JUDGMENT OF 19. 5. 1983 — CASE 192/82 KAFFEE-CONTOR BREMEN v HAUPTZOLLAMT BREMEN-NORD

In Case 192/82 REFERENCE to the Court pursuant to Article 177 of the EEC Treaty by the Finanzgericht [Finance Court] Bremen, for a preliminary ruling in the action pending before that court between

THE COURT (Second Chamber) composed of: P. Pescatore, President of Chamber, O. Due and K. Bahlmann, Judges, Advocate General: G. Reischl Registrar: H.A. Rühi, Principal Administrator

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of 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 national procedure

The plaintiff in the main action, Kaffee-Contor Bremen GmbH & Co. KG, of Bremen, imported into the Federal Republic of Germany in 1980 20000 jewellery boxes of Thai origin, declaring the goods to be covered by tariff heading 39.07 B V (d) of the Common Customs Tariff:

“Articles of materials of the kinds described in heading Nos. 39.01 to 39.06 [inter alia, polystyrene] ... B. Other: ... V. Of other materials : ... (d) Other.”

The applicant completed its customs declaration for the Hauptzollamt Bremen-Nord (hereinafter referred to as “the Customs Office”) under the impression that the jewellery boxes could be imported duty-free by virtue of a preference.

The Customs Office applied to the regional Zollehranstalt [Customs Training College] for an expert report, according to which the box in question was a receptacle measuring 9.4 cm by 7.6 cm by 3.4 cm, normally used as a display case for objects on sale or as a container for keeping items of jewellery. The box, fitted with a hinged lid, was made of polystyrene and wholly covered on the outside with coated paperboard. The lid was lined with textile fabric and the floor of the box was covered with a velvet cushion. As to the question of tariff classification, the Zollehranstalt stated that boxes for jewellery and similar containers of leather, composition leather, vulcanized fibre, artificial plastic sheeting, paperboard or textile fabric fell within tariff heading 42.02. Goods of other materials also fell under that tariff heading if they were wholly, or chiefly, covered on the outside with one of the aforementioned materials. Consequently, boxes of artificial plastic material wholly covered with paperboard were to be classified under subheading 42.02 B:

“... boxes (for example, for ... jewellery ...) and similar containers, ... of artificial plastic sheeting, of paperboard ... A. Of artificial plastic sheeting ... B. Of other materials ...”

Accordingly the Customs Office gave the goods that classification and demanded payment of DM 2549.90 as the customs duty.

The plaintiff lodged a complaint against the assessment, arguing that the boxes did not fall under heading 42.02 but under heading 39.07, as articles of artificial plastic material. In the plaintiff's view the boxes were wholly covered, not with paperboard, but only with varnished paper. Under the tariff provisions only a product heavier than 225 grams per square metre could be described as paperboard, according to the Statistical Note to Chapter 48 or the Nomenclature of Goods for External Trade Statistics of the Community and Statistics of Trade between Member States (hereinafter referred to as “Nimexe”).

Nevertheless, the Customs Office did not change its opinion.

The plaintiff therefore brought an action before the Finanzgericht Bremen challenging the decision, and put forward again the argument that the boxes in question fell under heading 39.07 of the Common Customs Tariff.

The Customs Office contended that the action should be dismissed. It assessed the weight of the covering material of the box to be approximately 185 grams per square metre but nevertheless contended that the tariff classification under subheading 42.02 B need not be affected thereby. According to the Customs Office the terms “paperboard” and “paper” are not defined in either the Common Customs Tariff or the Explanatory Notes to the Common Customs Tariff. In trade usage they are distinguished by weight per unit area (the borderline being 225 grams per square metre). In other countries the borderline is as low as 170 grams per square metre. The Statistical Note to Chapter 48 of the Common Customs Tariff [that is to say, Nimexe] may not be relied upon in deciding the tariff classification; it is to be used solely for statistical purposes. The weight per unit area required for paperboard is immaterial, because even a paper-covered box, of which only the inner invisible rigid framework is composed of plastic material, falls within tariff heading 42.02. According to the Explanatory Notes, goods of other materials not listed under that heading are still classified thereunder if they are wholly or mainly covered on the outside with paperboard. Even though paper is not referred to in that heading, boxes covered with paper have nevertheless not been assigned to a different tariff heading or another Chapter of the Common Customs Tariff. Consequently, the Customs Office is of the opinion that the boxes fall within the group of articles covered by tariff heading 42.02. The covering of varnished paper gives them their distinctive appearance while the plastic is merely the rigid support to which the outer material is affixed. Admittedly, the Explanatory Notes to tariff heading 39.07 of the Common Customs Tariff refer to boxes and cases; but there is no indication whatsoever in the heading that boxes so covered remain classifiable in that heading. According to the Customs Office it must therefore be concluded that that tariff heading embraces only boxes the outer surface of which consists of plastic material. Boxes covered with another material, by contrast, do not fall under that tariff heading. It considers it to be significant that cases or boxes of artificial plastic sheeting are included in heading 42.02. Furthermore, in view of the great number of covering materials which may be used it is not possible to list them all in tariff heading 42.02 or in the Explanatory Notes. Even though certain textile fabrics are not mentioned, articles covered therewith may only be classified under heading 42.02. That is why the plaintiff cannot deduce from the omission from the heading of a reference to paper as a covering material that covered boxes of artificial plastic should come within tariff heading 39.07 of the Common Customs Tariff.

The Finanzgericht stayed the proceedings and referred the following question to the Court for a preliminary ruling:

“Are jewellery boxes with hinged lids, of polystyrene and wholly covered on the outside with varnished paper, to be classified as boxes for jewellery and similar containers under tariff heading 42.02 B of the Common Customs Tariff, or as boxes of artificial resins or plastic materials under tariff subheading 39.07 B V (d) of the Common Customs Tariff?”

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC written observations were submitted by the plaintiff in the main action, Kaffee-Contor Bremen GmbH & Co. KG, represented by M. Vette, Leiter Frachtdisposition und Zollwesen [manager of freight arrangements and customs], and by the Commission, represented by its Legal Adviser, R. Wägenbaur, assisted by T. van Rijn, a member of its Legal Department.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure and invited the Commission to answer the questions set out below under heading IV.

By an order dated 15 December 1982 the Court assigned the case to the Second Chamber.

II — Relevant provisions

The General Rules for the Interpretation of the Nomenclature of the Common Customs Tariff provide as follows :

“... 3. When for any reason 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. (b) Mixtures, composite goods consisting of different materials or made, up of different components, and goods put up in sets, which cannot be classified by reference to 3 (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. ...”

The provisions which enter into consideration are worded as follows :

a) “39.02 Polymerization and copolymerization products (for example ... polystyrene ...) ... C. Other: ... VI. Polystyrene ...”

b) “39.07 Articles of materials of the kinds described in headings Nos. 39.01 to 39.06: ... B. Other: ... V. Of other materials: ... (d) Other” The Explanatory Notes of the Customs Cooperation Council state with regard to this subheading, inter alia:

“Other articles. The heading also covers a wide variety of other articles, finished or unfinished, ...

These include:

...

(9). Carboys, bottles and flagons (including infants' feeding bottles) boxes, pots, jars, cases, sachets and similar articles ...

This heading excludes:

...

b) Travel goods ... boxes ... and similar containers of heading 42.02, of artificial plastic sheeting.”

c) “42.02 Travel goods (for example, trunks, suitcases, hatboxes, travelling-bags, rucksacks), shopping-bags, handbags, satchels, briefcases, wallets, purses, toilet-cases, tool-cases, tobacco-pouches, sheaths, cases, boxes (for example, for arms, musical instruments, binoculars, jewellery, bottles, collars, footwear, brushes) and similar containers, of leather or of composition leather, of vulcanized fibre, of artificial plastic sheeting, of paperboard or of textile fabric: A. Of artificial plastic sheeting... B. Of other materials ...” The Explanatory Notes of the Customs Cooperation Council with regard to this subheading, inter alia:

“The present heading covers only the articles specifically named therein and similar containers.

These containers may be rigid or made up with a rigid foundation, or soft and without foundation.

...

Goods of these kinds fall within the heading if made of leather, composition leather, vulcanized fibre, artificial plastic sheeting, paperboard or of textile fabric (including felt and non-woven fabrics), including articles on a foundation of wood, metal, etc., covered or mainly covered with such materials.”

d) “48.16 Boxes, bags and other packing containers, of paper or paperboard; box files, letter trays and similar articles, of paper or paperboard, of a kind commonly used in offices, shops and the like: A. Boxes, bags and other packing containers ... ...” The Explanatory Notes of the Customs Cooperation Council state with regard to this subheading, inter alia:

“(A) Boxes, bags and other packing containers This group covers containers of various kinds and sizes generally used for the packing, transport, storage or sale of merchandise, whether or not also having a decorative value. This heading includes ... These articles may be printed, for example, with the name of the merchant, directions for use of illustrations ... The articles falling within this heading may also have reinforcements or accessories of materials other than paper (for example, textile backings, wooden supports, string handles, metal or plastic corners). ... The heading does not include:

a) Goods of the kind falling within heading 42.02 (travel goods, etc.).”

e) Nimexe, as amended by Commission Regulation (EEC) No 3062/79 of 20 December 1979 (Official Journal, L 346, p. 1), contains the following Statistical Note in relation to Chapter 48;

“Products weighing 225 g/m2 or more are to be treated as ‘board’ or ‘paperboard’; those weighing less than 225 g/m2 are to be treated as ‘paper’.”

Ill — Written observations

The plaintiff emphasizes that tariff subheading 42.02 applies only to boxes covered by materials referred to in its title, because such materials, by providing the covering, determine the character of the product. There is no mention of paper covering since such a light and simple covering cannot determine the character of an object of artificial plastic. It cannot be maintained that since “paper” is not mentioned as a covering material in the title articles covered in paper also fall within heading 42.02 merely by virtue of the fact that “paperboard” is referred to in the title of the heading, and because there is nothing to indicate that articles covered by paper come under a different heading. Therefore the jewellery boxes should be classified under heading 39.07 as articles of artificial plastic material.

The Commission notes, first, that the action pending before the Finanzgericht concerns the tariff classification of a jewellery box. As such boxes are expressly referred to in heading 42.02, it should be considered whether the article in question comes within that heading.

The second condition mentioned under heading 42.02 for an article to be classified thereunder relates to the nature of the material of which the article is made. There is no reason to suppose that the list of materials in heading 42.02 is other than exhaustive. The wording of the heading does not allow a wider interpretation encompassing in addition other types of material not mentioned. That conclusion is supported by the following words of the Explanatory Notes to the Nomenclature of the Common Customs Tariff relating to heading 42.02:

“Goods of these kinds fall within the heading if made of leather, composition leather, vulcanized fibre, artificial plastic sheeting, paperboard or of textile fabric (including felt and non-woven fabrics), including articles on a foundation of wood, metal, etc., covered or mainly covered with such materials.”

It is therefore necessary to see whether the material of the jewellery box appears in the list given in heading 42.02. As the box is of polystyrene and completely covered on the outside by varnished paper it must be decided first whether varnished paper may be equated with paperboard.

Neither the Common Customs Tariff nor the Explanatory Notes contain any criterion for making a distinction between paper and paperboard. The two types of material are, moreover, classified in the same heading and subheading. Nevertheless, a criterion for making such a distinction has been established for statistical purposes. For that reason the Statistical Note cited above relating to the distinction between paper and paperboard was inserted in Chapter 48 of Nimexe, which is based on the Common Customs Tariff.

The note adopts the criterion which is most frequently adopted in the technical literature. In the absence of criteria of interpretation in the tariff itself it is appropriate to refer to the rules of interpretation which are to be found in other areas of Community law. Nimexe is particularly suited for that purpose because it is closely related to the Common Customs Tariff. Accordingly, although the criterion adopted by some countries is less than 225 grams per square metre, that is the figure which should be used to distinguish paper from paperboard in the light of the Statistical Note in Nimexe and the predominant opinion expressed in the technical literature.

The Commission concludes that as the varnished paper in question has a weight of 185 grams per square metre, according to the latest calculations of the Customs Office, it cannot be considered to be “paperboard” within the meaning of tariff heading 42.02.

As varnished paper is not included in the materials listed in heading 42.02, the jewellery box may be classified under this heading only if polystyrene, which is an artificial plastic material, gives the article its essential character. The Commission is of the opinion that that is not so.

The varnished paper with which the outside of the box is covered has the effect of making the article a jewellery box rather than a normal box. The purpose of the polystyrene is simply to support the varnished paper and to make it more rigid. Such rigidity is, however, not essential. A box made solely of polystyrene would not normally be considered to be a jewellery box, in which appearance is important. In the present case the appearance is determined by the varnished paper and that gives the article its essential character.

Furthermore, the articles listed in tariff heading 42.02 must be made, inter alia, of artificial plastic sheeting. It seems probable that the box in question is not made of polystyrene sheeting but is manufactured in one piece.

The Commission concludes that the jewellery box in question cannot be classified under heading 42.02.

Heading 39.07 B V (d) must likewise be excluded because the polystyrene does not give the article, which is made of different materials, its essential character.

As neither of the two tariff headings mentioned in the question referred by the Finanzgericht applies, it is necessary to look elsewhere in the customs tariff for the relevant tariff heading. Since the varnished paper gives the box its essential character it is to Chapter 48, relating to paper and paperboard, that one must look first.

In the opinion of the Commission a jewellery box, the essential character of which derives from the varnished paper with which it is covered, ought to be classified under heading 48.16.

For the reasons given above the Commission suggests the following reply to the question which has been submitted by the Finanzgericht:

“Jewellery boxes, with hinged lids, made of polystyrene and wholly covered on the outside with varnished paper are to be classified under subheading 48.16 A of the Common Customs Tariff:”

IV — Questions put by the Court

The Court asked the plaintiff to state, in writing and before 25 January 1983, whether the box in question was made of polystyrene sheeting or of a single piece of polystyrene.

It put the following question to the Commission:

“Is the Commission able to furnish the Court with information, in writing and before 25 January 1983, regarding the views of the authorities of the various Member States, other than the Federal Republic of Germany, on the tariff classification of the article in question or similar articles?”

Finally, the Court asked the plaintiff and the Commission to explain at the hearing the reasons, technical, economic or other, which might justify a difference of treatment between the articles listed in subheading 42.02 of the Common Customs Tariff according to whether they are covered with paperboard or paper, when, as a general rule, they are mentioned together in the same headings and subheadings of the Common Customs Tariff.

V — Replies given by the parties to the questions put by the Court

By letter of 20 January 1983 úit plaintiff informed the Court that the boxes in question were not made of polystyrene sheeting and that the upper and lower sections of the boxes were each made from a single piece of polystyrene.

By letter of 21 January 1983 the Commission informed the Court that the authorities of the various Member States, other than the Federal Republic or Germany, had stated that the article in question should be classified for tariff purposes as follows:

Emphasizing that the matter had not been discussed in the Nomenclature Committee, the Commission stated that it was not able to make a sample of the jewellery boxes in question available to the “authorities of the various Member States.”

VI — Oral procedure

At the sitting on 3 February 1983 the Commission, represented by R. Wägenbaur, acting as Agent, presented oral argument and replied to the questions put by the Court.

The Advocate General delivered his opinion at the sitting on 24 March 1983.

Decision

1. By order of 24 June 1982, which was received at the Court on 30 July 1982, the Finanzgericht [Finance Court] Bremen referred to the Court for a preliminary ruling pursuant to Article 177 of the EEC Treaty a question relating to the interpretation of various tariff headings of the Common Customs Tariff.

2. The question arose in the course of proceedings between the appropriate customs authority (the Hauptzollamt [Principal Customs Office] Bremen-Nord) and a German company which, in 1980, had imported into the Federal Republic of Germany 20000 jewellery boxes, declaring the goods to, be articles of polystyrene falling within tariff subheading 39.07 B V (d).

3. The Hauptzollamt applied to the Zollehranstalt [Customs Training College] for an expert opinion, according to which the box in question was a receptacle measuring 9.4 cm by 7.6 cm by 3.4 cm, normally used as a display case for objects on sale or as a container for keeping items of jewellery. The box, fitted with a hinged lid, was made of polystyrene and wholly covered on the outside with coated paperboard.

4. On the basis of the expert opinion the Hauptzollamt classified the goods under subheading 42.02 B, which consists of: In making that classification the Hauptzollamt applied one of the Explanatory Notes of the Customs Cooperation Council which states that articles of other materials still fall within that heading if they are covered on the outside by one of the materials referred to in that heading.

“Travel goods (for example, trunks, suitcases, hatboxes, travelling-bags, rucksacks), shopping-bags, handbags, satchels, briefcases, wallets, purses, toilet-cases, tool-cases, tobacco-pouches, sheaths, cases, boxes (for example, for arms, musical instruments, binoculars, jewellery, bottles, collars, footwear, brushes) and similar containers, of leather or of composition leather, of vulcanized fibre, of artificial plastic sheeting, of paperboard or of textile fabric:

A) Of artificial plastic sheeting ...

B) Of other materials ...”

5. The importer brought an action against that decision before the Finanzgericht, claiming that the goods should be classified under subheading 39.07 B V (d).

6. The Finanzgericht stayed the proceedings and referred the following question to the Court for a preliminary ruling:

“Are jewellery boxes with hinged lids, of polystyrene and wholly covered on the outside with varnished paper, to be classified as boxes for jewellery and similar containers under tariff heading 42.02 B of the Common Customs Tariff, or as boxes of artificial resins or plastic materials under tariff subheading 39.07 B V (d) of the Common Customs Tariff?”

7. According to Rule 3 (a) and (b) of the General Rules for the Interpretation of the Nomenclature of the Common Customs Tariff, when the goods are prima facie classifiable under two or more- headings, the heading providing the most specific description must take precedence and goods consisting of different materials must be classified by reference to the material which gives them their essential character.

8. The importer emphasized that the boxes consisted of two pieces of polystyrene and were covered with paper, which was a light and simplematerial incapable of depriving the boxes of their character of objects of artificial plastic.

9. In the observations it submitted to the Court the Commission stated, on the contrary, that it agreed with the Hauptzollamt that it was the varnished paper covering the boxes which determined their essential character. However, it drew attention to the fact that only paperboard, and not paper, appears in the list of materials in heading 42.02 B. Since the Common Customs Tariff contains no criterion for distinguishing between those two materials, the Commission referred to a Statistical Note to Chapter 48 of the Nomenclature of Goods for External Trade Statistics of the Community and Statistics of Trade between Member States, which fixes the borderline between paper and paperboard at a weight of 225 grams per square metre. According to the information provided by the manufacturer the weight of the covering material of the boxes in question does not exceed 185 grams per square metre and the Commission concluded from that that the boxes must be classified under heading 48.16 (“Boxes, bags and other packing containers, of paper or paperboard; box files, letter trays and similar articles, of paper or paperboard, of a kind commonly used in offices, shops and the like”)

10. In order to determine the correct heading it is necessary to note first that it is the covering, and not the mounting, which gives the boxes the luxury appearance which is necessary to make them suitable for the display of jewellery. Thus, by virtue of Rule 3 (b) of the General Rules referred to above, it is possible to exclude heading 39.07 relating to articles of artificial plastic materials.

11. Of the other two headings, tariff heading 42.02 certainly contains the more specific description since it refers expressly to jewellery boxes. The question submitted by the national court therefore comes down to the question whether an article covered with paper may be regarded as a box “of paperboard” within the meaning of that tariff heading.

12. The reply must be in the affirmative. In fact the wording of that tariff heading and the Explanatory Note of the Customs Cooperation Council thereon indicate that the decisive criteria for making a classification are not only the materials used, but both the external appearance of the articles in question and the use to which they are normally put. Consequently an article made of plastic and covered with paper in such a way that the covering gives it the appearance of a jewellery box must be regarded as a jewellery box within the meaning of tariff heading 42.02, even if paper is not expressly mentioned in that heading.

13. That interpretation is supported, moreover, by the fact that paper and paperboard are, as a general rule, included without distinction in the same headings and subheadings of the Common Customs Tariff and that neither the Common Customs Tariff nor the Explanatory Notes of the Customs Cooperation Council gives any criterion for distinguishing between paper and paperboard, which are made of the same raw materials and which may be differentiated only on the basis of their weight. That indicates that the two products were intended to be treated alike from the point of view of tariff classification unless otherwise provided. No such contrary provision is to be found in heading 42.02. That paperboard alone, and not paper, appears in the list of materials given in the heading is attributable to the fact that the various articles listed therein cannot normally be made from that material alone. However, paper is more suitable for use as a covering material than paperboard. In the circumstances the fact that paper is not referred to in heading 42.02 may not be regarded as evidence of an intention that articles covered in paper and articles made from paperboard should not be treated in the same manner.

14. For those reasons a jewellery box made of plastic material but covered with paper must be equated with a similar box made of paperboard for the purposes of tariff subheading 42.02 B.

15. The reply to the question referred to the Court must therefore be that jewellery boxes with hinged lids, of polystyrene and wholly covered on the outside with varnished paper, must be classified as boxes for jewellery under tariff subheading 42.02 B of the Common Customs Tariff.

Costs

16. 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, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds, THE COURT (Second Chamber), in answer to the question referred to it by the Finanzgericht Bremen by order of 24 June 1982, hereby rules: