Report for the Hearing in Case C-377/92

I — Relevant legislation

1. The chapters, headings and subheadings of the Common Customs Tariff (hereinafter ‘the CCT’) and the general considerations and explanatory notes of the Customs Cooperation Council on the Harmonized System (hereinafter ‘the Explanatory Notes’) which concern this case are worded as follows: ‘CHAPTER 8 — EDIBLE FRUIT AND NUTS (...) General This Chapter covers fruit, nuts (...) generally intended for human consumption (whether as presented or after processing). (...) Fruit and nuts of this Chapter may be whole, sliced, chopped, shredded, stoned, pulped, grated, peeled or shelled. (...) This Chapter does not, however, include ...: (...) (ii) Edible fruit ... prepared or preserved otherwise than as described above (Chapter 20). — 0801 — Coconuts ... fresh or dried, whether or not shelled or peeled: — 080110 — Coconuts: — 08011010 — — Desiccated coconut — 08011090 — — Other CHAPTER 11 General This Chapter includes: (1) Products from the milling of cereals ... (2) Products also obtained from the cereals of Chapter 10 by submitting them to the processes provided for in the various headings of the Chapter ... (3) Products obtained by submitting raw materials of other Chapters (... fruit, nuts ...) to processes similar to those indicated in paragraph (1) or (2) above. — 1106 — ... powder of the products of Chapter 8: — 110630 — ... powder of the products of Chapter 8: — 11063090 — ... Other Notes (...) (c) ... powder of the products of Chapter 8. The principal fruits or nuts of Chapter 8 which arc made into ... powders, are ... coconuts ... (...) Products of this heading may be improved by the addition of very small amounts of antioxidants or cmulsifiers. CHAPTER 20 — PREPARATIONS OF ... FRUIT, NUTS ... Chapter notes 1. This chapter does not cover: (a) ... fruit or nuts ... prepared or preserved by the processes specified in Chapters ... 8 or 11. General This Chapter includes: (...) (6) .. fruit, nuts ... prepared or preserved by other processes not provided for in Chapters ... 8 and 11 or elsewhere in the Nomenclature. — 2008 — Fruit, nuts ... otherwise prepared or preserved ... not elsewhere specified or included. — Nuts ... — 200819 — — Other ... — 20081910 — — — In immediate packings of a net content exceeding 1 kg — — — In immediate packings of a net content not exceeding 1 kg Notes This heading covers fruit, nuts ... in pieces or crushed, prepared or preserved otherwise than by any of the processes specified in other Chapters ... CHAPTER 21 — MISCELLANEOUS EDIBLE PREPARATIONS 2106 Food preparations not elsewhere specified or included: — 210690 — — Other: — Other: — 21069091 — — — containing less than ... 5% sucrose — 21069099 — — — Other Notes Provided that they are not covered by any other heading of the Nomenclature, this heading (2106) covers: (...) (B) Preparations consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption. The heading includes preparations consisting of mixtures of chemicals (organic acids, calcium salts, etc.) with foodstuffs (flour, sugar, milk powder, etc.) for incorporation in the food preparations either as ingredients or to improve some of their characteristics (appearance, keeping qualities, etc.).’

II — Facts and procedure

2. By a binding customs tariff ruling the Oberfinanzdirektion München (Principal Revenue Office, Munich) classified the product in dispute (‘coconut powder — Santan Coconut Cream Powder’) under subheading 21069099 of the CCT as a food preparation not elsewhere specified or included (other). The Principal Revenue Office excluded a different tariff classification, in particular under subheading 11063090 — powder of the products of Chapter (other) 8 —, because the product contained no vegetable fibre visible under the microscope. The product at issue is a powder intended for the production of foodstuffs, consisting of a pasteurized, homogenized, and subsequently spray-dried mixture of ground and pressed coconut pulp to which maltose (8%) and sodium caseinate (5%) have been added before drying to obtain a powder and containing also 6.9% by weight of sucrose.

3. The German company Felix Koch Offenbach Couleur und Karamel GmbH, the plaintiff in the main proceedings, claimed that the dried coconut powder, as coconut pulp powder, had to be classified under heading 1106. The fact that it contained only 0.15% recognizable proportion of raw fibre was of no significance.

4. The Principal Revenue Office contended primarily that at the previous stage of manufacture the product has a vegetable fibre content of only 0.15% coconut pulp and the product itself exhibited no vegetable fibre whatever, whereas the edible part of coconuts (the pulp) consisted of some 3.3% raw fibre. Moreover, the manufacture of the product did not correspond to that of a fruit or nut powder.

5. The Bundesfinanzhof (Federal Finance Court), which was called upon to give judgment in the main action, decided to stay proceedings and referred the following question to the Court for a preliminary ruling:

‘Is the Common Customs Tariff (Combined Nomenclature 1990) to be interpreted as meaning that “coconut powder” consisting of a pasteurized, homogenized and subsequently spray-dried mixture of ground and pressed coconut pulp to which maltose and sodium caseinate are added before it is dried in order to obtain the form of a powder, as more particularly described in the grounds of this order, to be classified under subheading 21069099 as a “food preparation not elsewhere specified or included (other)”?’

6. The order for reference was received at the Court Registry on 12 October 1992. 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 plaintiff in the main proceedings, represented by H. Glashoff, Tax Consultant, and by the Commission of the European Communities, represented by B. Rodriguez Galindo and A. Bardenhewer, of its Legal Service, acting as Agents, assisted by Professor H.-J. Rabe, Rechtsanwalt.

7. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to assign the case to the First Chamber in accordance with Article 95 of the Rules of Procedure and to open the oral procedure without any preparatory inquiry.

III — Written observations submitted to the Court

8. The plaintiff in the main proceedings submits that the processing of the coconut pulp during the manufacture of the coconut powder does not go beyond the treatment authorized by the wording of 0801 of the CCT. In other words, the coconut pulp, even with the processing which it has undergone in this case, should still be regarded as a product referred to in Chapter 8 and therefore the product in question should be classified under subheading 11063090, that is to say as products resulting from those referred to in Chapter 8, by manufacturing processes referred to that chapter. The plaintiff adds that the specific reference by the court of reference, concerning pasteurization, to paragraph 2 of column (1) in the Annex to Commission Regulation (EEC) No 316/91 of 7 February 1991 (OJ 1991 L 37, p. 25) is unfounded because: (a) The abovementioned paragraph in Regulation No 316/91 refers to a white pasty substance known as ‘creamed coconut’, that is, a product different from coconut powder; (b) The Commission justifies classification under subheading 20081990, in particular, because classification of the coconut ‘paste’ under Chapter 8 is excluded on account of the pasteurization. However, the plaintiff considers that pasteurization is allowed for products under Chapter 8. (c) There is no need in this case to decide whether the tariff classification of the coconut ‘paste’ referred to in paragraph 2 in the Annex to the aforementioned regulation is correct and the question may therefore be left open. Finally, the plaintiff points out that the addition of sodium caseinate and maltose, prior to drying, also has no bearing on the tariff classification. Those additives are necessary only in order to manufacture a smooth flowing powder; they do not detract from the character of the coconut pulp as ‘fruit’ or ‘nuts’ within the meaning of Chapter 8.

9. The Commission notes first of all that subheading 21069099 is a residual heading and that it should therefore be ascertained whether the product imported by the plaintiff in the main proceedings is covered by heading 0801, 1106 or 2008. First, as regards heading 0801, the Commission considers that fruit or nuts may be shelled, peeled, seeded or stoned, but no other part may be removed (see the Explanatory Notes on Chapter 8). In this case, almost all the solid constituents (fibres) had been removed from the coconut pulp. Moreover, by virtue of its pasteurization and the addition of other substances, the basic product has undergone processing which was not provided for under Chapter 8. Classification under heading 0801 cannot therefore be accepted. Secondly, the Commission considers that the product in question cannot be classified under heading 1106, since that heading is relevant only where two conditions are satisfied simultaneously: the product must, first of all, be extracted from raw materials referred to under Chapter 8 (that is fruit or nuts), and further, it must be obtained by simple grinding (see the Explanatory Notes on Chapter 11). Thirdly, the Commission considers that heading 2008 concerning fruit or nuts otherwise prepared, not elsewhere specified or included, is also excluded because, according to its wording, it assumes that there is preparation of ‘fruit’ or ‘nuts’. That latter conclusion, according to the Commission, docs not prevent a coconutbased product such as that referred to in Regulation No 316/91 from being classified under subheading 20081990, since in that case the whole fruit or nut, apart from the shell, is processed, which enables it to preserve its character as raw material under Chapter 8. Finally, the Commission considers that the product in question must be classified under heading 2106 because it is composed of a mixture of foodstuffs (the basic product, coconut pulp, being a foodstuff) and chemi cal products, which is intended for food preparation (sec the Explanatory Notes on Chapter 21). According to the Commission, since the content by weight of sucrose is over 5%, the product in dispute is to be assigned to subheading 21069099.

G. C. Rodríguez Iglesias

Judge-Rapporteur

1 Language of the case: German.