Court of Justice of the European Communities (including Court of First Instance Decisions)

JUDGMENT OF THE COURT (Second Chamber)

9 October 1997(1)

(Common Customs Tariff - Tariff headings - Copiers and fax machines - Classification in the combined nomenclature)

In Case C-67/95,

REFERENCE to the Court under Article 177 of the EC Treaty by the Tariefcommissie (Netherlands) for a preliminary ruling in the proceedings pending before that court between

Rank Xerox Manufacturing (Nederland) BV

and

Inspecteur der Invoerrechten en Accijnzen

on the interpretation of Commission Regulation (EEC) No 2587/91 of 26 July 1991 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ 1991 L 259, p. 1),

THE COURT (Second Chamber),

composed of: R. Schintgen, President of the Chamber, G.F. Mancini and G. Hirsch (Rapporteur), Judges,

Advocate General: A. La Pergola,

Registrar: L. Hewlett, Administrator,

after considering the written observations submitted on behalf of:

• Rank Xerox Manufacturing (Nederland) BV, by D.G. van Vliet and E.N. Punt, tax advisers,
  
  
• the Commission of the European Communities, by H. van Lier, Legal Adviser, acting as Agent, assisted by J. Stuyck, of the Brussels Bar,

having regard to the Report for the Hearing,

after hearing the oral observations of Rank Xerox Manufacturing (Nederland) BV and the Commission at the hearing on 14 November 1996,

after hearing the Opinion of the Advocate General at the sitting on 12 December 1996,

gives the following

Judgment

1. By order of 3 March 1995, received at the Court on 13 March 1995, the Tariefcommissie (Administrative Court for Customs and Excise) referred to the Court for a preliminary ruling under Article 177 of the EC Treaty a question on the interpretation of Commission Regulation (EEC) No 2587/91 of 26 July 1991 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ 1991 L 259, p. 1).
   
   
2. That question has been raised in proceedings between Rank Xerox Manufacturing (Nederland) BV, a company governed by Netherlands law (hereinafter 'Rank Xerox'), and the Inspecteur der Invoerrechten en Accijnzen (Inspector of Customs and Excise), Venlo, concerning the tariff classification of two machines, the Xerox 3010 and the Xerox 3010 Editor, which can both send faxes and make copies and, in the case of the Xerox 3010 Editor, also edit the images received.
   
   
3. The machines comprise essentially a scanner, a digital memory and a laser printer. The data of a document or picture are digitalized using the scanner. Thus digitalized, the data or images picked up by the scanner or, in the second option available on both machines, sent from other fax machines and transmitted by ordinary telecommunication lines are stored in the internal memory of the machines. There they can be processed, re-stored after processing, transmitted in their initial form or after processing or printed out using the electronic printing system.
   
   
4. At the material time, Regulation No 2587/91 provided as follows, in relation to heading 8472 of the Combined Nomenclature (hereinafter 'the CN'), which forms part of Chapter 84 covering 'Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof':
   
   'Chapter 84
   
   ...
   
   8472 Other office machines (for example, hectograph or stencil duplicating machines, addressing machines, automatic banknote dispensers, coin-sorting machines, coin-counting or wrapping machines, pencil-sharpening machines, perforating or stapling machines):
   
   8472 10 00 - Duplicating machines
   
   ...
   
   8472 90 - Other:
   
   8472 90 10 - - Coin-sorting, coin-counting or coin-wrapping machines
   
   8472 90 90 - - Other'.
   
   
5. Heading 8517 in Chapter 85 of the CN ('Machinery and mechanical appliances; electrical equipment; parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles') covers 'Electrical apparatus for line telephony or line telegraphy, including such apparatus for carrier-current line systems'.
   
   
6. Code 9009 of the CN, which appears in Chapter 90 of the CN entitled 'Optical [and] photographic ... instruments ...', covers:
   
   '9009 Photocopying apparatus incorporating an optical system or of the contact type and thermo-copying apparatus:
   
   
   • Electrostatic photocopying apparatus:

   9009 11 00 - - Operating by reproducing the original image directly onto the copy (direct process)
   
   9009 12 00 - - Operating by reproducing the original image via an intermediate onto the copy (indirect process)
   
   

   • - Other photocopying apparatus:

   9009 21 00 - - Incorporating an optical system
   
   9009 22 - - Of the contact type:
   
   ...
   
   9009 30 00 - Thermo-copying apparatus'.
   
   

7. The notes to Section XVI, which relate to Chapters 84 and 85, state inter alia, with regard to the relationships between Chapters 84, 85 and other headings, such as those included in Chapter 90:
   
   '1. This section does not cover:
   
   (a) ...
   
   (m) articles of Chapter 90;
   
   2. ...
   
   3. Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.
   
   4. ...
   
   5. For the purposes of these notes, the expression "machine" means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of Chapter 84 or 85.'
   
   
8. According to the General rules for the interpretation of the combined nomenclature, set out in Part One, Section I, A, of the CN, 'Classification of goods in the nomenclature shall be governed by the following principles:
   
   1. ...
   
   2. (a) ...
   
   (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3.
   
   3. When by application of rule 2(b) or for any other 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. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.
   
   (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, 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.
   
   (c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
   
   ...'
   
   
9. The Annex to Commission Regulation (EEC) No 3417/88 of 31 October 1988 concerning the classification of certain goods in the combined nomenclature (OJ 1988 L 301, p. 8) classifies an 'electronic system for printing from digital data' under sub-heading 8472 90 90 on the ground that:
   
   'Classification is determined by the provisions of general rule 1 and texts of CN codes 8472 and 8472 90 90.
   
   A laser beam discharges selectively a precharged electro-sensitive surface corresponding to the required image. Negatively charged particles of dry ink are then applied to the photoreceptor where they adhere to the positive area to form the desired image. This image is then transferred onto a positively charged sheet of paper, and subsequently fixed by heat. Heading 9009 does not apply as the print is produced directly from digital data and not by means of an original document'.
   
   
10. In order to ensure uniform application of the CN and to eliminate certain difficulties affecting the classification of laser copiers of that kind, the Commission adopted Regulation (EC) No 1165/95 of 23 May 1995 concerning the classification of certain goods in the combined nomenclature (OJ 1995 L 117, p. 15), point 6 of the Annex to which mentions, under sub-heading 9009 12 00, a 'laser copier comprising mainly a device for scanning (scanner), a digital image processing device and a printing device (laser printer) contained in a housing. The scanning device uses an optical system, consisting of a lamp, mirrors, lenses and photocells to scan the original image line by line.
    
    The copies are produced electrostatically via a drum on the laser printer using the indirect process.
    
    The laser copier has several additional features for altering the original image, e.g. reduction, enlargement, shading'.
    
    The reason for choosing that sub-heading is that 'Classification is determined by the provisions of general rules 1 and 6 for the interpretation of the combined nomenclature and by the wording of CN codes 9009 and 9009 12 00'.
    
    
11. In January 1992, Rank Xerox imported into the Netherlands Xerox 3010 and Xerox 3010 Editor machines, specifying sub-heading 9009 21 00 for the purposes of tariff classification.
    
    
12. One month later, Rank Xerox lodged an objection against its own declaration, requesting classification of those machines under sub-heading 8472 90 90 of the CN.
    
    
13. Following confirmation of the initial classification by the Inspector and an unsuccessful objection to that decision, Rank Xerox brought the matter before the Tariefcommissie.
    
    
14. Taking the view that the machines in question are of recent manufacture and are extremely modern and that the CN must be interpreted uniformly, the Tariefcommissie stayed proceedings and referred the following question to the Court:
    
    'How is the Common Customs Tariff, as amended by Regulation (EEC) No 2587/91, to be interpreted for the purposes of the tariff classification of the Xerox 3010 and Xerox 3010 Editor machines described in the body of the present reference?'
    
    
15. In support of its view that the Xerox 3010 and Xerox 3010 Editor machines should be classified under heading 8472 90 90, Rank Xerox maintains that they cannot be treated like photocopying apparatuses incorporating an optical system falling within Chapter 90, as contended by the Commission, since the scanner does not display the features of an optical system of that kind. Rank Xerox also claims that it is apparent from Regulation No 3417/88 and from the general classification rules that the machines fall within sub-heading 8472 90 90.
    
    
16. According to the Commission, however, the Xerox 3010 and Xerox 3010 Editor machines must be classified as photocopiers under sub-heading 9009 12 00.
    
    
17. In the first place, the Court must refer to its settled case-law according to which, in the interests of legal certainty and ease of verification, the decisive criterion for the classification of goods for customs purposes is in general to be sought in their objective characteristics and properties, as defined in the relevant headings of the Common Customs Tariff and the notes to the sections or Chapters. Likewise, for the purpose of interpreting the Common Customs Tariff, both the notes which head the Chapters of the Common Customs Tariff and the explanatory notes to the nomenclature of the Customs Cooperation 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, to that effect, Joined Cases C-59/94 and C-64/94 Ministre de Finances v Pardo & Fils and Camicas [1995] ECR I-3159, paragraph 10, and Case C-121/95 VOBIS Microcomputer v Oberfinanzdirektion München [1996] ECR I-3047, paragraph 13).
    
    
18. As regards the relationship between the sub-heading contended for by Rank Xerox (8472 90 90), that decided on by the Inspector (9009 21 00) and that proposed by the Commission (9009 12 00), it is apparent from point 1(m) of the notes to Section XVI of the CN that classification of the machines concerned under one of the headings or sub-headings of Chapter 90 would exclude application of Chapters 84 and 85 and any of the sub-headings of either of those Chapters. It is therefore appropriate to consider first the possibility of classification under one of the headings or sub-headings of Chapter 90 and more specifically heading 9009 ('Photocopying apparatus incorporating an optical system or of the contact type and thermo-copying apparatus').
    
    
19. In that connection, Rank Xerox contends that the Xerox 3010 and Xerox 3010 Editor cannot be regarded as optical reproduction systems since, by contrast with traditional photocopying apparatuses, they convert the image into digital data.
    
    
20. That argument cannot be upheld.
    
    
21. As the Commission rightly points out, heading 9009 includes, in addition to photocopiers incorporating an optical system and of the direct reproduction type, those which incorporate an intermediate for reproduction by the indirect process. In this case, reproduction by the indirect process is effected by converting the image into digital data.
    
    
22. It is irrelevant that the indirect process common to the two machines relies on modern technology. The Court held in Case 122/80 Analog Devices v Hauptzollamt München-Mitte and Hauptzollamt München-West [1981] ECR 2781, paragraph 12, that, even though it cannot be denied that technical developments in the industrial sector concerned justify the drawing up of a new customs classification, it is for the competent Community institutions to take account thereof by amending the Common Customs Tariff. In those circumstances, failing such an amendment, the interpretation of the tariff cannot vary as and when technology changes.
    
    
23. Consequently, by virtue of their function as photocopiers, the two machines are classifiable under heading 9009, and more specifically under sub-heading 9009 12 00. Sub-heading 9009 21 00 adopted by the Inspector is not applicable because, according to the description of the machines given by Rank Xerox in its observations, it appears that both of them form part of electrostatic apparatuses.
    
    
24. Furthermore, Rank Xerox's argument that the two machines must be assimilated to office machines and therefore fall within heading 8472, and more particularly sub-heading 8472 90 90, cannot be accepted either.
    
    
25. Heading 8472 covers, on a wholly residual basis, office machines which are mainly mechanical in structure and operation, as is moreover clear from the description given by way of example by the CN. In contrast, the machines at issue are, as the Advocate General observes in point 13 of his Opinion, made up of components of an electronic nature, the mechanisms of which are not comparable to the simpler structure which characterizes the residual category covered by heading 8472.
    
    
26. Nor is that interpretation affected by Regulation No 3417/88. It is apparent from the reasons set out in the table annexed to it that classification of an electronic printing system under that sub-heading is based on the printing method; where the print is produced simply from digital data and not from an original document, heading 9009 is inappropriate. Also, where, as in this case, the print is produced by means of an original document, heading 9009 is appropriate, not sub-heading 8472 90 90.
    
    
27. In addition to the classification thus based on the function of the machines as copiers, it must be borne in mind, as noted by the Advocate General in point 15 of his Opinion, that they operate as fax machines. Thus, both machines might also be classified under heading 8517, covering electrical apparatuses for line telephony or line telegraphy, in which it is also appropriate to include fax machines.
    
    
28. For the purpose of classifying multi-function machines under the most appropriate heading, it is necessary first to exclude the priority rule contained in note 3 to Section XVI of the CN. It is apparent from note 5 to the same section that the priority rule relates only to 'machines' covered by Chapters 84 and 85. However, with the exception of heading 8517, which is relevant in so far as the apparatuses in question allow fax transmission, those apparatuses, as photocopiers, fall within Chapter 90.
    
    
29. Accordingly, apparatuses such as those at issue in the main proceedings must be classified for customs purposes in accordance with the general rules of the CN.
    
    
30. In the case of composite articles which 'are prima facie classifiable under two or more headings', general rule 3 in Section I of the CN, and more particularly paragraph (c) thereof, is applicable. The rule concerning specific descriptions in paragraph (a) is excluded since the relevant tariff headings fall within different Chapters; the rule in paragraph (b) does not apply since the apparatuses in question display no feature enabling their essential character to be determined.
    
    
31. Pursuant to general rule 3(c) in Section I of the CN, apparatuses such as those at issue in the main proceedings must be classified under the heading which occurs last in numerical order amongst those which equally merit consideration. Thus, having regard to the relevant headings, the said apparatuses must be classified under sub-heading 9009 12 00.
    
    
32. That same classification was also adopted, for composite apparatuses of that type, by Regulation No 1165/95, which was not yet in force at the material time.
    
    
33. Therefore, in view of all the foregoing considerations, the answer to the question submitted must be that Regulation No 2587/91 must be interpreted as meaning that apparatuses such as the Rank Xerox 3010 and Rank Xerox 3010 Editor, comprising a scanning device (scanner), a digital storage device (memory) and a printing device (laser printer), fall within sub-heading 9009 12 00 of that regulation.
    
    Costs
    
    
34. 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 (Second Chamber),

    
    
    in answer to the question referred to it by the Tariefcommissie by order of 3 March 1995, hereby rules:
    
    Commission Regulation (EEC) No 2587/91 of 26 July 1991 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff must be interpreted as meaning that apparatuses such as the Rank Xerox 3010 and Rank Xerox 3010 Editor, comprising a scanning device (scanner), a digital storage device (memory) and a printing device (laser printer), fall within sub-heading 9009 12 00 of that regulation.
    
    
    

Delivered in open court in Luxembourg on 9 October 1997.

R. Grass

Registrar

1: Language of the case: Dutch.