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IMPORTANT LEGAL NOTICE - The source of this judgment is the web site of the Court of Justice of the European Communities. The information in this database has been provided free of charge and is subject to a Court of Justice of the European Communities disclaimer and a copyright notice. This electronic version is not authentic and is subject to amendment.
JUDGMENT OF THE COURT (First Chamber)
18 December 1997 (1)
(Common Customs Tariff - Tariff headings - Tariff classification of a 'Vista'
board electronic component intended for image processing and capable of being
used as a graphics card in a computer - Classification in the Combined
Nomenclature)
In Case C-382/95,
REFERENCE to the Court under Article 177 of the EC Treaty by the
Bundesfinanzhof for a preliminary ruling in the proceedings pending before that
court between
Techex Computer + Grafik Vertriebs GmbH
and
Hauptzollamt München
on the interpretation of the Combined Nomenclature of the Common Customs
Tariff in Annex I to Council Regulation (EEC) No 2658/87 of 23 July 1987 on the
tariff and statistical nomenclature and on the Common Customs Tariff (OJ 1987
L 256, p. 1), as amended by the annexes to Commission Regulation (EEC)
No 3174/88 of 21 September 1988 (OJ 1988 L 298, p. 1), Commission Regulation
(EEC) No 2886/89 of 2 August 1989 (OJ 1989 L 282, p. 1) and Commission
Regulation (EEC) No 2472/90 of 31 July 1990 (OJ 1990 L 247, p. 1),
THE COURT (First Chamber),
composed of: M. Wathelet, President of the Chamber, D.A.O. Edward
(Rapporteur) and L. Sevón, Judges,
Advocate General: C.O. Lenz,
Registrar: H.A. Rühl, Principal Administrator,
after considering the written observations submitted on behalf of:
- Techex Computer + Grafik Vertriebs GmbH, by Wilhelm Jordan,
Rechtsanwalt, Munich,
- the Commission of the European Communities, by Francisco de Sousa
Fialho, of its Legal Service, acting as Agent, assisted by Hans-Jürgen Rabe
and Georg M. Berrisch, of the Brussels and Hamburg Bars,
having regard to the Report for the Hearing,
after hearing the oral observations of the Commission at the hearings on 29 May
and 16 September 1997,
after hearing the Opinion of the Advocate General at the sitting on 2 October
1997,
gives the following
Judgment
- By order of 7 November 1995, received at the Court on 7 December 1995, the
Bundesfinanzhof (Federal Finance Court) referred to the Court for a preliminary
ruling under Article 177 of the EC Treaty three questions on the interpretation of
the Combined Nomenclature of the Common Customs Tariff (hereinafter 'the
Combined Nomenclature') in Annex I to Council Regulation (EEC) No 2658/87
of 23 July 1987 on the tariff and statistical nomenclature and on the Common
Customs Tariff (OJ 1987 L 256, p. 1), as amended by the annexes to Commission
Regulation (EEC) No 3174/88 of 21 September 1988 (OJ 1988 L 298, p. 1),
Commission Regulation (EEC) No 2886/89 of 2 August 1989 (OJ 1989 L 282, p. 1),
and Commission Regulation (EEC) No 2472/90 of 31 July 1990 (OJ 1990 L 247,
p. 1).
- Those questions have been raised in proceedings between Techex Computer +
Grafik Vertriebs GmbH (hereinafter 'Techex') and the Hauptzollamt (Principal
Customs Office), Munich, concerning the tariff classification of 'Vista' boards.
- According to the order for reference, a Vista board consists of printed circuits
which are intended to be incorporated into automatic data-processing machines and
which have integrated circuits (including, inter alia, graphics processors and
memories) as well as active and passive processing components. The printed
circuits are designed either for the conversion (i.e. data capture), processing and
storage of image data received in particular from external video sources in the form
of standard television signals, or for the production of graphics.
- From 1988 to 1991 Techex imported several Vista boards which were released into
free circulation and declared under heading No 8473 of the Combined
Nomenclature as parts for machines coming under heading No 8471 covering
'Automatic data-processing machines and units thereof; magnetic or optical
readers, machines for transcribing data onto data media in coded form and
machines for processing such data, not elsewhere specified or included.' Customs
duty at the rate of 4% was levied on them.
- By an amendment notice of 7 November 1991 and by a decision of 28 December
1991 following an objection made through administrative channels, the
Hauptzollamt, Munich, upon reviewing the matter, excluded the goods in question
from classification under heading No 8471 of the Combined Nomenclature on the
ground that the processing of image data received from external video sources in
the form of standard television signals constituted a 'specific function' within the
meaning of the last paragraph of Note 5(B) to Chapter 84 of the Combined
Nomenclature.
- That paragraph is worded as follows:
'Heading No 8471 does not cover machines incorporating or working in
conjunction with an automatic data-processing machine and performing a specific
function. Such machines are classified in the headings appropriate to their
respective functions or, failing that, in residual headings.'
- The Hauptzollamt, Munich, consequently classified the goods under heading
No 8543 of the Combined Nomenclature: 'Electrical machines and apparatus,
having individual functions, not specified or included elsewhere in this chapter' and
levied customs duty at the rate of 7% on them. It sought post-clearance recovery
of the difference.
- On 6 October 1994, the Finanzgericht (Finance Court) dismissed the action brought
against those decisions. Techex then appealed on a point of law to the
Bundesfinanzhof (Federal Finance Court), arguing that a Vista board did not have
a 'specific function' since the processing of images was only a category of 'data
processing' in a wider technological sense.
- In those circumstances the Bundesfinanzhof decided to stay proceedings and refer
the following questions to the Court for a preliminary ruling:
'1. Must Note 5(B) to Chapter 84 of the Common Customs Tariff (Combined
Nomenclature 1988 to 1991) be interpreted as meaning that image
processing, which the "Vista" boards more particularly described in the
grounds hereof can perform, is to be regarded as a "specific function"
within the meaning of that provision, that is to say as a function other than
data processing, so that such goods are not classifiable under heading
No 8471?
2. If the answer to Question 1 is in the affirmative:
Must heading No 8543 (in this instance: subheading No 8543 8080 of the
Combined Nomenclature 1991, subheading No 8543 8090 of the Combined
Nomenclature 1988 to 1990) be interpreted as meaning that the term
"(other) electrical machines ... having individual functions, not specified or
included elsewhere in this Chapter" covers products such as "Vista" boards
(1) even if such boards are by their nature capable of being used not only
for image processing but also as graphics cards for automatic data-processing machines?
3. If the answer to Question 2 is in the negative:
Under which other customs tariff heading should products such as "Vista"
boards (1) be classified?'
The first question
- By its first question the national court asks in effect whether image processing, as
it can be carried out with an automatic data-processing machine unit which
includes, inter alia, an analogue/digital converter, a high-quality graphics processor
and a digital/analogue converter, must be regarded as the performance of 'a
specific function', within the meaning of the last paragraph of Note 5(B) to
Chapter 84 of the Combined Nomenclature.
- As the Court has repeatedly held, the decisive criterion for the customs
classification of goods must be sought generally in their objective characteristics and
qualities, as defined in the relevant heading of the Common Customs Tariff and in
the notes to the sections or chapters (see, in particular, the judgment in Case
C-11/93 Siemens Nixdorf [1994] ECR I-1945, paragraph 11).
- Both the notes which head the chapters of the Common Customs Tariff and the
Explanatory Notes to the Nomenclature of the Customs Operations Council are
important means for ensuring the uniform application of the Tariff and as such may
be regarded as useful aids to its interpretation (see Siemens Nixdorf, cited above,
paragraph 12).
- In the present case, it is clear from the wording of heading No 8471 of the
Combined Nomenclature that this heading includes automatic data-processing
machines and units thereof. According to the first paragraph of the first part of the
Explanatory Notes of the Customs Cooperation Council on this heading, 'Data-processing consists in handling information of all kinds, in pre-established logical
sequences and for a specific purpose or purposes.'
- It is clear from the first paragraph of Note 5(B) to Chapter 84 of the Combined
Nomenclature that any unit which may be connected to the central unit of a data-processing system and is able to accept or deliver data in a form (code or signals)
which can be used by the system must be regarded as forming part of the complete
system of an automatic data-processing machine and must be classified under
heading No 8471.
- According to part E(2) of the general considerations concerning Chapter 84 of the
Explanatory Notes of the Customs Cooperation Council, a machine presented with
an automatic data-processing machine and intended to work in conjunction
therewith may be regarded as performing an individual function only if it performs
a function 'other than data processing'.
- In the main proceedings, the national court considers that image processing
constitutes a different function from that of data processing. However, it is clear
from the observations of Techex and the Commission lodged with the Court that
the three components of a Vista board, comprising an analogue/digital converter,
a high-quality graphics processor and a digital/analogue converter, technically do
nothing else than process data.
- For the term 'data-processing' covers the processing of images, which form a data
category.
- The Commission contends, however, that, although it processes information, a Vista
board performs a specific function within the meaning of the last paragraph of
Note 5(B) to Chapter 84 of the Combined Nomenclature because it enables an
automatic data-processing machine to perform a specific technical function, namely
process images, which the national customs authorities must take into account on
importation of the goods.
- The Court observes that such an appraisal is not based on the objective
characteristics and properties of the unit in question but on the functions which the
unit enables an entire automatic data-processing machine to perform.
- Moreover, it is common ground that the function of a Vista board, which is a unit
intended to be incorporated into an automatic data-processing machine, is to
convert external analogue signals to make them available in a form enabling that
machine to process them and to provide an on-screen representation of the result
of the operations carried out by the machine. Vista boards therefore perform no
function 'other than data processing'.
- The reply to the first question must therefore be that image processing, as it can
be carried out with an automatic data-processing machine unit which includes, inter
alia, an analogue/digital converter, a high-quality graphics processor and a
digital/analogue converter, is not to be regarded as the performance of a 'specific
function' for the purposes of the last paragraph of Note 5(B) to Chapter 84 of the
Combined Nomenclature.
The second and third questions
- Since the second and third questions were submitted only in the event of an
affirmative reply to the first question, they are devoid of purpose.
Costs
23. The costs incurred by the Commission of the European Communities, which has
submitted observations to the Court, are not recoverable. Since these proceedings
are, for the parties to the main proceedings, 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 (First Chamber),
in answer to the questions referred to it by the Bundesfinanzhof by order of 7
November 1995, hereby rules:
Image processing, as it can be carried out with an automatic data-processing
machine unit which includes, inter alia, an analogue/digital converter, a high-quality graphics processor and a digital/analogue converter, is not to be regarded
as the performance of a 'specific function' for the purposes of the last paragraph
of Note 5(B) to Chapter 84 of the Combined Nomenclature of the Common
Customs Tariff in Annex I to Council Regulation (EEC) No 2658/87 of 23 July
1987 on the tariff and statistical nomenclature and on the Common Customs
Tariff, as amended by the annexes to Commission Regulation (EEC) No 3174/88
of 21 September 1988, Commission Regulation (EEC) No 2886/89 of 2 August 1989
and Commission Regulation (EEC) No 2472/90 of 31 July 1990.
Delivered in open court in Luxembourg on 18 December 1997.
R. Grass
M. Wathelet
Registrar
President of the First Chamber
1: Language of the case: German.
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