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

Provisional text

JUDGMENT OF THE COURT (Sixth Chamber)

25 May 2023 (*)

(Reference for a preliminary ruling – Regulation (EEC) No 2658/87 – Customs Union – Common Customs Tariff – Tariff classification – Combined Nomenclature – Heading 7307 – Tube or pipe fittings – Subheading 7307 22 10 – Sleeves)

In Case C‑368/22,

REQUEST for a preliminary ruling under Article 267 TFEU from the Vestre Landsret (High Court of Western Denmark), made by decision of 9 May 2022, received at the Court on 8 June 2022, in the proceedings

Skatteministeriet

v

Danish Fluid System Technologies A/S,

THE COURT (Sixth Chamber),

composed of P.G. Xuereb (Rapporteur), President of the Chamber, T. von Danwitz and I. Ziemele, Judges,

Advocate General: A.M. Collins,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

–        the Danish Government, by C. Maertens, acting as Agent, and by B. Søes Petersen, advokat,

–        the European Commission, by K. Rasmussen and M. Salyková, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1        This request for a preliminary ruling concerns the interpretation of tariff subheading 7307 22 10 of 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 Council Regulation (EC) No 254/2000 of 31 January 2000 (OJ 2000 L 28, p. 16) (‘Regulation No 2658/87’), in the versions resulting, successively, from Commission Regulation (EC) No 948/2009 of 30 September 2009 (OJ 2009 L 287, p. 1), Commission Regulation (EU) No 861/2010 of 5 October 2010 (OJ 2010 L 284, p. 1), Commission Regulation (EU) No 1006/2011 of 27 September 2011 (OJ 2011 L 282, p. 1) and Commission Implementing Regulation (EU) No 927/2012 of 9 October 2012 (OJ 2012 L 304, p. 1) (‘the CN’).

2        The request has been made in proceedings between the Skatteministeriet (Ministry of Taxation, Denmark) and Danish Fluid System Technologies A/S (‘DFST’) concerning the tariff classification of five tube or pipe fittings.

 Legal context

 The HS

3        The Harmonised Commodity Description and Coding System (‘the HS’) was established by the International Convention on the Harmonised Commodity Description and Coding System, concluded in Brussels on 14 June 1983 within the framework of the World Customs Organization (WCO) and approved, with its amending protocol of 24 June 1986, on behalf of the European Economic Community by Council Decision 87/369/EEC of 7 April 1987 (OJ 1987 L 198, p. 1). The explanatory notes to the HS are drawn up within the WCO in accordance with the provisions of that convention.

4        Under Article 3(1)(a)(ii) of that convention, each Contracting Party undertakes to apply the general rules for the interpretation of the HS and all the section, chapter and subheading notes and is not to modify the scope of the sections, chapters, headings or subheadings.

5        The Explanatory Notes relating to heading 7307 of the HS are worded as follows:

‘This heading covers fittings of iron or steel, mainly used for connecting the bores of two tubes together, or for connecting a tube to some other apparatus, or for closing the tube aperture. This heading does not however cover articles used for installing pipes and tubes but which do not form an integral part of the bore (e.g., hangers, stays and similar supports which merely fix or support the tubes and pipes on walls, clamping or tightening bands or collars (hose clips) used for clamping flexible tubing or hose to rigid piping, taps, connecting pieces, etc.) (heading 73.25 or 73.26).

The connection is obtained:

–        by screwing, when using cast iron or steel threaded fittings;

–        or by welding, when using butt‑welding or socket‑welding steel fittings. In the case of butt‑welding, the ends of the fittings and of the tubes are square cut or chamfered;

–        or by contact, when using removable steel fittings.

This heading therefore includes flat flanges and flanges with forged collars, elbows and bends and return bends, reducers, tees, crosses, caps and plugs, lap joint stub‑ends, fittings for tubular railings and structural elements, off sets, multi‑branch pieces, couplings or sleeves, clean out traps, nipples, unions, clamps and collars.

…’

 The CN

6        As is apparent from Article 1(1) of Regulation No 2658/87, the CN, established by the European Commission, governs the tariff classification of goods imported into the European Union. It reproduces the HS six-digit headings and subheadings, with only the seventh and eighth figures creating further subheadings which are specific to it.

7        Under Article 12(1) of Regulation No 2658/87, the Commission is to adopt each year a regulation reproducing the complete version of the CN, together with the rates of customs duty in accordance with Article 1, as resulting from measures adopted by the Council of the European Union or the Commission. That regulation is to be published not later than 31 October in the Official Journal of the European Union and it is to apply from 1 January of the following year.

8        Under the general rules for the interpretation of the CN, which are set out in Part One, Section I, Section A, of Annex I to Regulation No 2658/87:

‘Classification of goods in the [CN] shall be governed by the following principles:

1.      The titles of sections, chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the following provisions.

…

6.      For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section and chapter notes also apply, unless the context requires otherwise.’

9        Annex I to Regulation No 2658/87 contains a Part Two, entitled ‘Schedule of Customs Duties’, Section XV of which is entitled ‘Base metals and articles of base metal’. That section includes Chapter 73, entitled ‘Articles of iron or steel’, heading 7307 of which is worded as follows:

10      Pursuant to the second indent of Article 9(1)(a) of Regulation No 2658/87, the Commission draws up explanatory notes for the CN, which it publishes regularly in the Official Journal of the European Union. Those published on 7 May 2008 (OJ 2008 C 112, p. 8) and 6 May 2011 (OJ 2011 C 137, p. 1), applicable on the date of the imports at issue in the main proceedings, do not contain separate notes for CN subheadings 7307 22 10 and 7307 29 10.

 The Integrated Tariff of the European Union (TARIC)

11      The fifth recital in the preamble to Regulation No 2658/87 states:

‘Whereas certain specific Community measures cannot be dealt with in the framework of the [CN]; whereas it is therefore necessary to create additional Community subdivisions and to include them in an integrated tariff of the European Communities (Taric); …’

12      Article 2 of that regulation provides:

‘A [TARIC], which meets the requirements of the Common Customs Tariff, external trade statistics, the commercial, agricultural and other Community policies concerning the importation or exportation of goods, shall be established by the Commission.

The tariff shall be based on the [CN] and include:

(a)      the measures contained in this Regulation;

(b)      the additional Community subdivisions, referred to as “Taric subheadings”, which are needed for the implementation of specific Community measures listed in Annex II;

…’

13      As regards CN subheading 7307 22 10, the TARIC provides for two codes, namely TARIC code 7307 22 10 10 (sleeves for use in certain types of aircraft) and TARIC code 7307 22 10 90 (other sleeves). As regards CN subheading 7307 29 10, the TARIC also contains two codes, namely TARIC code 7307 29 10 10 (other threaded, for use in certain types of aircraft) and TARIC code 7307 29 10 90 (other threaded).

 The dispute in the main proceedings and the question referred for a preliminary ruling

14      DFST, a company established in Denmark, imports tube and pipe fittings from the American manufacturer Swagelok. Most imported goods are subsequently exported, mainly to Russia and Ukraine, and are used to assemble specially treated pipes which are used, inter alia, in the pharmaceutical industry and in the petrochemical, oil and gas industry.

15      In the summer of 2013, the Danish tax authorities carried out an inspection of various tube and pipe fittings imported by DFST between October 2010 and August 2013.

16      During that inspection, the Danish tax authorities took, for an in-depth inspection, ten tube or pipe fittings, all declared as threaded stainless steel sleeves, covered by TARIC code 7307 22 10 90, for which a customs duty rate of 0% is laid down. The case brought before the Vestre Landsret (High Court of Western Denmark), which is the referring court, concerns the classification of only five of those products, namely product Nos 2, 3, 4, 5 and 10 (‘the products at issue’).

17      According to the information in the manufacturer’s catalogue, product No 2 is a ‘straight fitting union’, product No 3 corresponds to a ‘straight fitting male connector’, product No 4 is a ‘straight fitting female connector’, product No 5 corresponds to a ‘straight fitting reducer’ and product No 10 is a ‘tube adapter male’.

18      For the purposes of that inspection, the Danish tax authorities asked the analytical institute Force Technology (‘the analytical institute’) to examine the products at issue and propose their tariff classification.

19      According to the analytical institute, product No 2 consists of ‘a small tube with a hexagonal element in the middle which is suitable for the use of a hexagonal spanner and [which has], on either side, a clamp fitting and the nut and the ferrules which form part of it’. Product No 3 consists of ‘a small tube with a hexagonal element in the middle suitable for the use of a hexagonal spanner and, on one side, a gas thread and, on the other side, a thread with the nut and the ferrules which form part of it’. Product No 4 is ‘a small tube one side of which is a sleeve (female connector), that is to say, a hexagonal end with an internal thread, and the other side of which is a clamp fitting with a nut and with two ferrules’. Product No 5 consists of ‘a small tube with a hexagonal element in the middle suitable for the use of a hexagonal spanner and, on one side, a threaded clamp fitting with the nut and the ferrules which form part of it’. Lastly, product No 10 is ‘a small tube with a hexagonal element in the middle suitable for the use of a hexagonal spanner and, on one side, a gas thread’.

20      The analytical institute concluded that the products at issue could not be regarded as ‘sleeves’, because they were not short tube sections, with an internal thread or without a thread, used to join two tubes by screwing them into the tube section or by simply pushing them into the tube section.

21      By decision of 15 October 2013, referring to the examination carried out by the analytical institute, which had concluded that none of the products at issue could be classified as ‘sleeves’, the Danish tax authorities classified the products at issue under TARIC code 7307 29 10 90.

22      DFST challenged that decision before the competent administrative authority, namely the Landsskatteretten (National Tax Tribunal, Denmark), which, by a decision of 27 September 2019, took the view that the products at issue, which it considered to be straight tube fittings, should not be classified under TARIC code 7307 29 10 90 as ‘other stainless steel threaded articles’, but rather, having regard to their characteristics and objective properties, should be classified under TARIC code 7307 22 10 90, as ‘threaded stainless steel sleeves’, in accordance with the CN general interpretive rules 1 and 6.

23      By application of 19 December 2019, the Ministry of Taxation brought an action against that decision before the referring court.

24      Before that court, the Ministry of Taxation claims that the products at issue cannot be classified under TARIC code 7307 22 10 90 since they are not ‘sleeves’, but rather come under TARIC code 7307 29 10 90. The products at issue all have external threads and several are also fitted with ferrules. Having regard to the respective definitions of the terms ‘sleeve’ and ‘nipple’ in various dictionaries and from other sources, from which it is apparent that the term ‘sleeve’ is defined as relating to a section of tube which is the counterpart of the section of tube designated by the term ‘nipple’ and that a nipple is systematically described as having an exterior thread, those products cannot therefore be classified as sleeves.

25      DFST contends, relying in particular on the Explanatory Notes relating to CN heading 7307 and on the general rules and principles relating to the classification of goods in the HS, that the products at issue were correctly classified under TARIC code 7307 22 10 90. That conclusion is not called into question by the extracts from the dictionaries that have been selected arbitrarily.

26      According to DFST, the Binding Tariff Information (BTI) issued by Ireland and bearing the reference IE 08NT‑14-284-03, which concerns product No 2, as well as seven other BTIs, further confirm that the tax authorities of other EU countries classify goods such as the products at issue under TARIC code 7307 22 10 90. The Spanish BTI bearing the reference ES-2014-000535-0324/14 shows, moreover, that a sleeve may have an external thread.

27      In those circumstances, the Vestre Landsret (High Court of Western Denmark) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Is subheading 7307 22 10 of the Combined Nomenclature of the Common Customs Tariff, as amended by Annex I to [Regulation No 861/2010], to be interpreted as covering goods such as those at issue in the main proceedings?’

 Consideration of the question referred

 Preliminary observations

28      In its question, the referring court refers to the CN in the version resulting from Annex I to Regulation No 861/2010, which was applicable in 2011. It is nevertheless apparent from the information provided by that court that the imports which gave rise to the dispute in the main proceedings took place between October 2010 and August 2013. It therefore appears, which is a matter for the referring court to verify, that the versions of the CN applicable to the case in the main proceedings are those resulting, respectively, from Regulation No 948/2009, which amended the CN with effect from 1 January 2010, from Regulation No 861/2010, which amended the CN with effect from 1 January 2011, from Regulation No 1006/2011, which amended the CN with effect from 1 January 2012, and from Implementing Regulation No 927/2012, which amended the CN with effect from 1 January 2013.

29      However, since the wording of the provisions of the CN relevant to the case in the main proceedings is the same in all those versions, it is sufficient to examine the question referred taking into account the CN in the version resulting from Annex I to Regulation No 861/2010.

 The question referred

30      As a preliminary point, it should be noted that, when the Court is requested to give a preliminary ruling on a matter of tariff classification, its task is to provide the referring court with guidance on the criteria which will enable it to classify the products concerned correctly in the CN, rather than to effect that classification itself. That classification results from a purely factual assessment which it is not for the Court to make in the context of a reference for a preliminary ruling (judgment of 20 October 2022, Mikrotīkls, C‑542/21, EU:C:2022:814, paragraph 21 and the case-law cited).

31      Furthermore, it must be stated that, according to settled case-law, in the procedure laid down by Article 267 TFEU, providing for cooperation between national courts and the Court of Justice, it is for the latter to provide the referring court with an answer which will be of use to it and enable it to determine the case before it. In that light, the Court may have to reformulate the questions referred to it (judgment of 8 September 2016, Schenker, C‑409/14, EU:C:2016:643, paragraph 72 and the case-law cited).

32      In the present case, it is apparent from the order for reference that, by its question, the referring court asks, in essence, whether CN subheading 7307 22 10 must be interpreted as meaning that stainless steel tube or pipe fittings, other than cast fittings, which have an external thread and do not constitute short tube sections with an internal thread, used to join two tubes by screwing them into that fitting or by simply pushing them into that fitting, may be regarded as being ‘sleeves’ under that subheading.

33      It follows from the Court’s settled case-law that, in the interests of legal certainty and for 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 wording of the relevant heading of the CN and of the notes to the sections or chapters (judgment of 30 April 2020, DHL Logistics (Slovakia), C‑810/18, EU:C:2020:336, paragraph 25 and the case-law cited).

34      Under the general rules for the interpretation of the CN, for legal purposes, the classification of goods in the subheadings of a heading is to be determined according to the terms of those subheadings and any related subheading, section or chapter notes, with the wording of section, chapter and subchapter titles being considered to be provided for ease of reference only.

35      The Explanatory Notes drafted by the Commission, in respect of the CN, and those adopted by the WCO, in respect of the HS, are an important aid for interpreting the scope of the various tariff headings but do not have legally binding force. The Explanatory Notes to the CN do not take the place of those to the HS but should be regarded as complementary to them and consulted jointly with them (judgment of 15 April 2021, Vogel Import Export, C‑62/20, EU:C:2021:288, paragraph 31 and the case-law cited).

36      In the present case, CN heading 7307 covers tube or pipe fittings, of iron or steel. It comprises three categories, the first of which is referred to by the term ‘cast fittings’, the second by the words ‘other, of stainless steel’ and the third by the word ‘other’.

37      It is common ground between the parties to the main proceedings that the products at issue come under the second of those categories. That category establishes a distinction between four subcategories, namely, first, ‘flanges’, second, ‘threaded elbows, bends and sleeves’, including ‘sleeves’ under CN subheading 7307 22 10, third ‘butt welding fittings’ and, fourth, ‘other’ tube or pipe fittings, including other threaded tube or pipe fittings under CN subheading 7307 29 10. Being a residual category, the latter category consequently refers to other threaded tube or pipe fittings of stainless steel other than those covered by the three previous subcategories. It is common ground between the parties to the main proceedings that the products at issue come under either the second or the fourth of those subcategories depending on whether or not they can be regarded as threaded ‘sleeves’.

38      It is therefore necessary to determine what is covered by the concept of ‘sleeves’ within the meaning of CN subheading 7307 22 10.

39      That concept is not defined in the CN or the HS, or in the Explanatory Notes to the CN or to the HS.

40      In that respect, it must also be pointed out that, according to settled case-law, the meaning and scope of terms for which EU law provides no definition must be determined according to their meaning in everyday language whilst considering the context in which they occur and the purposes of the rules of which they form part (judgment of 26 March 2020, Pfizer Consumer Healthcare, C‑182/19, EU:C:2020:243, paragraph 48 and the case-law cited).

41      As regards, in the first place, the usual meaning in everyday language of the term ‘sleeves’, it is apparent from several dictionaries and other sources to which the Danish tax authorities referred, in the main proceedings, and the Danish Government referred, in its written observations, that, in Danish, German and English, the term ‘sleeve’ is defined as a short tube, intended to surround the ends of two pipes, and that the tube or pipe fitting so named is the counterpart of that designated by the term ‘nipple’, the fitting described by this name being defined as either smooth or having an external thread. It follows that, according to those dictionaries and sources, a sleeve, if it is not smooth, can only have an internal thread, since it could not otherwise surround the ends of the pipes which it connects.

42      In the second place, as regards the context in which the concept of ‘sleeves’ is used, it should be noted, first, that, as the Commission stated, in essence, in its written observations, numerous terms designating tube and pipe fittings in the HS, the CN and in the Explanatory Notes to the HS and those to the CN appear to be inspired, in several language versions, by terms corresponding to certain forms such as parts of the body, the letters of the alphabet or clothing, and therefore give an indication as to the shape of the type of fitting concerned. For example, the Danish words ‘rørknæ’ and ‘rørbøjninger’ (‘elbows’ and ‘bends’ in English and ‘coudes’ and ‘courbes’ in French) designate a product which, like a knee (knæ), is curved, just as the term ‘muffe’ (‘sleeve’ in English and ‘manchon’ in French) appears to indicate that the product so designated is shaped like a sleeve. In that regard, the fact that, as DFST submitted in the main proceedings, the Danish term ‘muffe’ can be translated into English in several ways is irrelevant, since the English version of the CN uses the word ‘sleeve’ to translate the term.

43      Second, given that the Explanatory Notes relating to heading 7307 of the HS refer, in addition to sleeves, to other products such as reducers and unions, it must be held that those products must be distinguished from sleeves. Accordingly, in the event that the products at issue in the main proceedings should be considered to be reducers and unions, they could not be regarded as coming under CN subheading 7307 22 10. As the Commission noted in its written observations, that could in particular be the case of product No 2 and product No 5, those products having been described by the manufacturer as being, respectively, a straight fitting union and a straight fitting reducer, which is a matter for the referring court to ascertain.

44      Third, given that the Explanatory Notes to the HS, by referring to ‘sleeves and nipples’, distinguish between the concept of ‘sleeve’ and that of ‘nipple’, it must be held that a sleeve and a nipple are two different products, each with their own characteristics. In the light of the definitions of the term ‘nipple’ in a number of dictionaries and sources, from which it is apparent, as has been pointed out in paragraph 41 of this judgment, that nipples, if not smooth, have an external thread, it must be concluded that only the definition of the term ‘sleeve’ proposed by the analytical institute and referred to in paragraph 20 above makes it possible to distinguish between sleeves and nipples.

45      Fourth, as the Commission noted in its written observations, some of the products at issue seem to possess the characteristics of several types of tube and pipe fittings referred to in the CN or in the Explanatory Notes to the HS. Given that, as has been noted in paragraph 37 above, the category of other stainless steel tube and pipe fittings, other than cast fittings, includes, in addition to three more specific subcategories, including that referring to ‘threaded elbows, bends and sleeves’, a subcategory ‘other’, those products must be classified under the latter subheading, namely CN subheading 7307 29 10, in as much as they do not correspond exclusively to the concept of ‘sleeves’, which it is, however, for the referring court to ascertain.

46      It follows that stainless steel tube or pipe fittings, other than cast fittings, which have an external thread and do not constitute short tube sections with an internal thread, used to join two tubes by screwing them into that fitting or by simply pushing them into that fitting, must be regarded as coming under CN subheading 7307 29 10.

47      This assessment is not called into question by the practice of some Member States in relation to BTI. It is apparent from the Commission’s written observations that the Irish BTI with reference IE 08NT‑14-284-03, relied on by DFST in the main proceedings, was revoked. Furthermore, the other BTIs to which the parties to the main proceedings, the Danish Government and the Commission have referred in the main proceedings and in their written observations in the present proceedings, appear to confirm that assessment, subject to a few exceptions.

48      In the light of the foregoing, the answer to the question referred is that CN subheading 7307 22 10 must be interpreted as meaning that stainless steel tube or pipe fittings, other than cast fittings, which have an external thread and do not constitute short tube sections with an interior thread, used to join two tubes by screwing them into that fitting or by simply pushing them into that fitting, cannot be regarded as being ‘sleeves’ coming under that subheading.

 Costs

49      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. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Sixth Chamber) hereby rules:

Subheading 7307 22 10 of 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, as amended by Council Regulation (EC) No 254/2000 of 31 January 2000, in the version resulting from Commission Regulation (EU) No 861/2010 of 5 October 2010,

must be interpreted as meaning that stainless steel tube or pipe fittings, other than cast fittings, which have an external thread and do not constitute short tube sections with an interior thread, used to join two tubes by screwing them into that fitting or by simply pushing them into that fitting, cannot be regarded as being ‘sleeves’ coming under that subheading.

[Signatures]

*      Language of the case: Danish.

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