JUDGMENT OF 10. 11. 1983 — CASE 300/82 GESAMTHOCHSCHULE ESSEN v HAUPTZOLLAMT DÜSSELDORF

In Case 300/82 REFERENCE to the Court pursuant to Article 177 of the EEC Treaty by the Finanzgericht [Finance Court] Düsseldorf, for a preliminary ruling in the action pending before that court between

THE COURT (Second Chamber) composed of: K. Bahlmann, President of Chamber, P. Pescatore and O. Due, Judges, Advocate General: P. VerLoren van Themaat 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 pursuant to 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

A — Legal context

The issue in the main action relates to the grant of a customs exemption in respect of a certain plastic material imported into the Community and alleged to be a scientific instrument or apparatus. The legal basis for the importation of such apparatus or instruments free of duty is Regulation No 1798/75.

The regulation is intended to ensure the implementation by the Community of the Florence Agreement drawn up under the auspices of the United Nations Educational, Scientific and Cultural Organization (Unesco). Under the first article of the Agreement, which entered into force in 1952,

“(1) The Contracting States undertake not to apply customs duties or other charges on, or in connection with, the importation of: ... (b) educational ... materials, listed in Annexes ... D...”.

Annex D to the Agreement covers, subject to certain reservations, “scientific instruments or apparatus, intended exclusively for educational purposes or pure scientific research”.

Consequently, in order to facilitate the free movement of ideas and to promote scientific research within the Community, the Council adopted Regulation No 1798/75, which provides for the possibility of importing into the Community certain educational, scientific and cultural materials free of duty under the Common Customs Tariff. Whilst Article 1 of Regulation No 1798/75 provides that some of those materials are to be admitted free of Common Customs Tariff duties whatever their intended use, and whilst Article 2 thereof provides that other materials must be intended either for certain public establishments and organizations or for certain establishments or organizations which may be otherwise approved, according to Article 3 (1) thereof, as amended by Article 1 of Regulation (EEC) No 1027/79, a third category of scientific instruments and apparatus not covered by Articles 1 and 2 may benefit from customs exemption provided that they are imported exclusively for educational purposes or for pure scientific research. That provision lays down that the instruments and apparatus in question are those which:

“(a) ... are intended for either public establishments principally engaged in education or scientific research, including those departments of public establishments which are principally engaged in education or scientific research; or private scientific or educational establishments authorized by the competent authorities of the Member States to receive such articles duty-free”

provided that:

“(b) instruments or apparatus of equivalent scientific value are not being manufactured in the Community.”

In order to obtain the duty-free admission under Article 3 (1) of Regulation No 1798/75, the recipient establishment or organization must therefore demonstrate that the scientific instrument or apparatus in question is intended exclusively for the purposes of education or pure scientific research.

Under Article 4 (1) of Regulation (EEC) No 3195/75 of the Commission of 2 December 1975 laying down provisions for the implementation of Council Regulation (EEC) No 1798/75 (Official Journal 1975, L 316, p. 17), the competent national authority is to give a direct decision on applications for exemption in all cases where the information at its disposal enables it to assess whether the imports covered by Regulation No 1798/75 have the characteristics of scientific instruments or apparatus. If the competent national authority is unable to decide, the application is forwarded to the Commission which, after examination by a group of experts, is to take a decision establishing whether or not the conditions governing exemption of the apparatus are satisfied.

B — Facts and national procedure

The plaintiff in the main action, the Gesamthochschule [Polytechnic/University] Essen (hereinafter referred to as “the plaintiff”) imported into the Federal Republic of Germany on 8 May 1978, at Düsseldorf Airport, three cartons of goods, described as “goods made of plastic, for technical purposes: plastic blocks” and known as “phantom material A-150”, originating in the United States of America. When requesting that the goods be released for free circulation, it asked the Customs Office to grant them an exemption from customs duty. The Customs Office refused the request and charged provisional entry taxes amounting to DM 4130.83 (DM 2323.91 by way of customs duty and DM 1806.92 by way of import turnover tax). The plaintiff laid an objection to the levy of customs duty before the Hauptzollamt [Principal Customs Office] Düsseldorf, which is the defendant in the main action (hereinafter referred to as “the defendant”) and, after the objection had been dismissed, brought an action against the defendant before the Finanzgericht [Finance Court] Düsseldorf.

In the context of those proceedings, the plaintiff argued that the imported material must be regarded as a “scientific instrument or apparatus” within the meaning of Regulation No 1798/75, since it constituted a research instrument. It served to simulate human muscle tissue and enabled the effect of radiation on the human organism to be measured. The material had been adopted as an internationally approved reference substance for the neutron dosimeters used in biology and medicine and it was only by using the material that it was possible to assess and compare, at the international level, the results obtained from research. It therefore constituted not the object but the instrument of research.

The defendant disputed before the national court that the material in question had the characteristics of a scientific instrument or apparatus within the meaning of Article 3 of Regulation No 1798/75, because it was nothing other than the very object on which the measurements were carried out. It therefore constituted, not the instrument used for research but the object of that research, and consequently failed to fulfil the conditions prescribed for obtaining the exemption sought, especially as the particular concept mentioned in Article 3 of the regulation must be interpreted in a narrow, technical sense which differed from the sense to be given to the general concept mentioned in Article 1.

By order of 1 December 1982, the Finanzgericht Düsseldorf stayed the proceedings and decided to refer the following preliminary question to the Court:

“In Regulation (EEC) No 1798/75 of 10 July 1975, is the term ‘scientific instrument’ to be interpreted broadly so as to include scientific aids and working materials such as phantom material A-150, a substance made up of plastic blocks and intended for radiological research?”

The order making the reference was lodged at the Court Registry on 3 December 1982.

In the grounds of its order the Finanzgericht suggested that the Court of Justice should give an affirmative answer to the question raised. It points out that the concept “scientific instrument or apparatus” is not defined in Regulation No 1798/75 and also that its meaning is ambiguous in current usage. None the less, the Finanzgericht takes the view that a broad interpretation of the concept is warranted, in the light both of the regulation's wording and of its objective as expressed in the recitals in the preamble, namely to “facilitate the free exchange of ideas as well as ... scientific research within the Community”, which demands common and uniform standards for both reference criteria and research methods. The material is manufactured specially for research purposes and has no other intrinsic functions, with the result that it constitutes not an object but a subject of research. The Finanzgericht also refers to the case-law of the Bundesfinanzhof [Federal Finance Court], which decided in favour of a broad interpretation of the concept “instrument”, so that the descriptions of goods must be understood in their comprehensive and general sense, and not in a limited sense; consequently, the concept “instrument” must be understood in its general sense, as a “means” employed in order to attain a given goal. Thus the Bundesfinanzhof acknowledged that superrefined strontium titanate in monocrystalline form, enabling optical and electrical measurements to be carried out for research and teaching purposes, fell into the category of scientific instruments within the meaning of Article 3 of Regulation No 1798/75.

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, represented by Mr Wolff, the Director of Administration of the University Hospital (Universitätsklinikum) of Essen, and by the Commission, represented by J. Grunwald, 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 without any preparatory inquiry.

By order of 18 May 1983, the Court assigned the case to the Second Chamber.

II — Written observations

The plaintiff invites the Court to answer the preliminary question in the affirmative. Concerning the origins of the dispute, it explains in detail the characteristics of the material in question and its use in the University Hospital of Essen. The substance is one which is specially designed for the quantity measurement of neutron rays used for therapeutic purposes, and it serves to simulate human muscle tissue so that the effect of the neutron rays on the human organism (“total energy dose DT”) may be measured. The material is universally and uniformly accepted as a reference substance, it is used in all commercially available neutron-ionization chambers and it has been adopted for use in all neutron therapy centres in Europe and America with the result that no other material may be substituted for it. Thus it is manufactured solely for research purposes in relation to neutron dosimetry and cannot be put to any other use. In Essen it is being used by the medical radio-physics department to simulate and measure the distribution of neutron dosages in the human organism when new techniques of radiotherapy which rely on an isocentric cyclotron (the latter being, incidentally, the only apparatus of this kind in the Federal Republic of Germany) are applied.

Turning to the preliminary question, the plaintiff points first to the wording of the recitals in the preamble to Regulation No 1798/75, which proposes the application to “scientific ... materials” of an exemption from Common Customs Tariff duties. As regards more particularly scientific instruments or apparatus, the grant of the exemption must be subject to the condition that instruments of equivalent scientific value are not available within the Community.

The plaintiff begins by asking whether the concept “scientific instruments and apparatus” is completely identical in content with the general concept “scientific materials”, or whether the former should not be understood in a more limited sense, as covering merely a part of such materials. The first alternative would mean that the concept “scientific instrument or apparatus” was necessarily very wide, whilst the second alternative would mean that, in the case of scientific instruments or apparatus alone, the exemption must be subject to their not being available within the Community.

The plaintiff then points out that under Article 3 (4) of Regulation No 1798/75 even normal equipment enjoys an exemption provided that it has certain characteristics not found in equipment manufactured in the Community. The plaintiff concludes that it is all the more appropriate to grant the exemption to scientific materials in the same circumstances.

Finally, the plaintiff refers to the current use of the term “instrument”, which has been endowed with a very wide meaning by the relevant dictionaries (for example, “Meyers Enzyklopädisches Lexikon”), inasmuch as “instrument” is defined as “equipment, aid, implement or apparatus enabling scientific work to be carried out”. It therefore raises the question why the Council failed to define the meaning of the concepts in question used in the regulation if in fact they were intended to be understood as having a special meaning, different from that attributed to them in current usage. Thus the plaintiff casts doubt on the logic of giving to the concepts in question in the regulation a very narrow interpretation, the result of which is that normal equipment having certain characteristics may benefit from the exemption whereas “scientific materials” not belonging to the category of “scientific instruments and apparatus” in the more restricted sense may not do so.

The plaintiff therefore concludes that the Court may find either that the concepts “scientific materials” and “scientific instruments and apparatus” are, as regards their content, wholly identical and wide-ranging or else that the concept “scientific instruments and apparatus” must be interpreted more narrowly than “scientific materials”, so that all “scientific materials” may benefit from the exemption — even when they fall outside the category of “instruments” — by virtue of the recitals in the preamble to Regulation No 1798/75. However, the Court may also decide that the exemption must be granted, not only to normal equipment displaying “certain characteristics” not possessed by equipment manufactured in the Community, but, in addition, to “scientific materials” which also display those characteristics. According to the plaintiff, all those possibilities of interpretation demonstrate that the material concerned benefits from the customs exemption, either as a “scientific material” or else as scientific “equipment”.

The material may, moreover, be considered as a necessary accessory to a main instrument. Being part of a measuring process, it clearly constitutes a product with which, and not on which, research is conducted. Inasmuch as it may be considered a necessary accessory of a main instrument exempted from customs duty, it, too, is exempted from duty.

On the other hand, the Commission takes the view that the relevant provisions of Regulation No 1798/75 cannot be interpreted so widely as to enable a material such as that involved in this case to benefit from exemption from customs duty. The Commission refers to the fact that the “educational, scientific and cultural” materials mentioned in the earlier articles are defined in annexes in which the various items or categories of items are listed together with an indication of the Common Customs Tariff headings and with a description of the articles, whereas in the case of items included under Article 3, which relates to scientific instruments and apparatus not mentioned in Article 2 imported exclusively for educational purposes or for pure scientific research and satisfying the conditions laid down in subparagraphs (a) and (b) thereof, that system of listing does not apply. Article 3 (4) excludes from duty-free admission “normal equipment ... unless it has certain characteristics not found in equipment manufactured in the Community”.

The Commission denies that the material in question may be regarded as a “scientific instrument or apparatus” within the meaning of Article 3 (1), or as an item of “normal equipment” within the meaning of Article 3 (4) of the regulation. It takes the view that no lexical or systematic definition or delimitation of the concepts at issue can serve as a basis for resolving the question.

Those concepts, on the contrary, relate essentially to technical equipment which, by reason of its structure and mode of operation, is suited for use in scientific research, that is to say, objects which are made up from certain materials by means of a technical process and which, by virtue of their function, in some way constitute “instruments” of research. Neither chemical elements nor chemical compounds such as the material in question meet those criteria. Although such substances do have special chemical and physical properties, it cannot be claimed that the various raw materials are the result of technical construction, or that the presence of such properties may be regarded as the performance of a function. At the very least, a homogeneous chemical in its crude state in the form of blocks may not be regarded as an instrument or apparatus within the meaning of Article 3 (1) of Regulation No 1798/75.

Similarly, the Commission is of the opinion that Article 3 (4) of the regulation is not applicable in this case since it covers normal equipment, which necessarily presupposes the existence of objects to be equipped, namely the instruments and apparatus referred to in Article 3 (1) of the regulation. That interpretation is borne out by Annex D to the Nairobi Protocol to the Florence Agreement, which lists, apart from the scientific instruments and apparatus themselves, only certain spare parts, components and accessories, together with implements to be used for certain purposes.

The Commission also excludes the possibility of applying Article 3 (1) and (4) of Regulation No 1798/75, by analogy, to homogeneous chemical substances or compounds of the type at issue, on the grounds that exemption from Common Customs Tariff duty represents an exception in terms of the Community's system of customs legislation and that, as a matter of principle, provisions laying down exceptions may not be applied by analogy. Thus the Commission has already decided, on the basis of a unanimous opinion from the Committee on Duty-Free Arrangements set up by Article 7 of the regulation, that even semi-finished products do not fall within the ambit of that regulation.

The Commission observes that the negative reply to the preliminary question which it proposes does not mean that it is unaware of the scientific value of certain chemicals for research. It was, incidentally, for that reason that as early as 1979 it submitted to the Council a proposal for a regulation dealing with the extension — subject to certain conditions — of the duty-free import system to biological and chemical substances.

For the reasons given above, the Commission proposes that the following answer be given to the preliminary question:

“Regulation (EEC) No 1798/75 of the Council of 10 July 1975 is not applicable to phantom material A-150, made up of plastic blocks and intended for radiological research.”

III — Oral procedure

At the sitting on 30 June 1983, oral argument was presented and questions asked by the Court were answered by Professor Jürgen Rassow, head of the Medical Radio-Physics Department of Essen University Hospital, for the plaintiff in the main action, and J. Grunwald, a member of the Commission's Legal Department, assisted by Dr Martin Oberhofer, Wissenschaftlicher Referent [scientific adviser], Euratom Joint Research Centre at Ispra, and Mr Naezer, as experts, for the Commission of the European Communities.

The Commission observed that Council Regulation No 918/83 of 28 March 1983 setting up a Community system of reliefs from customs duty (Official Journal 1983, L 105, p. 1) contains a special provision for the admission of biological or chemical substances free from import duties under certain conditions, provided that they are included in a list drawn up in accordance with the procedure laid down in Article 143 (2) and (3) of the regulation. That is a new provision which is not required by the Florence Agreement.

The Advocate General delivered his opinion at the sitting on 22 September 1983.

Decision

1. By order of 20 October 1982 which was received at the Court on 3 December 1982, the Finanzgericht [Finance Court] Düsseldorf referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of Article 3 of Regulation (EEC) No 1798/75 of the Council of 10 July 1975 on the importation free of Common Customs Tariff duties of educational, scientific and cultural materials (Official Journal 1975, L 184, p. 1), adopted in order to implement the Florence Agreement (United Nations Treaty Series Volume 131, 1952, No 1734, pp. 26 et seq.).

2. The question arose in the course of an action brought before the national court by the Gesamthochschule [Polytechnic/University] Essen for the annulment of the decision of the Hauptzollamt [Principal Customs Office] Düsseldorf refusing exemption from customs duties on the importation of plastic blocks known as “phantom material A-150”, originating in the United States of America and intended by the Gesamthochschule to simulate human muscle tissue to enable the effect of radiation on the human organism to be measured, on the ground that the material was not a scientific instrument or apparatus within the meaning of Regulation No 1798/75.

3. The plaintiff in the main action claimed before the national court that the material in question ought to be regarded as a “scientific instrument or apparatus” within the meaning of the abovementioned regulation, since it constituted not the object but the instrument of research, being used for the neutron dosimeters employed in biology and medicine, and also because it was only by using the material that it was possible to assess and compare, at the international level, the results obtained from research.

4. On the rejection of that argument by the Hauptzollamt, the Finanzgericht Düsseldorf referred to the Court for a preliminary ruling the following question:

“In Regulation (EEC) No 1798/75 of the Council of 10 July 1975, is the term ‘scientific instrument’ to be interpreted broadly so as to include scientific aids and working materials such as phantom material A-150, a substance made up of plastic blocks and intended for radiological research?”

5. It appears from the papers before the Court that the material in question has a special composition resulting from discoveries of scientific research and is manufactured by only one undertaking which is situated outside the Community. On being exposed to radiation it produces, owing to its composition, reactions similar to those of human tissue. For that reason it is used in scientific research projects undertaken in the interests of human health as a means of measuring the effect of neutron rays on human tissue.

6. The use of the material in question also serves to facilitate the assessment and comparison, at the international level, of the results of scientific research projects in the field of neutron dosimetry.

7. Consequently, the question referred to the Court asks whether the term “scientific instrument” in Article 3 of Regulation No 1798/75 must be interpreted as including a material such as the one known as phantom material A-150, made up of plastic blocks and intended for radiological research, inasmuch as that material fulfils an essential function as an indispensable means of obtaining certain results from long-term scientific research.

8. It should be noted that neither the Florence Agreement nor Regulation No 1798/75 contains a definition of the term “scientific instrument” for the purposes of Article 3 (1) of the said regulation. A definition must therefore be sought in the purpose of that provision, considered in the light of all the provisions of, and the preamble to, Regulation No 1798/75.

9. Since, according to the first recital in the preamble to that regulation, it is necessary to allow “by all possible means” the admission free of customs duties of educational, scientific and cultural materials, the term “scientific instrument” in Article 3 (1) of Regulation No 1798/75 cannot be given a narrow interpretation.

10. That conclusion is confirmed by the preamble to the Florence Agreement, which is based on the idea “that the free exchange of ideas and knowledge and, in general, the widest possible dissemination of the diverse forms of self-expression used by civilizations are vitally important both for intellectual progress and international understanding” and “that this interchange is accomplished primarily by means of books, publications and educational, scientific and cultural materials”.

11. In that context it is impossible to find support for a narrow interpretation in the fact that Article 2 of Regulation No 1798/75 refers generally to scientific “materials” listed in Annex II, whereas Article 3 (1) relates to “scientific instruments and apparatus” not included in Article 2.

12. Article 3 in fact contains two additional criteria which permit a sufficiently precise definition to be given of a scientific instrument which may be admitted free of customs duty, namely that it should be intended exclusively for scientific research or education and that it is not being manufactured in the Community. In view of those two conditions for the grant of exemption, it is inappropriate to interpret the concept in question in a manner contrary to the purpose of Regulation No 1798/75 as set out above:

13. Moreover, it should be noted that Article 3 of Regulation No 1798/75 was amended by Regulation No 1027/79 (Official Journal 1979, L 134, p. 1) and that Article 3 (3) as amended gives a general definition of the term “scientific instrument or apparatus”, following in part the example set by the Court in its judgment of 2 February 1978 in Case 72/77, Universiteitskliniek Utrechty Inspecteur der Invoerrechten en Accijnzen, [1978] ECR 189.

14. Artide 3 (3) as amended is not applicable in this case, since the facts upon which the dispute in the main action are based occurred before the amendment of Regulation No 1798/75; even so it cannot justify such a narrow interpretation.

15. Nor does the abovementioned judgment of the Court prevent the term “scientific instrument” from being interpreted widely enough to include materials manufactured on the basis of scientific discoveries and used not as an object but as a means of scientific research. That is in any event true in the case of materials such as those in this case which cannot easily be replaced and which are therefore used for long-term scientific research.

16. These findings are sufficient to give a reply to the national court, without its being necessary to provide here an exhaustive definition of a scientific instrument.

17. Finally, in relation to the Commission's opinion that chemical substances cannot fall within the definition of a scientific instrument, it should be noted that this case is not concerned with any chemical substance but with a material used as a tool in a particular scientific context. For the same reason it is also unnecessary to consider the Commission's argument that chemical substances are covered for the first time in the most recent version of Regulation No 1798/75, namely in Article 60 of Council Regulation No 918/83 of 28 March 1983 (Official Journal 1983, L 105, p. 1).

18. The answer to the question submitted to the Court by the Finanzgericht Düsseldorf should therefore be that the term “scientific instrument” in Article 3 of Regulation No 1798/75 must be interpreted as including a material such as the one known as-phantom material A-150, made up of plastic blocks and intended for radiological research, inasmuch as the material fulfils an essential function as an indispensable means of obtaining certain results from long-term scientific research.

Costs

19. 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 proceedings before the national court, costs are a matter for that court.

On those grounds, THE COURT (Second Chamber) in answer to the question submitted to it by the Finanzgericht Düsseldorf by order of 20 October 1982 hereby rules: