Judgment of the Court (Ninth Chamber) of 7 April 2022

European Union law

3 The Harmonized Commodity Description and Coding System (‘the HS’) was drawn up by the Customs Cooperation Council, now the World Customs Organisation (WCO), established by the International Convention concluded at Brussels on 14 June 1983. That international convention, with its amending protocol of 24 June 1986, was approved on behalf of the European Economic Community by Council Decision 87/369/EEC of 7 April 1987 (OJ 1987 L 198, p. 1). The CN is based on the HS. The CN takes the six-digit headings and subheadings from the HS. Only the seventh and eighth figures create further subheadings which are specific to it.

4 Subsection A, entitled ‘General rules for the interpretation of the CN’, of Section I, entitled ‘General rules’, of Part One of the CN, containing the preliminary provisions, provides:

‘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.

…’

5 Part Two of the CN, entitled ‘Schedule of customs duties’, includes Section II, entitled ‘Vegetable products’, which includes, inter alia, Chapter 13 of the CN, entitled ‘Lac; gums, resins and other vegetable saps and extracts’, Section IV, entitled ‘Prepared foodstuffs; beverages, spirits and vinegar; tobacco and manufactured tobacco substitutes’, which includes, inter alia, Chapter 22 of the CN, entitled ‘Beverages, spirits and vinegar’, and Section VI, entitled ‘Products of the chemical or allied industries’, which includes Chapter 33 of the CN, entitled ‘Essential oils and resinoids; perfumery, cosmetic or toilet preparations’.

6 Chapter 13 of the CN includes the following headings and subheadings:

‘…

1301	Lac; natural gums, resins, gum-resins and oleoresins (for example, balsams):
1301 20 00	– Gum Arabic
1301 90 00	– Other
1302	Vegetable saps and extracts; pectic substances, pectinates and pectates; agar-agar and other mucilages and thickeners, whether or not modified, derived from vegetable products.
	– Vegetable saps and extracts:
…	…
1302 19	– – Other
1302 19 05	– – – Vanilla oleoresin

…’

7 Note 1(ij) to Chapter 13 of the CN states that:

‘Heading 1302 applies, inter alia, to liquorice extract and extract of pyrethrum, extract of hops, extract of aloes and opium.

The heading does not apply to:

…

• Essential oils, concretes, absolutes, resinoids, extracted oleoresins, aqueous distillates or aqueous solutions of essential oils or preparations based on odoriferous substances of a kind used for the manufacture of beverages (Chapter 33)’.

8 Chapter 22 of the CN includes heading 2207, which reads as follows:

‘2207	Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol or higher; ethyl alcohol and other spirits, denatured, of any strength.
2207 10 00	– Undenatured ethyl alcohol of an alcoholic strength by volume of 80% vol or higher
2207 20 00	– Ethyl alcohol and other spirits, denatured, of any strength

…’

9 Chapter 33 of the CN includes the following headings and subheadings:

‘…

3301	Essential oils (terpeneless or not), including concretes and absolutes; resinoids; extracted oleoresins; concentrates of essential oils in fats, in fixed oils, in waxes or the like, obtained by enfleurage or maceration; terpenic by-products of the deterpenation of essential oils; aqueous distillates and aqueous solutions of essential oils.
…	…
3301 30 00	– Resinoids
3301 90	– Other:
3301 90 10	– – Terpenic by-products of the deterpenation of essential oils
	– – Extracted oleoresins:
3301 90 21	– – – Of liquorice and hops
3301 90 30	– – – Other
…	…
3302	Mixtures of odoriferous substances and mixtures (including alcoholic solutions) with a basis of one or more of these substances, of a kind used as raw materials in industry; other preparations based on odoriferous substances, of a kind used for the manufacture of beverages
3302 10	– Of a kind used in the food or drink industries
	– – Of a kind used in the drink industries
	– – – Preparations containing all flavouring agents characterising a beverage
3302 10 10	– – – – Of an actual alcoholic strength by volume exceeding 0,5%
…	…
3302 10 90	– – Of a kind used in the food industries

…’

10 In accordance with Notes 1 and 2 to Chapter 33:

• This chapter does not cover:

  1. Natural oleoresins or vegetable extracts of heading 1301 or 1302;

  …

• The expression “odoriferous substances” in heading 3302 refers only to the substances of heading 3301, to odoriferous constituents isolated from those substances or to synthetic aromatics.

…’

German law

22 Paragraph 130 of the Gesetz über das Branntweinmonopol (Branntweinmonopolgesetz – BranntwMonG) (Law on the monopoly in spirits), of 8 April 1922 (RGBl. 1922 I, p. 335), in the version applicable to the dispute in the main proceedings (‘the BranntwMonG’), states:

‘(1)

Spirits and goods (products) containing spirits are subject to duty on spirits in the tax territory …

(4)

Goods containing spirits within the meaning of subparagraph (1) differ from the alcoholic goods of Chapter 22 of the [CN]; they are manufactured using spirit or contain spirit and their alcohol strength exceeds 1.2% by volume in the case of liquid goods or 1% by mass in the case of non-liquid goods.

…’

23 Under Paragraph 152(1)(5) of the BranntwMonG, in force until 31 December 2017, which transposed Article 27(1)(e) of Directive 92/83 into German law:

‘Products shall be exempt from duty where they are used commercially …

5. undenatured in the manufacture of flavours for flavouring

(a) beverages with an alcohol strength not exceeding 1.2% vol.;

(b) other foodstuffs, except spirits and other alcoholic beverages …’

The first to third questions

40 By its first to third questions, which it is appropriate to examine together, the referring court asks, in essence, whether the CN must be interpreted as meaning that a product consisting of approximately 85% ethanol, 10% water, 4.8% dry residue and having an average vanilla content of 0.5%, which is obtained by diluting in water and ethanol an intermediate product itself extracted from vanilla bean using ethanol, falls under subheading 1302 19 05, subheading 3301 90 30 or subheading 3302 10 90 of that nomenclature.

41 As a preliminary point, it should be noted that, first, heading 1302 in Chapter 13 of the CN covers, inter alia, vegetable extracts, with subheading 1302 19 05 of the CN referring, more specifically, to vanilla oleoresin.

42 Secondly, heading 3301 in Chapter 33 of the CN covers, inter alia, extracted oleoresins, with subheading 3301 90 30 of the CN covering, more specifically, extracted oleoresins other than those of liquorice and hops.

43 Thirdly, Chapter 33 of the CN also incorporates heading 3302, which covers, inter alia, mixtures of odoriferous substances and mixtures, including alcoholic solutions, with a basis of one or more of those substances, of a kind used as raw materials in industry. Subheading 3302 10 90 of the CN covers, inter alia, such mixtures when they are of a kind used in the food industries.

44 Fourthly, it should be noted that, in accordance with General Rule 1 of the CN, classification for the purpose of customs duties is, in principle, to be determined according to the terms of the headings and any relative section or chapter notes.

45 In the light of those preliminary findings, it should be noted, in the first, place that (i) in accordance with Note 1, second paragraph, point (ij) to Chapter 13 of the CN, heading 1302 of that nomenclature does not apply to ‘extracted oleoresins’ covered by heading 3301 of the CN and (ii) that under Note 1(a) to Chapter 33 of the CN, that chapter does not cover ‘vegetable extracts’ falling under heading 1302 of the CN.

46 Therefore, in accordance with the exemption provided for in Note 1, second paragraph, point (ij) to Chapter 13 of the CN, in order for the goods at issue in the main proceedings to fall outside subheading 1302 19 05 of the CN – which, as noted in paragraph 41 of the present judgment, covers vanilla oleoresin but must be regarded as an extracted oleoresin within the meaning of heading 3301 of the CN or as a mixture of odoriferous substances or mixture with a basis of one of those substances within the meaning of heading 3302 of the CN – those goods must not, in any event, comprise a vegetable extract within the meaning of heading 1302 of the CN.

47 However, that is not the case. It would appear that those goods must be regarded as a vegetable extract within the meaning of heading 1302 of the CN and, more specifically, as vanilla oleoresin within the meaning of subheading 1302 19 05 thereof.

48 In that regard, it should be noted that the fact that the Explanatory Notes to the HS state that heading 1302 thereof refers only to vegetable extracts not elsewhere specified or included does not, in itself, preclude goods such as those at issue in the main proceedings from being regarded as a vegetable extract within the meaning of heading 1302 of the CN, on the ground that those goods could fall under more specific headings and, more specifically, headings 3301 and 3302 of the CN.

49 It is not in any way apparent from heading 1302 of the CN or from the notes thereto that that heading is to be regarded as a subsidiary heading, unlike certain CN headings which expressly set out such a characteristic. The Explanatory Notes to the HS are not binding and cannot therefore take precedence over the provisions of the CN or alter their content (see, to that effect, judgment of 3 March 2016, Customs Support Holland , C‑144/15, EU:C:2016:133, paragraphs 28 and 47 ).

50 In any event, it follows from the Explanatory Notes to the HS that, as regards heading 1302 thereof, the more specific headings to which reference is made are those referred to at the end of Part (A) of the note concerned. The list of goods in that list does not mention the goods of headings 3301 or 3302 of the HS.

51 In the second place, it should be noted that, first, although it has been extracted from vanilla bean using ethanol, the intermediate product, referred to in paragraph 24 of the present judgment, may be classified as vanilla oleoresin within the meaning of heading 1302 19 05 of the CN.

52 The first paragraph of Note 1 to Chapter 13 of the CN expressly provides that ‘extract of pyrethrum’ falls under heading 1302 of the CN. According to the Explanatory Notes to the HS, that extract is obtained ‘by extraction with an organic solvent’, like the intermediate product referred to in paragraph 24 above.

53 In addition, heading 1301 of the CN refers, inter alia, to natural oleoresins. By contrast, vanilla oleoresin, within the meaning of CN subheading 1302 19 05, must therefore be regarded as a vegetable extract which is not obtained in a ‘natural’ manner, but by means of a technological extraction process, for instance by means of a solvent.

54 Such an interpretation is further confirmed by the Explanatory Notes to the CN, as regards heading 1302, which state that ‘vegetable extracts of heading 1302 are crude raw vegetable materials obtained by, for instance, solvent extraction’.

55 Secondly, it is true that, as the referring court points out, in order to obtain the goods at issue in the main proceedings, that intermediate product is strongly diluted with ethanol and water. However, it should be noted, first of all, that, as the Explanatory Notes to the CN state as regards heading 1302, a vegetable extract will still fall under that heading even if it undergoes processing related to standardisation.

56 Similarly, the Explanatory Notes to the HS state, as regards heading 1302, that that heading also covers ‘fluid extracts’, namely ‘[generally standardised] solutions of [vegetable] extracts in … alcohol’, to produce commercial grades with a standard vegetable extract content in the product.

57 Moreover, neither the provisions of the CN or the HS nor their explanatory notes set a maximum limit on the quantities of other products which can be used to standardise the vegetable extract in question.

58 It follows that when a vegetable extract is diluted in order to ensure its standardisation, the vegetable extract thus diluted can still fall under heading 1302 of the CN.

59 In the present case, it is apparent from the request for a preliminary ruling that, according to the importer of the goods at issue in the main proceedings, the dilution of the intermediate product with alcohol and water is intended precisely to adjust the vanilla content in those goods to 0.5% and, therefore, to standardise them.

60 In the third place, it should be noted that the Explanatory Notes to the HS state, as regards headings 1302 and 3301 of the HS, that vegetable extracts of heading 1302 differ from extracted oleoresins, within the meaning of heading 3301 of the HS, in that, apart from volatile odoriferous constituents, they contain ordinarily a far higher proportion of other plant substances than the extracted oleoresins of heading 3301 of the HS.

61 That appears to be the case for the goods at issue in the main proceedings, since the proportion of dry residues in vanilla bean is, according to the information provided by the referring court, nine times higher than the proportion of vanilla.

62 In view of the above considerations, the answer to the first to third questions is therefore that the CN must be interpreted as meaning that a product consisting of approximately 85% ethanol, 10% water, 4.8% dry residue and having an average vanilla content of 0.5% and which is obtained by diluting, for the purposes of standardisation, in water and ethanol an intermediate product itself extracted from vanilla bean using ethanol, falls under subheading 1302 19 05 of that nomenclature.

The fourth question

63 By its fourth question, the referring court asks, in essence, whether Article 27(1)(e) of Directive 92/83 must be interpreted as meaning that a vanilla oleoresin of subheading 1302 19 05 of the CN must be regarded as a ‘flavour’ within the meaning of that provision.

64 Article 27 of Directive 92/83 provides that Member States are to exempt the products covered by that directive from the excise duty established by that directive, inter alia, where those products are used for the production of flavours for the preparation of foodstuffs and non-alcoholic beverages with an alcohol strength not exceeding 1.2% vol.

65 As a preliminary point, it must be noted that it follows from the very wording of Article 27 that only products falling within the scope of Directive 92/83 are able to benefit from the exemption under Article 27. By contrast, it is irrelevant that those products comprise goods which do not, as such, fall under the scope of that directive (see, to that effect, judgments of 12 June 2008, Gourmet Classic , C‑458/06, EU:C:2008:338, paragraphs 35 to 37 , and of 9 December 2010, Repertoire Culinaire , C‑163/09, EU:C:2010:752, paragraph 26 ).

66 Among the constituents of the goods at issue in the main proceedings, only ethanol appears to fall within the scope of Directive 92/83, under the first indent of Article 20 of that directive, read in conjunction with heading 2207 of the CN. It follows that only that ingredient may be exempted under Article 27 of that directive, on condition that it is used for the production of flavours for the preparation of foodstuffs and non-alcoholic beverages with an alcohol strength not exceeding 1.2% vol.

67 That being clarified, it should be noted that, since the concept of ‘flavour’ is not defined in either Directive 92/83 or in the CN, its meaning and scope must be determined in accordance with the usual meaning of that notion in everyday language, while also taking into account the context in which it occurs and the purposes of the rules of which it is part (see, to that effect, judgment of 3 September 2014, Deckmyn and Vrijheidsfonds , C‑201/13, EU:C:2014:2132, paragraph 19 , and the case-law cited).

68 In its usual meaning, the concept of ‘flavour’ refers to an ingredient which brings a specific taste or smell to a particular product. Such an interpretation is not, moreover, contradicted by the general scheme or objectives of Directive 92/83.

69 It follows that, in so far as it fulfils such a definition, which it is for the referring court to ascertain, a vanilla oleoresin must be regarded as a ‘flavour’ within the meaning of Article 27 of that directive, and that no excise duty may be levied on the ethanol which it contains when such a flavour is used for the preparation of foodstuffs or non-alcoholic beverages with an alcoholic strength not exceeding 1.2% vol.

70 That interpretation cannot be called into question by the guidelines adopted by the Commission’s Committee on Excise Duties, which were mentioned by the referring court.

71 Even if those guidelines had intended to exclude vanilla oleoresins from the concept of ‘flavour’, within the meaning of Article 27 of Directive 92/83, the fact remains that the powers of that committee, as laid down on the date on which such guidelines were adopted, in Article 24(2) and (4) of Directive 92/12, were limited to the adoption of measures concerning the application of provisions of EU law on excise duties, without allowing that committee to amend those provisions or, consequently, to authorise it to restrict the scope of the concept of ‘flavour’ within the meaning of Article 27.

72 Nor do the powers of the Commission’s Committee on Excise Duties, as now defined in Articles 43 and 44 of Directive 2008/118, which repealed Directive 92/83, permit it to restrict the scope of such a concept.

73 It follows from all the foregoing considerations that Article 27(1)(e) of Directive 92/83 must be interpreted as meaning that a vanilla oleoresin falling under subheading 1302 19 05 of the CN must be regarded as a ‘flavour’ within the meaning of that provision, provided that it constitutes an ingredient which brings a specific taste or smell to a particular product.