1BY ORDER OF 25 AUGUST 1977 , RECEIVED AT THE COURT ON 14 SEPTEMBER 1977 , THE FINANZGERICHT HAMBURG REFERRED TO THE COURT OF JUSTICE TWO QUESTIONS ON THE INTERPRETATION OF CERTAIN HEADINGS OF THE COMMON CUSTOMS TARIFF , THAT IS , TARIFF HEADINGS 78.01 A ( UNWROUGHT LEAD ), 78.01 B ( LEAD WASTE AND SCRAP ) AND , AS A SUBSIDIARY , HEADING 78.02 ( WROUGHT BARS , RODS , ANGLES , SHAPES AND SECTIONS , OF LEAD ; LEAD WIRE ).
2IT FOLLOWS FROM THE FILE THAT THE MAIN ACTION CONCERNS THE CLASSIFICATION FOR CUSTOMS PURPOSES OF TWO CONSIGNMENTS OF PRINTING LEAD IMPORTED BY THE PLAINTIFF IN THE MAIN ACTION , ONE IN THE FORM OF BARS FOR TYPE-CASTING MACHINES OBTAINED BY THE MELTING OF USED TYPE AND THE OTHER CONSISTING IN BARS FOR TYPE-CASTING MACHINES COMPOSED OF MATERIAL READY FOR USE BUT WHICH HAD BECOME UNUSABLE AS THE RESULT OF BREAKAGE . THE TWO CONSIGNMENTS WERE CLASSIFIED BY THE CUSTOMS OFFICE UNDER TARIFF HEADING 78.01 A II OF THE COMMON CUSTOMS TARIFF AS ' ' UNWROUGHT LEAD ' ' . THE PLAINTIFF IN THE MAIN ACTION LODGED A COMPLAINT AGAINST THAT CLASSIFICATION AND REQUESTED THAT THE GOODS SHOULD BE CLASSIFIED UNDER TARIFF SUBHEADING 78.01 B , WHICH WAS FREE OF DUTY , AS ' ' LEAD WASTE AND SCRAP ' ' . THAT OBJECTION WAS DISMISSED BY THE PRINCIPAL CUSTOMS OFFICE AND THE APPLICANT THEN LODGED AN APPLICATION BEFORE THE FINANZGERICHT HAMBURG . IN ORDER TO SETTLE THAT DISPUTE THE COURT REFERRED TO THE COURT OF JUSTICE TWO QUESTIONS AIMED AT OBTAINING A PRECISE DEFINITION OF THE CONCEPTS OF ' ' UNWROUGHT LEAD ' ' AND ' ' LEAD WASTE AND SCRAP ' ' SO AS TO DRAW THE DIVIDING LINE BETWEEN SUBHEADINGS A AND B OF TARIFF HEADING 78.01 AND TO DELIMIT THE LATTER IN RELATION TO HEADING 78.02 .
3THE HEADINGS IN QUESTION ARE WORDED AS FOLLOWS :
78.01 UNWROUGHT LEAD ( INCLUDING ARGENTIFEROUS LEAD ); LEAD WASTE AND SCRAP :
A . UNWROUGHT : . . .
II . OTHER
B . WASTE AND SCRAP
78.02 WROUGHT BARS , RODS , ANGLES , SHAPES AND SECTION , OF LEAD ; LEAD WIRE .
4THE FIRST QUESTION ASKS WHETHER TARIFF HEADING 78.01 A ALSO INCLUDES MELTED DOWN LEAD SCRAP IN THE FORM OF UNUSABLE BARS FOR TYPE-CASTING MACHINES .
5ACCORDING TO THE WORDING OF THE NOTES ENTITLED ' ' GENERAL ' ' ON SECTION XV OF THE COMMON CUSTOMS TARIFF IN THE EXPLANATORY NOTES TO THE BRUSSELS NOMENCLATURE ( HEREINAFTER REFERRED TO AS ' ' THE EXPLANATORY NOTES ' ' ), EACH OF THE CHAPTERS 73 TO 81 COVERS PARTICULAR UNWROUGHT BASE METALS AND SEMI- MANUFACTURES OF THOSE METALS AND , IN GENERAL , ARTICLES THEREOF . THIS IS IN FACT THE STRUCTURE OF CHAPTER 78 ON LEAD AND WITHIN THAT FRAMEWORK TARIFF HEADING 78.01 A COVERS THE UNWROUGHT METAL WHILE TARIFF HEADINGS 78.02 TO 78.06 CONCERN SEMI-MANUFACTURES OF LEAD IN DIFFERENT FORMS AND VARIOUS DEGREES OF TREATMENT . ACCORDING TO THE NOTES ENTITLED ' ' GENERAL ' ' PRECEDING CHAPTER 78 IN THE EXPLANATORY NOTES AND TO THE FIRST NOTE DEVOTED SPECIFICALLY TO TARIFF HEADING 78.01 , IT APPEARS THAT TARIFF SUBHEADING 78.01 A COVERS UNWROUGHT LEAD AT ITS DIFFERENT DEGREES OF PURITY SO THAT THE PRESENCE OF IMPURITIES OR EXTRANEOUS SUBSTANCES IN THE METAL CANNOT AFFECT ITS CLASSIFICATION FOR CUSTOMS PURPOSES . IT FOLLOWS FROM A COMPARISON OF TARIFF HEADING 78.01 A AND THE OTHER TARIFF HEADINGS IN THE SAME CHAPTER AND FROM THE EXPLANATORY NOTES THAT UNWROUGHT LEAD COMING WITHIN TARIFF SUBHEADING 78.01 A GENERALLY TAKES THE FORM OF BLOCKS , INGOTS OR PIGS WHILST TARIFF HEADINGS 78.02 TO 78.06 CONCERN LEAD WHICH HAS , IN ADDITION TO CASTING , BEEN WORKED TO A GREATER OR LESSER DEGREE .
6THE EXPRESSION ' ' WASTE AND SCRAP ' ' , ACCORDING TO NOTE 6 PRECEDING SECTION XV IN THE COMMON CUSTOMS TARIFF ITSELF , RELATES IN PARTICULAR TO ' ' WASTE AND SCRAP METAL FIT ONLY FOR THE RECOVERY OF METAL ' ' . ACCORDING TO THE COMMENTARY CONTAINED IN THE EXPLANATORY NOTES ON TARIFF HEADING 73.03 , THE PROVISIONS OF WHICH ARE DECLARED TO BE APPLICABLE MUTATIS MUTANDIS TO LEAD SCRAP AND WASTE BY NOTE 2 TO TARIFF HEADING 78.01 , ' ' THE PROCESS GENERALLY USED FOR THE RECOVERY OF METAL IS RE-MELTING ' ' . THE SAME IDEA BECOMES APPARENT FROM THE NOTES ENTITLED ' ' GENERAL ' ' IN THE EXPLANATORY NOTES TO CHAPTER 78 WHICH INDICATE THAT LEAD IS OBTAINED EITHER BY EXTRACTION FROM ORE OR ' ' BY RE-MELTING LEAD WASTE AND SCRAP ' ' . IT THUS APPEARS THAT IT IS IN FACT THE RE-MELTING OF THE LEAD WASTE OR SCRAP WHICH MARKS THE BEGINNING OF THE RECOVERY CYCLE OF THE METAL . IT IS APPROPRIATE TO OBSERVE IN THIS CONNEXION THAT THE RE-MELTED METAL MUST BE CLASSIFIED UNDER TARIFF HEADING 78.01 A EVEN IF IT STILL CONTAINS IMPURITIES CHARACTERISTIC OF PREVIOUS USE , BECAUSE THE PRESENCE OF IMPURITIES DOES NOT HAVE THE EFFECT OF PREVENTING A PRODUCT FROM BEING CLASSIFIED AS UNWROUGHT LEAD , AS HAS BEEN STATED ABOVE .
7IT FOLLOWS THAT THE EXEMPTION FROM THE CUSTOMS TARIFF PROVIDED FOR IN RESPECT OF PRODUCTS COMING WITHIN SUBHEADING 78.01 B MAY ONLY BE CLAIMED PROVIDED THAT THE IMPORTER SUBMITS HIS GOODS FOR CUSTOMS INSPECTION IN A FORM WHICH ENABLES IT TO BE RECOGNIZED ON VISUAL INSPECTION THAT THEY ARE IN FACT WASTE OR SCRAP . THIS SOLUTION IS NOT ONLY IN ACCORDANCE WITH THE REQUIREMENT OF SIMPLICITY OF INSPECTION , BECAUSE IT AVOIDS METALLOGRAPHIC ANALYSES , BUT ALSO SERVES TO PREVENT THE RISK OF FRAUDS CONSISTING IN IMPORTING DUTY-FREE , BY MEANS OF THE EXEMPTION LAID DOWN FOR WASTE AND SCRAP , METAL WHICH HAS BEEN REFINED TO A GREATER OR LESSER DEGREE WHEN IT WAS RE-MELTED .
8IT IS THEREFORE NECESSARY TO REPLY TO THE FIRST QUESTION THAT TARIFF HEADING 78.01 A ALSO INCLUDES MELTED DOWN LEAD SCRAP IN THE FORM OF BARS FOR TYPE- CASTING MACHINES EVEN IF THEY ARE UNUSABLE AS SUCH .
9THE SECOND QUESTION ASKS WHETHER TARIFF HEADING 78.01 A ALSO INCLUDES BROKEN BARS FOR TYPE-CASTING MACHINES OR WHETHER THEY MUST PERHAPS BE CLASSIFIED UNDER TARIFF SUBHEADING 78.01 B OR HEADING 78.02 .
10AS EXPLAINED ABOVE , TARIFF HEADING 78.02 - WROUGHT BARS , RODS , ANGLES , SHAPES AND SECTIONS , OF LEAD ; LEAD WIRE - COVERS SEMI-MANUFACTURES CHARACTERIZED BY THE FACT THAT THEY HAVE BEEN WORKED TO A GREATER OR LESSER DEGREE . IT FOLLOWS FROM NOTE 1 ( B ) PRECEDING CHAPTER 78 OF THE COMMON CUSTOMS TARIFF THAT WHAT IS INVOLVED IN THE PRESENT CASE ARE ROLLED , EXTRUDED , DRAWN OR FORGED PRODUCTS SINCE ONLY CAST OR SINTERED PRODUCTS WHICH HAVE BEEN SUBSEQUENTLY MACHINED ( OTHERWISE THAN BY SIMPLE TRIMMING OR DE-SCALING ) MAY BE CLASSIFIED UNDER THAT HEADING . IN VIEW OF THE DATA GIVEN IN THE ORDER FOR REFERENCE AND SUBJECT TO THE APPRAISAL OF THE FACTS BY THE AUTHORITIES COMPETENT TO CARRY OUT THE CLASSIFICATION FOR CUSTOMS PURPOSES IT APPEARS THAT TARIFF HEADING 78.02 MAY NOT BE INTERPRETED AS INCLUDING BARS FOR TYPE-CASTING MACHINES INASMUCH AS THEY ARE PRODUCTS WHICH HAVE SIMPLY BEEN CAST . IN THESE CIRCUMSTANCES IT IS IMPOSSIBLE TO CONSIDER BROKEN BARS FOR TYPE-CASTING MACHINES AS ' ' WASTE AND SCRAP ' ' IN ACCORDANCE WITH THE WORDING OF THE EXPLANATORY NOTES TO HEADING 73.03 , WHICH IS STILL APPLICABLE MUTATIS MUTANDIS TO LEAD , WHICH DEFINE WASTE AND SCRAP AS RESIDUES FROM THE MECHANICAL WORKING OF METAL ( IN PARTICULAR IN THE TYPICAL FORM OF CROP ENDS , FILINGS AND TURNINGS ) OR MATERIAL RECOGNIZABLE AS UNUSABLE , WORN-OUT OR BROKEN ARTICLES OF METAL . A PRODUCT RESULTING FROM THE BREAKAGE OF BARS FOR TYPE-CASTING MACHINES , WHICH MAY THEMSELVES BE CLASSIFIED AS UNWROUGHT LEAD WHEN THEY HAVE NOT BEEN WORKED AFTER CASTING , CANNOT THEREFORE BE CLASSIFIED AS WASTE OR SCRAP WITHIN THE MEANING OF TARIFF SUBHEADING 78.01 B .
11IT IS THEREFORE NECESSARY TO REPLY TO THE SECOND QUESTION THAT , SUBJECT TO THE APPRAISAL OF THE QUESTIONS OF FACT DETERMINING THE ORIGINAL CLASSIFICATION OF THE GOODS IN QUESTION , TARIFF HEADING 78.01 A ALSO INCLUDES BROKEN BARS FOR TYPE-CASTING MACHINES .
COSTS
12THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE . SINCE THE PROCEEDINGS ARE , SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , A STEP IN THE ACTION PENDING BEFORE THE FINANZGERICHT HAMBURG , THE DECISION ON COSTS IS A MATTER FOR THAT COURT .
ON THOSE GROUNDS ,
THE COURT ( SECOND CHAMBER )
IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE FINANZGERICHT HAMBURG BY ORDER OF 25 AUGUST 1977 , HEREBY RULES :
1 . TARIFF HEADING 78.01 A OF THE COMMON CUSTOMS TARIFF ALSO INCLUDES MELTED-DOWN LEAD SCRAP IN THE FORM OF BARS FOR TYPE-CASTING MACHINES EVEN IF THEY ARE UNUSABLE AS SUCH .
2 . SUBJECT TO THE APPRAISAL OF THE QUESTIONS OF FACT DETERMINING THE ORIGINAL CLASSIFICATION OF THE GOODS IN QUESTION , TARIFF HEADING 78.01 A OF THE COMMON CUSTOMS TARIFF ALSO INCLUDES BROKEN BARS FOR TYPE- CASTING MACHINES .
