JUDGMENT OF THE COURT (First Chamber)

28 March 2000 (1)

(Common Customs Tariff - Tariff headings - Classification in the combinednomenclature - Regulation (EC) No 1509/97 - Rectangular wood blocks used inthe construction of window frames)

In Case C-309/98,

REFERENCE to the Court under Article 177 of the EC Treaty (now Article 234EC) by the Finanzgericht München, Germany, for a preliminary ruling in theproceedings pending before that court between

Holz Geenen GmbH

and

Oberfinanzdirektion München

on the validity of Commission Regulation (EC) No 1509/97 of 30 July 1997concerning the classification of certain goods in the combined nomenclature (OJ1997 L 204, p. 8),

THE COURT (First Chamber),

composed of: L. Sevón (Rapporteur), President of the Chamber, P. Jann andM. Wathelet, Judges,

Advocate General: F.G. Jacobs,

Registrar: D. Louterman-Hubeau, Principal Administrator,

after considering the written observations submitted on behalf of:

-    Holz Geenen GmbH, by H. Glashoff, Tax Adviser, and U. Reimer,Aussenwirtschaftsberater,

-    the Commission of the European Communities, by R.B. Wainwright,Principal Legal Adviser, and K. Schreyer, a national civil servant onsecondment to its Legal Service, acting as Agents, assisted by M. NúñezMüller, Rechtsanwalt, Hamburg,

having regard to the Report for the Hearing,

after hearing the oral observations of Holz Geenen GmbH and the Commission atthe hearing on 10 June 1999,

after hearing the Opinion of the Advocate General at the sitting on 8 July 1999,

gives the following

Judgment

1.

    By order of 24 June 1998, received at the Court on 10 August 1998, theFinanzgericht München (Finance Court, Munich) referred to the Court for apreliminary ruling under Article 177 of the EC Treaty (now Article 234 EC) aquestion on the validity of Commission Regulation (EC) No 1509/97 of 30 July1997 concerning the classification of certain goods in the combined nomenclature(OJ 1997 L 204, p. 8).

2.

    That question was raised in proceedings between Holz Geenen GmbH ('HolzGeenen‘) and the Oberfinanzdirektion München (Principal Revenue Office,Munich; 'the Oberfinanzdirektion‘) concerning the classification of certain goodsin the combined nomenclature ('the CN‘), as listed in Annex I to CommissionRegulation (EC) No 1734/96 of 9 September 1996 amending Annex I to CouncilRegulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on theCommon Customs Tariff (OJ 1996 L 238, p. 1).

3.

    Chapter 44 of the CN covers 'Wood and articles of wood; wood charcoal‘. Thebasic six-digit structure of heading 4418 'Builders' joinery and carpentry of wood,including cellular wood panels, assembled parquet panels, shingles and shakes‘ isas follows:

4418 10    Windows, frenchwindows and their frames

4418 20    Doors and their frames and thresholds

4418 30    Parquet panels

4418 40    Shuttering for concrete constructional work

4418 50    Shingles and shakes

4418 90    Other.

4.

    Subheading 4418 90 of the CN is subdivided into 4418 90 10 'Glue-laminatedtimber‘ and 4418 90 90 'Other‘.

5.

    Heading 4421 of the CN, the last in Chapter 44, is for the residual category 'Otherarticles of wood‘ and subheading 4421 90 99 is for the most residual of all, namely'Other - other - other‘.

6.

    On 2 January 1996, Holz Geenen sought the issue of binding tariff informationregarding goods described as 'laminated window scantlings‘ from theOberfinanzdirektion. According to the order for reference, those goods arerectangular wood blocks with slightly rounded edges and cross dimensions of 48 x72 mm or 85 x 72 mm (width x height) in which two layers of meranti are gluedtogether with a core of coniferous wood in such a way that the grain runs parallel.The goods are generally imported in lengths of 76 to 300 cm and used in theconstruction of window frames.

7.

    By information notice of 23 January 1996, the Oberfinanzdirektion classified thegoods as 'item of builders' carpentry of wood (glue-laminated timber)‘ under CNsubheading 4418 90 10.

8.

    The objection proceedings brought by Holz Geenen against that information noticewere stayed pending a decision by the Commission and then the objection wasdismissed by decision of 16 October 1997 of the Oberfinanzdirektion following theadoption by the Commission of Regulation No 1509/97 pursuant to Article 9 ofCouncil Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statisticalnomenclature and on the Common Customs Tariff (OJ 1987 L 256, p. 1).

9.

    In point 2 of the Annex to Regulation No 1509/97, the Commission classified'Rectangular wood blocks, 48 or 85 mm wide x 72 mm high, used in theconstruction of window frames, consisting of layers of wood glued together with thegrain running parallel and with slightly rounded edges‘ under CN subheading4418 90 10, which corresponded to the classification by the Oberfinanzdirektion inits information notice of 23 January 1996. The reason given in that annex is that'Classification is determined by the provisions of General Rules 1 and 6 for theinterpretation of the combined nomenclature and by the wording of CN codes4418, 4418 90 and 4418 90 10. Laminated wood is an item of builder's carpentry.‘

10.

    Holz Geenen brought an action against the decision of the Oberfinanzdirektionbefore the Finanzgericht München, claiming that the goods at issue are not itemsof builders' carpentry but 'Other articles of wood‘ within the meaning of CNheading 4421. It submits that Regulation No 1509/97 is unlawful in so far as itcontains a classification which deviates from the International Convention on theHarmonised Commodity Description and Coding System ('the HS‘), done atBrussels on 14 June 1983 and approved on behalf of the Community by CouncilDecision 87/369/EEC of 7 April 1987 (OJ 1987 L 198, p. 1; 'the Convention‘).

11.

    The national court states that, according to the Oberfinanzdirektion, thedesignation 'laminated wood‘ is neutral and not associated with a particularintended use for the goods. Since it can be used for all kinds of constructionpurposes, laminated wood is covered by the term 'builders' carpentry‘. Thedescription of the goods in Regulation No 1509/97 makes it clear that theCommission classifies laminated wood under CN heading 4418, irrespective of itsuse in construction for load-bearing or other purposes.

12.

    Since the Finanzgericht München shared Holz Geenen's uncertainty about thevalidity of Regulation No 1509/97, it decided to stay proceedings and to refer thefollowing question to the Court for a preliminary ruling:

'Is Commission Regulation (EC) No 1509/97 of 30 July 1997 concerning theclassification of certain goods in the combined nomenclature (OJ 1997 L 204, p. 8)- in this case rectangular wood blocks, 48 or 85 mm wide x 72 mm high, used inthe construction of window frames, consisting of layers of wood glued together withthe grain running parallel and with slightly rounded edges - invalid?‘

13.

    At the outset it must be recalled that the Council has conferred upon theCommission, acting in cooperation with the customs experts of the Member States,a broad discretion to define the subject-matter of tariff headings falling to beconsidered for the classification of particular goods. However, the Commission'spower to adopt the measures mentioned in Article 9(1)(a), (b), (d) and (e) ofRegulation No 2658/87 does not authorise it to alter the subject-matter of the tariffheadings which have been defined on the basis of the HS established by theConvention whose scope the Community has undertaken, under Article 3 thereof,not to modify (see Case C-267/94 France v Commission [1995] ECR I-4845,paragraphs 19 and 20).

14.

    It is settled case-law that, in the interests of legal certainty and for ease ofverification, the decisive criterion for the classification of goods for customspurposes is in general to be sought in their objective characteristics and propertiesas defined in the wording of the relevant heading of the CN. The explanatory notesdrawn up, as regards the CN, by the Commission and, as regards the HS, by theCustoms Cooperation Council ('the HSENs‘), may be an important aid to theinterpretation of the scope of the various tariff headings but do not have legallybinding force (see Case C-405/97 Mövenpick Deutschland v Hauptzollamt Bremen[1999] ECR I-2397, paragraph 18).

15.

    In addition, the intended use of a product may constitute an objective criterion forclassification if it is inherent to the product, and that inherent character must becapable of being assessed on the basis of the product's objective characteristics andproperties (see Case C-459/93 Thyssen Haniel Logistic [1995] ECR I-1381,paragraph 13).

16.

    In the present case, CN heading 4418 covers 'Builders' joinery and carpentry ofwood, including cellular wood panels, assembled parquet panels, shingles andshakes‘.

17.

    In its observations, the Commission contends that since CN heading 4418 is not aheading relating to use or intended use it is important to know how the termsincluded in it are to be objectively understood.

18.

    In this respect, the very wording of CN heading 4418, which refers to 'builders'‘goods, contains a criterion of intended use. That is borne out, moreover, by the firstparagraph of the HSENs to heading 44.18 which states that the heading 'appliesto woodwork ... used in the construction of any kind of building‘.

19.

    The second paragraph of the HSENs to heading 44.18 states that '[t]he term”joinery” applies more particularly to builders' fittings (such as doors, windows,shutters, stairs, door or window frames), whereas the term ”carpentry” refers towoodwork (such as beams, rafters and roof struts) used for structural purposes orin scaffoldings, arch supports, etc., and includes assembled shuttering for concreteconstructional work.‘

20.

    CN heading 4418 therefore includes, apart from certain exceptions which are notmaterial to the main proceedings, all wood components intended for use asbuilders' fittings or used in the structure of a building or in the construction thereof(scaffoldings, arch supports, etc.).

21.

    It is common ground that rectangular wood blocks such as those at issue in themain proceedings do not yet constitute 'incomplete or unfinished‘ windows orwindow frames within the meaning of Part One, Section I, entitled 'GeneralRules‘, A, which lists 'General rules for the interpretation of the combinednomenclature‘, point 2(a) of Annex I to Regulation No 1734/96. It follows thatthose blocks cannot constitute builders' joinery.

22.

    It is therefore necessary to examine whether such goods constitute builders'carpentry.

23.

    It is apparent from both the order for reference and Regulation No 1509/97 thatrectangular wood blocks such as those at issue in the main proceedings are usedin the construction of window frames. The national court also found that thoseblocks do not meet the requirements as to load-bearing capacity corresponding tothat of the goods covered by the designation builders' carpentry and, in this respect,Holz Geenen submitted, without being contradicted on this point by theCommission, that they are non-load-bearing building components of wood.

24.

    None of the evidence put before the Court suggests that such rectangular woodblocks are intended for use in the structure of a building or in the constructionthereof nor that their objective characteristics and properties are, in any way, thoseof goods covered by the designation 'builders' ... carpentry‘ mentioned in CNheading 4418. It follows that they cannot be classified under that heading.

25.

    That conclusion is not invalidated by the fact that the third paragraph of theHSENs to heading 44.18 states that 'Builders' carpentry also includes glue-laminated timber (glulam), which is a structural timber product obtained by gluingtogether a number of wood laminations having their grain essentially parallel.‘

26.

    In this respect, the meaning of the term 'glue-laminated timber (glulam)‘, which,moreover, also appears [in slightly different form] in the second paragraph of theHSENs to heading 44.12, which states that 'the heading does not cover massiveproducts such as laminated beams and arches (so-called ”glulam” products)(generally heading 44.18)‘, is limited in the context of CN heading 4418 by thewording of that heading. Furthermore, it is clear from the third paragraph of theHSENs to heading 44.18 that the glue-laminated timber to which that headingrefers is a structural timber product. In that context, the term 'glue-laminatedtimber‘ designates, therefore, a product obtained by gluing together a number ofwood laminations having their grain essentially parallel which is intended for usein the structure of a building or in the construction thereof.

27.

    Although it can be inferred from the third paragraph of the HSENs to heading44.18 that certain products made of glue-laminated timber are covered by thedesignation 'builders' ... carpentry‘ mentioned in CN heading 4418, it cannothowever be inferred from that designation that all products made of glue-laminatedtimber must be classified under CN heading 4418 as builders' carpentry. In orderfor such products to be classified under that heading they must have the objectivecharacteristics and properties defined by the wording of CN heading 4418.

28.

    It follows that when, in point 2 of the Annex to Regulation No 1509/97, theCommission classified 'Rectangular wood blocks, 48 or 85 mm wide x 72 mm high,used in the construction of window frames, consisting of layers of wood gluedtogether with the grain running parallel and with slightly rounded edges‘ under CNsubheading 4418 90 10, it altered the subject-matter of CN heading 4418.

29.

    Although the national court did not ask what the classification of goods such asthose at issue in the main proceedings should be if the question referred wereanswered in the affirmative, it is appropriate to furnish it with guidance on theinterpretation of Community law which may be of assistance in judging the casebefore it.

30.

    In this regard, the Court finds that the term 'laminated wood‘ is also used in theCN to designate a product obtained by gluing together a number of woodlaminations.

31.

    The term appears in particular in CN heading 4412 which concerns 'Plywood,veneered panels and similar laminated wood‘. It is apparent from Note 4 toChapter 44 of the CN and from the third paragraph of the HSENs to heading44.12 that products covered by that heading remain classified under that headingwhether or not they have been worked to form the shapes provided for in respectof the goods of heading No 4409, curved, corrugated, perforated, cut or formed toshapes other than square or rectangular or submitted to any other operationprovided it does not give such products the character of articles of other headings.None the less, it is clear from the wording of CN heading 4412 and from the firstparagraph of the HSENs to heading 44.12 that the product covered by that headingmust have at least one outer layer consisting of a sheet of veneer, that is to say athin layer of wood.

32.

    The term 'laminated wood‘ also appears in Note 3 to Chapter 44 of the CN whichstates that 'Heading Nos 4414 to 4421 apply to articles of ... laminated wood ... asthey apply to such articles of wood‘. As the Advocate General pointed out inparagraph 49 of his Opinion, if the rectangular wood blocks at issue in the mainproceedings are to fall under one of the headings which include articles oflaminated wood under that note, then it must be CN heading 4421, since CNheading 4418 does not apply, as is clear from paragraph 20 of the presentjudgment, and the other headings are clearly inappropriate. On that interpretationCN subheading 4421 90 99 offers the only possible classification of the blocks.

33.

    It is for the national court, on the basis of the foregoing guidance, to classify thegoods at issue in the main proceedings.

34.

    The answer to the question must therefore be that Regulation No 1509/97 is invalidin so far as point 2 of the Annex thereto classifies 'Rectangular wood blocks, 48or 85 mm wide x 72 mm high, used in the construction of window frames, consistingof layers of wood glued together with the grain running parallel and with slightlyrounded edges‘ under CN subheading 4418 90 10.

Costs

35.

    The costs incurred by the Commission, which has submitted observations to theCourt, are not recoverable. Since these proceedings are, for the parties to the mainproceedings, a step in the proceedings pending before the national court, thedecision on costs is a matter for that court.

On those grounds,

THE COURT (First Chamber),

in answer to the question referred to it by the Finanzgericht München by order of24 June 1998, hereby rules:

Commission Regulation (EC) No 1509/97 of 30 July 1997 concerning theclassification of certain goods in the combined nomenclature is invalid in so faras point 2 of the Annex thereto classifies 'Rectangular wood blocks, 48 or 85 mmwide x 72 mm high, used in the construction of window frames, consisting of layersof wood glued together with the grain running parallel and with slightly roundededges‘ under subheading 4418 90 10 of the combined nomenclature.

SevónJann Wathelet

Delivered in open court in Luxembourg on 28 March 2000.

R. Grass

L. Sevón

Registrar

President of the First Chamber

1: Language of the case: German.