Court of Justice 26-05-1977 ECLI:EU:C:1977:95

I — Facts and written procedure

1. On 22 January 1974 the firm Klöckner-Ferromatik GmbH, the plaintiff in the main action, requested a binding customs tariff notification for the import of an article described as a ‘Ferromatik-Schildausbau’ (ferromatic shield assembly), which is intended to render the mine face safe in mining and consists of a floor-member, a flushing shield, a back shield, a roof-canopy and a guidance wedge. Controlled by means of a hydraulic device, which was not imported at the same time, the whole device is progressively shifted forwards. In its notification of 16 July 1974 the Oberfinanzdirektion (Regional Finance Office) classified the article under subheading 84.59 E of the Common Customs Tariff. The tariff heading is worded as follows:

‘Machines and mechanical appliances, having individual functions, not falling within any other heading of this Chapter:

A …

B …

C …

D …

E Other.’

On 1 August 1974 the Klöckner undertaking lodged an objection with the Oberfinanzdirektion München against this notification. It requested that the goods in question should be classified under heading 73.21 of the Common Customs Tariff, the wording of which is as follows:

‘Structures and parts of structures (for example, hangars and other buildings, bridges and bridge-sections, lock-gates, towers, lattice masts, roofs, roofing frameworks, door and window frames, shutters, balustrades, pillars and columns), of iron or steel; plates, strip, rods, angles, shapes, sections, tubes and the like, prepared for use in structures, of iron or steel.’

Since the objection was rejected the undertaking brought an action on 10 February 1975 before the Bundesfinanzhof which by order dated 26 October 1976 stayed the proceedings and referred the following questions to the Court of Justice of the European Communities for a preliminary ruling under the first and third paragraphs of Article 177 of the EEC Treaty:

1. Is the term structure in tariff heading 73.21 of the Common Customs Tariff to be interpreted so as to include also an article which is intended to render the mine face safe in mining and inter alia is equipped in such a way that it and mining machinery placed on a part of it can be moved forward step by step by means of incorporated hydraulic cylinders and a motorized pump unit which is separately installed?

2. If Question 1 is answered in the negative: does tariff heading 84.23 of the Common Customs Tariff include only such machinery and appliances for mining as are intended to work the earth directly?

The Bundesfinanzhof has summarized the submissions of the parties to the main action.

The Oberfinanzdirektion, the defendant in the main action, stated that the tariff classification was not affected by the fact that the article was presented for customs clearance without the hydraulic device necessary for its operation. It agreed that the conventional support of mine tunnels by means of hydraulic pit-props is classified under tariff heading 73.21, but the article to be classified was not just a further development of such an appliance because it fulfils its purpose by its mobility and its ability to advance from place to place in the course of use, whilst goods coming under tariff heading 73.21 (including so-called ‘moving bridges) are stationary constructions. The classification made was therefore the only possible one.

In the view of Klöckner, the plaintiff in the main action, all props, stays and similar equipment for the lining of tunnels, shafts and mines, no matter whether they are telescopic or adjustable, hydraulic or non-hydraulic, come under tariff heading 73.21. The characteristics of the shield assembly in comparison with normal powered supports do not justify a different classification; the manner of functioning is the same in both cases and the element of movement cannot be decisive, as the classification of so-called moving bridges shows. It argued that classification under Chapter 84 is justified only if a more precise classification (in the present case under heading 73.21) is not possible. Classification under heading 73.21 is supported by the classification of the German patent for the goods in question, since for the purposes of patent law the latter falls within the concept “face support”.

Having regard to this statement of the views of the parties to the main action the Bundesfinanzhof has stated that the decision in the case is dependent on the interpretation of the Common Customs Tariff in force at the time of import, which is based on Regulation No 950/68. For the tariff classification of the goods regard should be had not only to the tariff headings mentioned by the parties but also to heading 84.23 (boring and extracting machinery, … for earth, minerals and ores) and, especially, to Note 1 (f) to Section XV; according to the latter, articles falling within Section XVI are not covered by Section XV, which means that machinery or mechanical appliances within the meaning of Section XVI cannot fall under tariff heading 73.21, which is in Section XV. The Bundesfinanzhof doubts whether the article in question is a machine because it does not transform matter and it transports matter at most as a sort of side effect. It may therefore be asked whether the article may be regarded as a mechanical appliance. This concept, however, which can scarcely be exactly defined and which must be understood to include any equipment in which a certain purposeful movement occurs would cover not only the “Ferromatik-Schildausbau” but also hydraulic pit-props which, according to the Tariff Decision of the Committee on Common Custom Tariff Nomenclature of 9 June 1972, fall under tariff heading 73.21. From this it may be concluded that the fact that a certain process of movement occurs in an article is not sufficient as a criterion for delineation between Section XV and Section XVI.

A characteristic of a “structure” is the stationary element, whereas the characteristic of machinery or mechanical appliances is the element of movement. Both elements are contained in the article at issue. Clearly, the stationary element is preponderant as the actual use of the article is to support the area of the face of a working against the caving-in of the earth, which purpose is traditionally fulfilled by “structures” within the meaning of tariff heading 73.21. The element of movement is contained in the hydraulic cylinders with which the article is equipped and the fact that, with the aid of separately installed hydraulic equipment, the machine can move forward step by step and can thus transport mining machinery situated on the under-frame. The question of which element is decisive in this case involves the interpretation of provisions of the Common Customs Tariff.

If the article at issue is to be regarded as machinery or a mechanical appliance it must, in the Bundesfinanzhof's view, be considered whether it is machinery for mining, in which case it falls within the wording of tariff heading 84.23; according to the Explanatory Notes to the Brussels Nomenclature, however, that subheading covers only mechanical appliances “for attacking the earth's crust” or “for preparing or compacting the terrain”; in that case there only remains the catch-all heading 84.59 E.

The order of the Bundesfinanzhof was registered at the Court on 22 November 1976.

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities written observations were submitted by the Commission of the European Communities.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate-General the Court decided to open the oral procedure without any preparatory inquiry and referred the case to the Second Chamber.

II — Summary of the observations submitted pursuant to Article 20 of the Statute of the Court

First, the Commission summarizes the proceedings and describes in detail the article at issue, stressing the element of “self propulsion” and emphasizing the fact that, compared with the classical system for the protection of mine workings, the article represents an improvement; the Commission then states that the objective of the question is to give the court making the reference the Community criteria which are to be derived from the wording of the Common Customs Tariff, as clarified by the interpretative Notes thereto, by the tariff decisions in specific cases and by the Explanatory Notes to the Brussels Nomenclature.

Three tariff headings are relevant, namely headings 73.21, 84.23 and 84.59. On the basis of Notes 1 (f) to Section XV it is first to be considered whether the article at issue is to be viewed as a “structure” or as “machinery or mechanical appliances”. The characteristic of “machinery” is movement, whereas the characteristic of a “structure” is the stationary element. The Common Customs Tariff reflects this essential difference, for Chapter 73 includes articles according to their material composition whereas Chapter 84 has regard to the use for which the machinery is intended. In the Explanatory Notes to the Brussels Nomenclature (Note B of the Explanatory Notes to Chapter XVI) it is made clear that in classifying machinery no regard should be paid to the material from which it is made.

In brief, therefore, it may be said that the terms “machinery” and “mechanical” appliances’ cover technical objects the functional characteristic of which is a more or less constant process of mechanical activity (movement) and that machinery is of a more complicated nature than mechanical appliances. On the other hand, the characteristic of ‘structures’ within the meaning of tariff heading 73.21 is that, once placed in position, they remain, in principle, permanently stationary.

The Explanatory Notes to the Brussels Tariff Nomenclature show that the mobility of parts which serve to facilitate the erection of a structure do not change the stationary nature of the structure and its components after erection. In the same way, it may be inferred from the Tariff Decision of the Committee on Common Custom Tariff Nomenclature of 9 June 1972 that a mechanical element which is of a subsidiary nature cannot be decisive in altering the character of a ‘device’.

In the present case the shield assembly, in view of its particular use (including the transport and incorporation of the winning machine), is characterized by its mechanical mobility, which is both autonomous and permanent. It is no longer a simple support device, even though the appliance still fulfils that purpose and even though it contains a hydraulic device similar to certain more conventional pit-props which come under tariff heading 73.21. The comparison with moving bridges which likewise fall under that heading does not carry the matter any further because the stationary character of such bridges is predominant. Finally, the Common Customs Tariff may not be interpreted on the basis of the patent law of the individual States.

With regard to the second question referred for a preliminary ruling the Commission notes that the court making the reference sees a contradiction here between the wording of tariff heading 84.23 (which does not expressly limit itself to machinery ‘for “attacking” the earth's crust’) and the notes to heading 84.23 contained in the Explanatory Notes to the Brussels Nomenclature, according to which the articles must be ‘for “attacking” the earth's crust (e.g.: for cutting and breaking down rock, coal, earth …) or for preparing or compacting the terrain’.

This conflict can be resolved by having regard to all the articles listed in tariff heading 84.23 and to the different language versions of that heading; from this it is apparent that only machinery which is intended to work the earth directly falls under that heading. Accordingly, it must be determined whether, if the shield assembly is joined to the winning machines by an under-frame supporting a conveyor, it may or may not be classified under tariff heading 84.23. This conclusion gains weight if it is borne in mind that the shield assembly (which is made specifically for this purpose) is only a part of the whole winning machinery. Note E of the Explanatory Notes to the Brussels Nomenclature to tariff heading 84.23 shows that machinery which combines the functions of support and extraction can be classified under that heading. If the shield assembly is not, however, directly attached to the winning machines then classification under subheading 84.59 E alone is possible.

In view of all the above the Commission proposes that the questions for a preliminary ruling should be answered as follows:

1. The term ‘structure’ in heading 73.21 of the Common Customs Tariff, in conjunction with Note 1 (f) to Section XV of the Common Customs Tariff, precludes the classification under the said tariff heading of articles which, although intended to render the mine face safe in mining, are nevertheless, by reason of their complex mechanical nature and their consequent ability to advance independently by means of an external motor system, machines or mechanical appliances within the meaning of Section XVI of the Common Customs Tariff.

2. If such machines are directly attached to mining machinery for attacking the earth's crust they fall under tariff heading 84.23 of the Common Customs Tariff. If this is not the case, they are to be classified under subheading 84.59 E of the Common Customs Tariff.

III — Oral procedure

At the hearing on 29 March 1977 the Klöckner-Ferromatik undertaking was represented by Siegfried Geissler, Rechtsanwalt, of Duisburg, and the Commission by Jean Amphoux and Manfred Beschel.

The plaintiff in the main action described the device at issue and in doing so stressed in particular that on average it moves forward daily only some six metres in consecutive stretches of 70 cm, which it takes 15 seconds to cover every two hours; such movement could be compared to that of a moving bridge, since the mobility in both cases is secondary; moreover, the support function continues even when the winning machine is removed.

The plaintiff in the main action proposed that the Bundesfinanzhof should be given the reply, first, that the term ‘structure’ in tariff heading 73.21 of the Common Customs Tariff, in conjunction with Note 1 (f) to Section XV of the Common Customs Tariff, permits the classification under the said tariff heading of articles which are mainly intended to render the mine face safe in mining, but which nevertheless, because of various hydraulic parts, are capable of moving forward independently by means of an external motor system; if such articles are nevertheless directly attached to winning machines they fall under heading 84.23 of the Common Customs Tariff.

The Commission observed that the difficulty arises from the fact that technology is continually progressing, whereas the Customs Tariff and its headings remain unchanged. In the present case the relevant criteria for making a distinction between the tariff headings in question lies in the stationary character of structures and the mobility of machines. The complexity of the device to be classified is due precisely to its characteristic mobility; the speed of movement is not relevant. Moreover, the individual parts of a whole cannot be examined separately since the purpose for which the movable whole is intended depends on the concertation of the individual parts.

With regard to the second question the Commission's view is that the wording of tariff heading 84.23 in the German version should be read in the light of the versions in the other languages and in particular the versions in English, French, Italian and Dutch, from which it becomes clear that that heading concerns only those machines which work directly upon the earth's crust.

The Advocate-General delivered his opinion at the hearing on 5 May 1977.