JUDGMENT OF 22. 9. 1976 -CASE 22/76 IMPORT GADGETS v LAMP.

In Case 22/76 Reference to the Court under Article 177 of the EEC Treaty by the Tribunale di Pavia for a preliminary ruling in the action pending before that court between

THE COURT composed of: R. Lecourt, President, H. Kutscher and A. O'Keeffe, Presidents of Chambers, A.M. Donner, J. Mertens de Wilmars, P. Pescatore, M. Sørensen, Lord Mackenzie Stuart and F. Capotorti, Judges, Advocate-General: J.-P. Warner Registrar: A. Van Houtte

Gives the following

JUDGMENT

Facts

The order making the reference and the written 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

In February 1970 and February 1971 respectively, Import Gadgets, whose registered office is in Paris, bought from L.A.M.P., whose registered office is in Pavia, 2000 and 1600‘laughing devices’ for use in the manufacture of talking dolls.

The first consignment, which was accompanied by a certificate of Italian origin issued by the Pavia Chamber of Commerce and declaring that they came under tariff subheading 97.02 B (parts and accessories of dolls), was, on arrival in Paris, declared under the same subheading.

The second consignment, which left Italy under the same conditions as the first, was, however, on arrival in Paris declared under subheading 97.03 B (other toys; working models of a kind used for recreational purposes).

On the latter occasion, the French Customs found that the devices in question bore the inscription, partly deleted, ‘made in Japan’, refused them Community treatment, ordered them to be confiscated and imposed a fine of FF 10000. Subsequently, the Customs declared that the first consignment also was of Japanese origin and, holding that the appropriate tariff heading was heading 97.03 B and not 97.02, imposed a further fine of FF 5000 on Import Gadgets.

Import Gadgets brought an action for dissolution of the contract for sale of 1600 devices before the Tribunale di Pavia, and for damages.

That court took the view that, before the case could be decided, it was necessary to obtain a preliminary ruling on the interpretation of customs heading 97.02 and 97.03 since at the material time the French Republic had taken protective measures within the meaning of Article 115 of the EEC Treaty only in respect of the second heading. It therefore stayed the proceedings and, by order of 22 January 1976, referred to the Court of Justice under Article 177 of the EEC Treaty the question:

‘Do laughing devices constitute mechanisms capable of being used by themselves as toys (97.03) or, on the other hand, do they merely constitute parts of dolls (97.02 B)?’

The order of the Tribunale di Pavia was entered at the Court Registry on 5 March 1976.

Observations were submitted by the defendant in the main action and by the Commission of the European Communities in accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC.

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

II — Summary of the observations

The defendant in the main action points out that it manufactures only dolls parts and accessories which cannot be used for any purpose other than the construction of dolls. As these component parts cannot be submitted as or in the form of separate toys, they must be classified under tariff subheading 97.02 B.

The first point made by the Commission with regard to the facts is that the dispute with the French Customs was, in the case of the second consignment imported, concerned solely with the origin of the imported products but, in the case of the first consignment imported, also with the tariff classification which was unsupported by any statement of reason or assessment.

Note No 4 of Chapter 97 of the Common Customs Tariff (1972 numbering) concerning subheading 97.02 B of heading 97.02 (dolls) which reads

‘… parts and accessories which are suitable for use solely or principally with articles falling within any heading of this Chapter are to be classified with those articles’,

lays emphasis on the ‘normal’ or ‘natural’ use of the parts and accessories, which must not necessarily be the exclusive but may be merely the principal use. The actual use to which the importer or trader puts the product is not a decisive factor.

Under the description ‘Other toys, working models of a kind used for recreational purposes’, heading 97.03 embraces a large number of different toys because it covers items not included under the two headings which precede it: 97.01 (Dolls' prams and dolls' push-chairs) and 97.02 (dolls).

Though submitted as parts or accessories of toys, the devices cannot work on their own and do not constitute toys within the meaning of heading 97.03 but must be classified under subheading 97.02 B. If submitted as finished products, namely as incorporated in a toy, the appropriate heading would be that applicable to the toy: 97.02 A if the toy is a laughing doll, 97.03 B if the toy is a laughing teddy bear and 97.05 if the toy is a ‘novelty’ such as a jack-in-the-box used for practical jokes or amusement (which would mean that the classification problem in the present case is largely one of the relation between headings 97.02 and 97.05).

The reply must therefore be that, when submitted as parts and accessories recognizable as being exclusively or mainly for use for dolls under tariff heading 97.02, the products in dispute are classified under subheading 97.02 B of the Common Customs Tariff.

Although the court making the reference has not in so many words submitted questions involving the intra-Community system of trade in force at the material time, the Commission points out that the liberalization of imports into the Community from third countries in respect of products coming under heading 97.02 came into force on 1 January 1969 and that no derogation has been allowed from the principle of free circulation.

If a Member State to which products in free circulation are in transit were to demand a certificate of origin this would breach the principle prohibiting measures having an effect equivalent to quantitative restrictions.

Only products coming under tariff heading 97.03 have not been liberalized for importation from third countries. Under the commercial agreement of 14 May 1963, which continues in force, France limits the importation of toys from Japan; it is therefore possible to have recourse to protective measures under Article 115 of the EEC Treaty only for toys of Japanese origin coming under heading 97.03. But France received authorization only for the period from 17 July to 31 December 1970 (Decision of 17 July 1970, JO L 171, p. 23) and for the period from 30 September 1971 — 31 March 1972 (Decision of 30 September 1971, JO L 232, p. 40), that is to say, outside the period when the disputed imports occurred. Moreover, contrary to the provisions of Article 30 et seq. of the EEC Treaty, France subjected the imports of the products in question, admitted to free circulation in Italy, to the compulsory advance licence system.

The foregoing considerations should be sufficient to clarify, for the court making the reference, the question whether ‘… there were measures in force in France restricting free circulation’.

The plaintiff in the main action, represented by Mr Camerini, of the Milan Bar, and the Commission of the European Communities, represented by its Legal Adviser, Mr Abate, acting as Agent, submitted oral observations at the hearing on 29 June 1976.

The Advocate-General delivered his opinion on 14 July 1976.

Law

1. By order of 22 January 1976, which reached the Court on 5 March 1976, the Tribunale di Pavia referred under Article 177 of the EEC Treaty for a preliminary ruling on the interpretation of headings 97.02 and 97.03 of the Common Customs Tariff.

2. This question was raised in connexion with a dispute concerning the importation into France by the plaintiff in the main action of ‘laughing devices’ which it had purchased in Italy from the defendant in the main action for use in the manufacture of talking dolls.

3. 2000 of these devices, dispatched in February 1970, accompanied by a certificate of Italian origin declaring that they came under tariff subheading 97.02 B (parts and accessories of dolls), were, on arrival in Paris, declared under the same subheading. 1600 of these devices, dispatched in February 1971 under the same conditions as the previous ones, were on arrival in Paris declared under subheading 97.03 B (other toys; working models of a kind used for recreational purposes).

4. The French Customs found that the devices in question bore the inscription, partly deleted, ‘made in Japan’, refused them Community treatment, ordered them to be confiscated and imposed a fine on the plaintiff in the main action. In consequence, Import Gadgets, the plaintiff in the main action, brought an action for dissolution of the contract of sale before the Tribunale di Pavia and for damages.

5. The question is asked whether the laughing devices constitute mechanisms capable of being used by themselves as toys (97.03) or, on the other hand, whether they merely constitute parts of dolls (97.02 B).

6. Note 3 to Chapter 97 of the Common Customs Tariff (1972 numbering) reads: ‘In heading 97.02 the term “dolls” is to be taken to apply to such articles as are representations of human beings’. Note 4 provides that ‘parts and accessories which are suitable for use solely or principally with articles falling within any heading of this Chapter are to be classified with those articles’.

7. The Explanatory Notes to the Brussels Nomenclature which, in the absence of specific provisions of Community law, are an authoritative and valid aid to the interpretation of the Common Customs Tariff headings, contain the following clarification of heading 97.02:

‘The term “dolls” is to be taken to apply only to such articles as are representations of human beings (including those of a caricature type).

…

Parts and accessories of dolls falling within this heading include: heads, bodies, limbs; wigs; voice and other mechanisms; dolls' clothing, shoes and hats; dolls' eyes whether or not mounted on moving mechanisms, but unmounted dolls' eyes of glass are excluded (heading 70.19)’.

8. On the other hand, the long list of examples of toys falling within heading 97.03 given by the Notes does not include anything resembling laughing devices, nor are the latter included in the list of examples of novelty jokes falling within heading 97.05. This justifies the conclusion that ‘voice and other mechanisms’ are suitable for use, if not solely, at least principally, in dolls which are representations of human beings, notwithstanding that they may be suitable also for other uses.

9. In consequence, the reply to the question submitted by the Tribunale di Pavia must be that laughing devices suitable principally for use in dolls that are representations of human beings come within heading 97.02 B of the Common Customs Tariff.

Costs

10. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, a step in the action pending before the Tribunale di Pavia, costs are a matter for that court.

On those grounds, THE COURT in answer to the question referred to it by the Tribunale di Pavia by order of 22 January 1976 hereby rules: