tariff (OJ L 14 of 21. 1. 1969, p. 1 (English Special Edition, 1969 (I), p. 12) was intended to define products coming under subheadings 18.06 D II c, and 21.07 F VII and not to define ice-cream.
The definition of the latter products, however, may be deduced from the third recital to the said regulation, according to which:
‘…subheadings Nos 18.06 B and 21.07 C worded “edible ice-cream” cover only ices edible in the unaltered state; whereas ices as commonly sold in the trade do not always contain milkfats; whereas when they do contain milkfats the fat content does not usually exceed 15 % by weight; whereas their basic characteristic is that they melt when the ambient temperature is about 0o C.’
As to the scope of the regulation in question, the Commission claims that these provisions are legislative in nature. By virtue of its legal form, the regulation binds the legal and administrative bodies of the Member States as from its entry into force as the authentic interpretation of the Common Customs Tariff and consequently governs the classification of imported goods as from 22 March 1969.
But, leaving out of account the date of its entry into force, the Commission considers that the said regulation should be accepted as a valid means of interpreting the Common Customs Tariff for the period prior to its adoption.
In the present case, however, the regulations in force during the period under consideration already allow of a reply to the question of interpretation in an exhaustive manner.
As to the second question, the Commission refers to Regulation No 83/67/EEC of the Council, of 18 April 1967 (OJ No 81 of 26. 4. 1967, p. 1597). In fact this regulation introduced the concept of ‘ice-cream’ into Community law for the first time and includes a sufficient number of factors to allow the correct classification of products coming within this class of goods.
For the putting into effect of the system of trade for certain processed agricultural products, introduced by Regulation No 160/66/EEC of the Council of 27 October 1966 (OJ No 195 of 28 October 1966, p. 3361) it appeared necessary to create specific subheadings for ice-cream, that is to say subheadings No 18.06 B I and No 21.07 C (Annex I to Regulation No 83/67). In order especially to calculate the ‘variable components’, the quantities of basic agricultural products regarded as being used in the manufactureof ice-cream, that is to say sugar and milk powder, were established on a fixed basis (Annex II to Regulation No 83/67).
Regulation No 950/68 of the Council on the Common Customs Tariff did not alter anything in the nomenclature introduced on that subject by Regulation No 83/67. The amendments made concerned only the numbering of various categories of ice-cream.
In the present case it is necessary to accept the analysis of Regulation No 83/67, since it was a matter of the amount of the variable component. In fact the amount of the customs duty is identical for the two subheadings under consideration (here: 18.06 B II b and 18.06 D II c), whilst the amount of the variable component differs considerably from one subheading to the other. This reasoning applies in the same way to Chapters 18 and 21 of the Common Customs Tariff.
The most delicate problem concerns the determination of the percentage of milk fat contained in the ice-cream: Annex I to Regulation No 83/67 fixed only the minimum limit of this substance (‘… equal to or greater than 7 %’). Subheading 18.06 B II b, referring to ices containing the highest percentage of fat does not mention a higher limit to this percentage.
Annex II to the same regulation, however, shows that 35 kg of whole milk powder go into the manufacture of 100 kg of ice-cream coming under subheading 18.06 B II b. According to scientific concepts, a quantity of 35 kg of whole milk powder per 100 kg corresponds to 9·1 % of milkfat. It is therefore that content which is regarded by the legislature as normal for ice-cream. Even taking account of an extremely wide safety margin (by doubling the percentage), it can be stated that, within the meaning of the Common Customs Tariff, the percentage of the said fat contained in ice-creams, does not exceed the level of ± 18 % by weight.
Annex II to Regulation No 83/67 specifies further, also on a fixed basis, the quantity of sugar contained in these ice-creams. These products, according to the wording of the Common Customs Tariff, are thus distinguished by the presence of the two ingredients mentioned, each of them being considered within the limits of the quantities specified. It is therefore possible to accept, that beyond these limits, the classification of a product as ice-cream is not possible.
In order to distinguish these latter products from other food preparations having the same composition, it is possible to have recourse to the normal meaning of the concept of ‘edible ice-cream’. From this point of view the expression ‘edible’ applies clearly to products ready to be eaten as ice-cream, without having to be subjected to processing or the addition of other substances.
Ice-creams submitted in solid form or as paste have the property of melting at a temperature of approximately 0o C which is explained by the large quantity, which is certainly the greater part, of water which they contain. By increasing the weight content of fat — for example up to 65 % — the product can never return to the liquid state at a temperature of approximately 0o C, the percentage of water being too low.
The factors set out already enable the second question referred for a preliminary ruling to be answered, but, to complete the examination the Commission next mentions rules laid down after the period of import of the disputed product, as a possible further means of interpretation.
In that respect, the Commission relies on the third recital to Regulation No 495/69 of the Commission, mentioned above, and the Explanatory Notes to Chapters 18 and 21 of the Common Customs Tariff adopted on 20 March 1970 by the Committee on Nomenclature, and lastly a proposal for a directive, submitted to the Council on 10 December 1970, on the approximation of the laws of the Member States concerning ice-cream (OJ C 125 of 13. 10. 1970, p. 8).
The Commission is of the opinion that, in application of the general rules for the interpretation of the nomenclature of the Common Customs Tariff Nos 1 and 5, the products concerned in the present case do not conform to the criteria of classification under subheadings 18.06 B and 21.07 C of the Common Customs Tariff but, on the contrary to the criteria relating to subheadings 18.06 D and 21.07 F VII.
This conclusion is in conformity with the objective of the rules on the system of trade for certain processed agricultural products. In fact, the fixed quantities specified serve as a basis for the calculation of the variable component affecting agricultural products actually used in the manufacture of an industrial product and thus replace the agricultural levy.
The Commission suggests that the preliminary questions be answered in the following manner:
1) Regulation No 495/69 of the Commission of 18 March 1969 as an obligatory judicial measure is of a legislative nature and cannot have retroactive effect.
2) By the expression ‘ice-cream for consumption’, within the meaning of subheadings 18.06 B and 20.07 C of the Common Customs Tariff is meant food preparations of which the solid form or paste was obtained by freezing and which are intended for consumption in that state; they are characterized by the property of returning to a liquid or semi-liquid state when they are put in a temperature of approximately 0o C, and by a milkfat content not exceeding 15 % by weight and in certain cases 20 %.
III — Oral Procedure
The Government of the Kingdom of Belgium, represented by the Ministry for Finance and assisted in the present case by Mr Henri Bocken, advocate of the Ministry for Finance and the Commission of the European Communities, represented by its Legal Advisers, J. Bourgeois and A. Abate, acting as Agents, presented oral argument at the hearing on 11 November 1975.
The Advocate-General delivered his opinion at the hearing on 2 December 1975.
Law
1. By a judgment of 20 May 1975, received at the Court Registry on 12 June following, the Belgian Cour de cassation, pursuant to Article 177 of the EEC Treaty, referred two questions relating to the interpretation of certain provisions concerning the classification of goods within the Common Customs Tariff.
2. The first question asks whether Regulation No 495/69 of 18 March 1969 of the Commission of the European Economic Community is applicable for the classification of goods imported before it came into force, in particular as regards the classification of goods imported during the period from 6 December 1968 up to and including 5 March 1969.
3. The second question asks what is the definition of the term ‘ice-cream’ for the purpose of applying headings 18.06 B and 21.07 C of the Common Customs Tariff prior to the entry into force of the Regulation No 495/69, in particular during the period from 6 December 1968 up to and including 5 March 1969 and more particularly whether this term can refer to products with a relatively high content in fats, of which milkfats amount to 45 % or more but less than 65 % by weight of the total weight of these products, which contain in particular sucrose and water, which do not melt in an ambient temperature of approximately 0o C and which even in an ambient temperature of 20o C show after 24 hours no sign of melting, even if aerated and offered chilled or frozen.
4. It appears from the last part of this second question that the possible applicability of Regulation No 495/69 arises only if the concept of ‘ice-cream’ appearing in the Common Customs Tariff does not include the products specified by this question and only if the classification of these products could not be made in accordance with the provisions in force at the time of the import.
5. It is appropriate therefore to consider first the wording of the subheadings in question.
6. Subheading 18.06 B concerns: Ice-cream: I. not containing or containing less than 3 % by weight of milkfat II. with a milkfat content by weight: (a) equal to or greater than 3 % and less than 7 %; (b) equal to or greater than 7 %.
7. Subheading 24.07 C, referring to ice-cream not containing cocoa, is drafted in identical language.
8. The fact that the concept of ice-cream is not defined by the Common Customs Tariff, leads to the supposition that this product is regarded as sufficiently characterized by its very description.
9. The decisive criterion for the customs classification of goods must generally be looked for in their objective characteristics and properties.
10. It cannot be disregarded that ice-cream has the dominant characteristic of melting at a temperature of approximately 0o C, a characteristic which is explained by the high water content in this product and which is, consequently, eliminated in case of a high fat content.
11. Consequently subheadings 18.06 B and 21.07 C show only relatively low fat percentages for ice-cream whilst products with a high fat content are mentioned under the later subheadings of these Chapters.
12. The mere fact that these latter products are produced in a refrigerated or frozen state cannot categorize them as ‘ice-cream’ and justify their classification under subheadings 18.06 B and 21.07 C.
13. Although the Common Customs Tariff gives no details concerning the composition of ice-cream, useful facts in this respect may, however, be found in Regulation No 83/67/EEC of the Council of 18 April 1967 establishing tariff specifications relating to goods covered by Regulation No 160/66/EEC of the Council and prescribing the fixed components applicable to them as well as the quantities of basic products to be taken as having been incorporated in their manufacture (OJ No 81 of 26. 4. 1967, p. 1597).
14. For this purpose the regulation, in Annex II, shows 20 kg of sugar and 35 kg of milk powder per 100 kg of ice-cream for the highest milkfat content mentioned in Annex I (… equal to or greater than 7 %).
15. The nomenclature introduced by this regulation was adopted by Regulation No 950/68 of the Council on the Common Customs Tariff and consequently allows the said basic products to be accepted as possible ingredients of ice-cream within the meaning of the Common Customs Tariff only within the limits of the quantities mentioned.
16. Thus, as the Commission has shown, according to well-established scientific concepts a quantity of 35 kg of whole milk powder per 100 kg of ice-cream corresponds to 9·1 % of milkfat.
17. Even if this last quantity was specified on a fixed basis, that decision by the Community legislature excludes unequivocally only products containing more than 15 % of milkfat from being regarded as ice-cream within the meaning of the Common Customs Tariff.
18. It follows that for the purposes of the application of subheadings 18.06 B and 21.07 C of the Common Customs Tariff the concept of ‘ice-cream’ refers to products having as their essential characteristic that they melt at a temperature of approximately 0o C and that this concept cannot be applied to products with a milkfat content exceeding 15 %.
19. Having regard to that conclusion, the first question has lost its purpose and does not require an answer.
Costs
20. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court are not recoverable.
21. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the Belgian Cour de cassation, the decision on costs is a matter for that court.
On those grounds, THE COURT, in answer to the questions referred to it by the Belgian Cour de cassation by judgment of 20 May 1975, hereby rules: