JUDGMENT OF 15. 2. 1977 —JOINED CASES 69 AND 70/76 DITTMEYER v HAUPTZOLLAMT HAMBURG-WALTERSHOF

In Joined Cases 69 and 70/76 Reference to the Court under Article 177 of the EEC Treaty by the Bundesfinanzhof for a preliminary ruling in the actions pending before that court between:

THE COURT composed of: H. Kutscher, President, A. M. Donner and P. Pescatore, Presidents of Chambers, M. Sørensen, Lord Mackenzie Stuart, A. O'Keeffe and G. Bosco, Judges, Advocate-General: J.-P. Warner 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

The main actions relate to the tariff classification of a product which Dittmeyer declared as residue from the pressing of oranges (and grapefruit) and which it put on the domestic market in 1970. This is a tinned or frozen product obtained in the course of manufacturing fruit juice and consists of pieces of fruit which fall into the juice during pressing and are subsequently strained off. The product is intended to be used as an additive to diluted fruit juices in order to give them a more natural and richer appearance.

The customs authorities first of all classified the product, in accordance with the declaration, under heading 23.06 of the Common Customs Tariff of the EEC: ‘Vegetable products of a kind used for animal food, not elsewhere specified or included’.

After an examination by a Zoll-technische Prüfungs- und Lehranstalt (Customs Technical Testing and Research Institute) had shown that it was a pulp produced from oranges, the customs authorities amended the tariff classification bringing the product in question, in accordance with the method whereby it was preserved and packed, under one or other of the two headings of the Common Customs Tariff provided for fruit:

In the proceedings which it initiated against the amendment notice the plaintiff in the main action claimed that it was impossible to consider the products in dispute as fruit within the meaning of the abovementioned tariff headings since they did not contain any of the essential elements of natural fruit. Thus the product contained no elements of the outer peel, and the juice of the fruit, which is of decisive importance for human consumption, was almost completely extracted.

Since the Finanzgericht (Finance Court) dismissed the application of the plaintiff, the main actions are presently pending before the Bundesfinanzhof (Federal Finance Court). In its appeal on a point of law the plaintiff is seeking to have the relevant product classified under tariff heading 23.06. It stated before the Bundesfinanzhof that the product is composed of residues and waste from the food-manufacturing industry, and maintains that it comes under heading 23.06 A.

This classification must be adopted if the manufacturing process and the composition of the product are considered. The residue is produced as a result of the manufacture of fruit juice, that is to say, in pressing the fruit which has been cut up or extracting the juice from it by suction. Basically the residue consists of the cell tissue of the pulp and also to a lesser degree of the pith (albedo). These are residues which have initially fallen into the juice during pressing and which must be strained off. In most cases the portion to be strained off is pressed again in an extractor in order to extract what remains of the juice. In order to increase extraction some undertakings mix water into the residue from pressing again before the second pressing. The residue thus extracted or pressed has largely lost its juice and flavour and has mostly been destroyed so that it meets the criterion of ‘waste from the food industry’. Nevertheless the residues are also used in part as animal food as is laid down under heading 23.06. As is the case with the plaintiff, only a very insignificant proportion of the residue from pressing is used to improve the appearance of the juices. This exception cannot affect the basic classification of residue from pressing as waste from the food industry or as prepared animal fodder. This follows from the fact that tariff classification is based solely on the normal use of a product and not on how it is used in a few isolated and atypical cases.

By an order of 1 June 1976 the Seventh Senate of the Bundesfinanzhof decided to stay the proceedings and, in accordance with Article 177 of the EEC Treaty, to submit a request for a preliminary ruling on the following questions:

I) Must tariff heading 20.06 [08.10] of the Common Customs Tariff be interpreted to mean that products consisting of parts of fruit which however are almost entrirely lacking in any of those features which determine the nature of fruit can be considered as coming under the heading ‘fruit’; in particular, is it possible to classify under tariff heading 20.06 [08.10] products consisting of parts of oranges which have initially entered the juice in the course of pressing the oranges and which have subsequently been strained off, even if they contain scarcely any constituent parts of the flesh of the fruit or fruit juice and instead consist principally of cell membrane and albedo?

II) If question I is answered in the negative, must tariff heading 23.06 of the Common Customs Tariff be interpreted to mean that the above-described product can be included under this tariff heading even if in both general and particular cases it is not used for animal food?

III) If questions I and II are answered in the negative, can the product be brought under one of the two said tariff headings through the application of No 5 (now 4) of the General Rules for the Interpretation of the Nomenclature of the Common Customs Tariff?

The orders for reference were entered in the Court Register on 19 July 1976.

By an order of 15 September 1976 the Court decided to join the present cases for the purposes of the written and oral procedure.

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC written observations were lodged by the Commission of the European Communities, represented by its Legal Adviser Peter Kalbe, acting as Agent.

Having heard 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.

The plaintiff in the main action was nevertheless requested to produce at the hearing a sample of the disputed product in the packing in which it was produced to the customs authorities.

II — Summary of the written observations submitted to the Court

The plaintiff in the main action has merely referred to the arguments which it advanced in the procedure before the national courts and which have been summarized above.

With regard to the interpretation of tariff headings 08.10 and 20.06, the Commission states that, apart from tariff headings 08.13 and 20.04, Chapter 8 and Chapter 20 of the Common Customs Tariff do not contain tariff specifications relating to parts of fruit. The nomenclature is indeed founded on the principle that a fruit, with all its parts, must be classified under the tariff heading for the form in which it appears and that the separate parts of this fruit also remain under the tariff heading appropriate to the whole fruit in so far as, viewed separately, they do not display the particular characteristics specified in the description of a product referred to in another tariff heading.

The Commission refers to the Explanatory Notes to the Brussels Nomenclature which, under the heading ‘General’ in Chapter 8, state: ‘Fruit of this Chapter may be whole, sliced, chopped, stoned, pulped, grated, peeled or shelled’ and under the heading ‘General’ in Chapter 20: ‘The fruit, vegetables and other plants or parts of plants classified in the present Chapter may be whole, in pieces or in pulp’. With regard to heading 20.06 the Explanatory Notes state: This heading covers fruit (whether whole, in pieces or crushed) …

According to the Customs Cooperation Council this rule applies not only to the parts which, as segments, still contain all the essential components of the whole fruit, but also to the separate elements of the fruit as such.

The classification opinions of the Customs Co-operation Council adopt a constant practice of classifying fruits and their separate parts including fruit pulps comparable to the products in dispute in this case without distinction under the tariff headings of Chapters 8 and 20.

The practices regarding classification followed by the Commission and the Committee on Common Customs Tariff Nomenclature are fully in accord with one another. In particular the classification slip of 7 May 1971 expressly placed parts of oranges of the type in dispute under tariff headings 08.10 or 20.06 (see Annex III to the observations of the Commission).

With regard to the interpretation of tariff heading 23.06 the Commission observes that most of the products referred to in Chapter 23, residue and waste from the food industry and prepared animal food, have a common and almost exclusive use: they are employed alone or mixed with other materials in the manufacture of animal fodder. (Cf. the Explanatory Notes to the Brussels Nomenclature under the heading ‘General’ in Chapter 23).

In the first paragraph of the Explanatory Notes to heading 23.06 it is stated: ‘Provided that they are not included in any other more specific heading of the Nomenclature and are of a kind used for animal food, this heading covers vegetable products, vegetable waste, and residues and by-products from the industrial processing of vegetable materials in order to extract some of their constituents’.

Amongst the products ‘der als Futter verwendeten Art’ (of a kind used for animal food) must be included goods which, in accordance with the criteria of a logical system, may be considered as ‘zum Füttern geeignet’ (suitable for feeding animals) whether in isolated instances they are in fact used for animal food or are put to a different use (see for example Point (5) of the second paragraph of the Explanatory Notes to heading 23.06).

Nevertheless in this case the product in dispute cannot be classified under tariff heading 23.06 for the following reasons: the object and the basis of all classifications are the type, the nature, the qualities and the characteristics of the imported product at the date on which it is declared on importation. In so far as the wording of the Common Customs Tariff does not prescribe other requirements the previous characteristics and possible subsequent uses of the product are irrelevant.

Accordingly one must consider in terms of the wording of tariff heading 23.06 not the parts of oranges obtained by straining the juice, in their original state or as components of the juice which has been subsequently reconstituted, but only the product into which these parts have been processed for a use clearly specified by the plaintiff and which is all that the plaintiff has imported. This product does not constitute animal fodder but a foodstuff which has been manufactured under specific hygienic conditions and in accordance with legislation in force with regard to foodstuffs with the sole aim of meeting certain requirements for foodstuffs and which has its own importance and value in economic terms. Moreover it has been frozen or pasteurized and tinned and thus prepared and preserved at a certain cost in order to be able subsequently to be put to a specific use in the beverage industry.

The Commission reaches the following conclusions as to the classification of the products in dispute in the present case:

The concept of ‘fruit’ referred to in tariff headings 08.10 and 20.06 covers whole fruit as well as pieces of fruit and thus their various constituents.

When a fruit is broken down into its constituent parts those parts no longer come under the tariff heading for the chapters in question if, as a result of this process, the parts, as independent products, display the characteristics laid down in another specific tariff heading.

Since the parts of oranges in dispute in the present case appear to be a manufactured product, frozen or pasteurized and tinned for the specific purposes of the beverage industry they do not comply with the conditions for classification under tariff heading 23.06.

The parts of oranges in dispute in the present case must be classified under heading 08.10 if they are frozen and under heading 20.06 if they have been pasteurized and tinned even if they contain almost no pulp or fruit juice and instead consist largely of pith and albedo.

This finding follows from the objective interpretation of the wording of the tariff headings and is not based upon No. 4 of the General Rules of Interpretation.

Ill — Oral procedure

The plaintiff in the main action, represented by Mr Irrgang, and the Commission of the European Communities, represented by its Legal Adviser Peter Kalbe, presented oral argument at the hearing on 8 December 1976.

With regard to the composition of the product in dispute, the plaintiff in the main action claimed in particular that the relevant product consisted not in pulp but solely in cell tissue and of albedo, that is to say in a worthless residue. In this connexion it made reference to tariff headings 08.13 and 20.04 which concern peel. A lower customs tariff is applied to those products and it must be inferred from this that a constituent which is not a specific part of the fruit must be accorded different treatment.

This conclusion also applies to the present case: the product in dispute must be accorded different treatment and a lower rate than the specific parts of fruit.

Finally the plaintiff in the main action emphasized that, according to the second paragraph Point (5) of the Explanatory Notes to the Brussels Nomenclature on heading 23.06, waste of fruit (peel and cores of apples, pears, etc.) and fruit pomace or marc from the pressing of fruit constitute products of a kind used for animal food. In this case the relevant substance resembles marc because the specific constituents of the fruit are no longer or scarcely present. Accordingly it must, like marc, be classified under tariff heading 23.06.

The Advocate-General delivered his opinion at the hearing on 19 January 1977.

Law

1. By two orders of 1 June 1976 received at the Court Registry on 19 July 1976 the Bundesfinanzhof submitted to the Court of Justice pursuant to Article 177 two series of three parallel questions relating to the customs classification of a product, in one case pasteurized and in the other frozen, which is ‘obtained in the course of manufacturing fruit juice and consists of pieces of fruit which fall into the juice during pressing and are subsequently strained off’.

2. The first questions ask whether heading 08.10 of the Common Customs Tariff, ‘fruit (whether or not cooked), preserved by freezing, not containing added sugar’ or heading 20.06 of this tariff, ‘fruit otherwise prepared or preserved, whether or not containing added sugar or spirit’ must be interpreted to mean that products consisting of parts of fruit which however are almost entirely lacking in any of those features which determine the nature of fruit can be considered as coming under the heading ‘fruit’; in particular, whether it is possible to classify under heading 20.06 or 08.10 products consisting of parts of oranges which have initially entered the juice in the course of pressing the oranges and which have subsequently been strained off, even if they contain scarcely any constituent parts of the flesh of the fruit or fruit juice and instead consist principally of cell membrane and albedo. If the first questions are answered in the negative, the second questions ask whether heading 23.06 of the Common Customs Tariff must be interpreted to mean that the above-described product can be included under this heading even if in both general and particular cases it is not used for animal food. If the first and second questions are answered in the negative, the third questions ask whether the product can be brought under one of the said headings through the application of No 5 (now No 4) of the General Rules for the Interpretation of the Nomenclature of the Common Customs Tariff.

3. The file indicates that products such as those referred to by the questions form the subject-matter of an opinion of the Committee on Common Customs Tariff Nomenclature established by Regulation (EEC) No 97/69 of the Council of 16 January 1969 on measures to be taken for uniform application of the nomenclature of the Common Customs Tariff (OJ English Special Edition 1969 (I), p. 12). This opinion, called a ‘classification slip’, relates to products described as ‘Products termed “orange cells”, in the form of a thick fruit puree, uncooked, yellowish, with a neutral or very slightly bitter taste similar to that of an orange, not containing added sugar; the products are obtained after filtering orange juice containing flesh of the fruit and include a certain amount of more or less finely crushed peel, mainly from the inner white part. They are intended to be added to diluted concentrates of orange juice and to soft drinks’. The opinion, which states that ‘these products fall under subheading 20.06 B II when pasteurized and under subheading 08.10 B when frozen’, is based upon the fact ‘that the products in question consist in fact solely in parts of the fruit properly so-called, that is the flesh of the fruit, the cell membrane and a certain quantity of the peel, mainly from the inner white part’. According to the opinion, ‘these products cannot be classified under heading 23.06 mainly because, having regard to the method by which they are produced and the way in which they are preserved, they do not constitute a residue within the meaning of that heading’.

4. The opinions of the Committee on Common Customs Tariff Nomenclature constitute an important means of ensuring the uniform application of the Common Customs Tariff by the customs authorities of the Member States and as such they may be considered as a valid aid to the interpretation of the tariff. Nevertheless such opinions do not have legally binding force so that, where appropriate, it is necessary to consider whether their content is in accordance with the actual provisions of the Common Customs Tariff and whether they alter the meaning of such provisions. The questions which have been asked by the national court were evidently prompted by grave doubts as to whether the opinion was in accordance with the said tariff headings.

5. The actual wording of Chapters 8 and 20 of the tariff covers not only whole products but also fruit which is sliced, chopped, stoned, pulped, grated, peeled or shelled. Chapter 8 also refers to the peel of citrus fruit and of melons whilst several subheadings of Chapter 20 refer expressly or by implication to peel. Nevertheless in all those cases the products referred to may still be identified by their characteristics and their form as coming under fruit and they constitute parts of fruit in demand as fresh or prepared fruit. The concept of fruit cannot be extended so as to describe as fruit products lacking the essential constituents of the natural product. Accordingly, products such as those described by the national court which are residues from pressing and consist only in the cell membrane of the flesh of the fruit and part of the white inner skin, that is to say, in parts of the fruit generally accepted as non-essential, cannot be classified as fruit within the meaning of Chapters 8 and 20 since every fruit consists at least in the outer skin and the flesh.

6. This conclusion is confirmed by the fact that the Common Customs Tariff contains a separate chapter, Chapter 23, covering ‘residues and waste from the food industries; prepared animal fodder’. The ‘classification slip’ mentioned above did indeed rule out classification under the headings of this chapter in particular because the products it refers to do not constitute a residue within the meaning of this chapter owing to the way in which they were obtained and preserved, but it is clear from the file that the products referred to by the national court are residues from the manufacture of fruit juice, that is to say, residues obtained in the course of pressing the sliced fruit or extraction of the juice, which initially enter the juice and must be strained off. The fact that those products are not intended for consumption by animals does not prevent classification under Chapter 23 since, according to its title and the wording of the various subheadings, this chapter does not relate only to prepared animal fodder. If the products referred to were classified under the headings contained in Chapters 8 and 20 this might well extend too widely the concepts of ‘edible fruit’ or of ‘preparations of fruit’ whilst, on the other hand, in view of the information supplied by the national court, classification under the headings of Chapter 23, ‘residues and waste’, appears reasonable.

7. Since the third questions were only submitted in case a negative reply was given to the first and second questions they are, in the circumstances, no longer relevant.

8. Consequently the reply to the questions submitted must be that heading 23.06 of the Common Customs Tariff must be interpreted to mean that it may include products consisting of parts of fruit, which however are almost entirely lacking in any of those features which determine the nature of fruit, in particular products consisting of parts of oranges which initially entered the juice in the course of pressing the oranges and which have subsequently been strained off even if they contain scarcely any constituent parts of the flesh of the fruit or fruit juice and instead consist principally of cell membrane and albedo.

Costs

9. The costs incurred by the Commission of the European Communities which submitted observations to the Court are not recoverable. 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 national court, costs are a matter for that court.

On those grounds, THE COURT in answer to the questions submitted to it by the Bundesfinanzhof by orders of 1 June 1976, hereby rules:

1 Translator's Note: In the English versions of the Common Customs Tariff and the Explanatory Notes both these phrases are translated as ‘of a kind used for animal food’.

2 Translator's Note: In the English versions of the Common Customs Tariff and the Explanatory Notes both these phrases are translated as ‘of a kind used for animal food’.