(Reference for a preliminary ruling from the Hoge Raad der Nederlanden)

(Combined Nomenclature – Tariff headings 2206 and 2208 – Fermented beverage containing distilled alcohol – Beverage produced from fruit or from a natural product – Addition of substances – Effects – Loss of the taste, smell and appearance of the original beverage)

Summary of the Judgment

Common Customs Tariff – Tariff headings – Fermented beverages containing distilled alcohol, produced from fruit or from a natural product, to which various substances have been added

(Council Regulation No 2658/87, Annex I, headings 2206 and 2208; Commission Regulation No 2587/91)

Fermented alcohol-based beverages corresponding originally to heading 2206 of the Combined Nomenclature in Annex I to Regulation No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff, as amended by Regulation No 2587/91, to which a certain proportion of distilled alcohol, water, sugar syrup, aromas, colourings and, in some cases, a cream base have been added, resulting in the loss of the taste, smell and/or appearance of a beverage produced from a particular fruit or natural product, do not come under heading 2206 of the Combined Nomenclature but rather under heading 2208 thereof, given, first of all, their essential objective characteristics and properties, in particular their distilled alcohol content; second, their organoleptic characteristics; and, lastly, their intended use as spirituous beverages.

(see paras 35-40, operative part)

7 May 2009 (*)

(Combined Nomenclature – Tariff headings 2206 and 2208 – Fermented beverage containing distilled alcohol – Beverage produced from fruit or from a natural product – Addition of substances – Effects – Loss of the taste, smell and appearance of the original beverage)

In Case C‑150/08,

REFERENCE for a preliminary ruling under Article 234 EC from the Hoge Raad der Nederlanden (Netherlands), made by decision of 21 March 2008, received at the Court on 14 April 2008, in the proceedings

Staatssecretaris van Financiën,

THE COURT (Third Chamber),

composed of A. Rosas, President of the Chamber, A. Ó Caoimh, J.N. Cunha Rodrigues, J. Klučka (Rapporteur) and A. Arabadjiev, Judges,

Advocate General: J. Kokott,

Registrar: R. Şereş, Administrator,

having regard to the written procedure and further to the hearing on 4 March 2009,

after considering the observations submitted on behalf of:

– Siebrand BV, by G.J. Slooten, advocaat,

– the Netherlands Government, by C.M. Wissels and M. Noort, acting as Agents,

– the Greek Government, by I. Bakopoulos, O. Patsopoulou and M. Tassopoulou, acting as Agents,

– the United Kingdom Government, by V. Jackson, acting as Agent, assisted by K. Beal, Barrister,

– the Commission of the European Communities, by A. Sipos and W. Roels, acting as Agents,

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

gives the following

This reference for a preliminary ruling concerns the interpretation of the Combined Nomenclature (‘CN’) 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 Commission Regulation (EEC) No 2587/91 of 26 July 1991 (OJ 1991 L 259, p. 1; ‘Regulation No 2658/87’).

The reference has been made in the course of proceedings between Siebrand B.V., a company established in Kampen (Netherlands) (‘Siebrand’) and the Staatssecretaris van Financiën (State Secretary for Finance) relating to eight notices of additional assessment to excise duty on three alcoholic beverages produced by Siebrand, in respect of the period between July 2003 and February 2004.

Legal context

European Union law

Directive 2011/92

Recitals 7 to 9 of Directive 2011/92 state:

‘(7) Development consent for public and private projects which are likely to have significant effects on the environment should be granted only after an assessment of the likely significant environmental effects of those projects has been carried out. …

(8) Projects belonging to certain types have significant effects on the environment and those projects should, as a rule, be subject to a systematic assessment.

(9) Projects of other types may not have significant effects on the environment in every case and those projects should be assessed where the Member States consider that they are likely to have significant effects on the environment.’

Article 2(1) of that directive provides:

‘Member States shall adopt all measures necessary to ensure that, before development consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to a requirement for development consent and an assessment with regard to their effects on the environment. Those projects are defined in Article 4.’

Under Article 3(1) of that directive:

‘The environmental impact assessment shall identify, describe and assess in an appropriate manner, in the light of each individual case, the direct and indirect significant effects of a project on the following factors:

…

(b) biodiversity, with particular attention to species and habitats protected under [Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ 1992 L 206, p. 7), as amended by Council Directive 2013/17/EU of 13 May 2013 (OJ 2013 L 158, p. 193) (“Directive 92/43”)] and Directive 2009/147/EC [of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds (OJ 2010 L 20, p. 7)];

…’

Article 4 of Directive 2011/92 provides:

‘1. Subject to Article 2(4), projects listed in Annex I shall be made subject to an assessment in accordance with Articles 5 to 10.

(a) a case-by-case examination;

(b) thresholds or criteria set by the Member State.

Member States may decide to apply both procedures referred to in points (a) and (b).

Where a case-by-case examination is carried out or thresholds or criteria are set for the purpose of paragraph 2, the relevant selection criteria set out in Annex III shall be taken into account. Member States may set thresholds or criteria to determine when projects need not undergo either the determination under paragraphs 4 and 5 or an environmental impact assessment, and/or thresholds or criteria to determine when projects shall in any case be made subject to an environmental impact assessment without undergoing a determination set out under paragraphs 4 and 5.

Where Member States decide to require a determination for projects listed in Annex II, the developer shall provide information on the characteristics of the project and its likely significant effects on the environment. The detailed list of information to be provided is specified in Annex IIA. The developer shall take into account, where relevant, the available results of other relevant assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The developer may also provide a description of any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

The competent authority shall make its determination, on the basis of the information provided by the developer in accordance with paragraph 4 taking into account, where relevant, the results of preliminary verifications or assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The determination shall made available to the public and:

(a) where it is decided that an environmental impact assessment is required, state the main reasons for requiring such assessment with reference to the relevant criteria listed in Annex III; or

(b) where it is decided that an environmental impact assessment is not required, state the main reasons for not requiring such assessment with reference to the relevant criteria listed in Annex III, and, where proposed by the developer, state any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

Member States shall ensure that the competent authority makes its determination as soon as possible and within a period of time not exceeding 90 days from the date on which the developer has submitted all the information required pursuant to paragraph 4. In exceptional cases, for instance relating to the nature, complexity, location or size of the project, the competent authority may extend that deadline to make its determination; in that event, the competent authority shall inform the developer in writing of the reasons justifying the extension and of the date when its determination is expected.’

Annex II.A of that directive contains the list of ‘information to be provided by the developer on the projects listed in Annex II’. That list reads as follows:

‘1. A description of the project, including in particular:

(a) a description of the physical characteristics of the whole project and, where relevant, of demolition works;

(b) a description of the location of the project, with particular regard to the environmental sensitivity of geographical areas likely to be affected.

3. A description of any likely significant effects, to the extent of the information available on such effects, of the project on the environment resulting from:

(a) the expected residues and emissions and the production of waste, where relevant;

(b) the use of natural resources, in particular soil, land, water and biodiversity.

4. The criteria of Annex III shall be taken into account, where relevant, when compiling the information in accordance with points 1 to 3.’

Annex III to that directive sets out the ‘criteria to determine whether the projects listed in Annex II should be subject to an environmental impact assessment’.

Directive 2014/52

Recitals 11 and 29 of Directive 2014/52 state:

‘(11) The measures taken to avoid, prevent, reduce and, if possible, offset significant adverse effects on the environment, in particular on species and habitats protected under [Directive 92/43] and Directive 2009/147 …, should contribute to avoiding any deterioration in the quality of the environment and any net loss of biodiversity, in accordance with the [European] Union’s commitments in the context of the [United Nations Convention on Biological Diversity, signed in Rio de Janeiro on 5 June 1992,] and the objectives and actions of the Union Biodiversity Strategy up to 2020 laid down in the [Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions] of 3 May 2011 entitled ‘Our life insurance, our natural capital: an EU biodiversity strategy to 2020’ [(COM(2011) 244 final)]

…

(29) When determining whether significant effects on the environment are likely to be caused by a project, the competent authorities should identify the most relevant criteria to be considered and should take into account information that could be available following other assessments required by Union legislation in order to apply the screening procedure effectively and transparently. In this regard, it is appropriate to specify the content of the screening determination, in particular where no environmental impact assessment is required. Moreover, taking into account unsolicited comments that might have been received from other sources, such as members of the public or public authorities, even though no formal consultation is required at the screening stage, constitutes good administrative practice.’

Directive 92/43

Article 6(3) of Directive 92/43 provides:

‘Any plan or project not directly connected with or necessary to the management of the site but likely to have a significant effect thereon, either individually or in combination with other plans or projects, shall be subject to appropriate assessment of its implications for the site in view of the site’s conservation objectives. In the light of the conclusions of the assessment of the implications for the site and subject to the provisions of paragraph 4, the competent national authorities shall agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public.’

Article 12(1) of that directive provides:

‘Member States shall take the requisite measures to establish a system of strict protection for the animal species listed in Annex IV(a) in their natural range, prohibiting:

(a) all forms of deliberate capture or killing of specimens of these species in the wild;

(b) deliberate disturbance of these species, particularly during the period of breeding, rearing, hibernation and migration;

(c) deliberate destruction or taking of eggs from the wild;

(d) deterioration or destruction of breeding sites or resting places.’

Point (a) of Annex IV to that directive mentions ‘all species’ of bats belonging to the suborder of ‘microchiroptera’.

Irish law

The HS explanatory note relating to heading 2208 states:

‘The heading covers, whatever their alcoholic strength:

(A)Spirits produced by distilling wine, cider or other fermented beverages or fermented grain or other vegetable products, without adding flavouring; they retain, wholly or partly, the secondary constituents (esters, aldehydes, acids, higher alcohols, etc.) which give the spirits their peculiar individual flavours and aromas.

(B)Liqueurs and cordials, being spirituous beverages to which sugar, honey or other natural sweeteners and extracts or essences have been added (e.g., spirituous beverages produced by distilling, or by mixing, ethyl alcohol or distilled spirits, with one or more of the following: fruits, flowers or other parts of plants, extracts, essences, essential oils or juices, whether or not concentrated). These products also include liqueurs and cordials containing sugar crystals, fruit juice liqueurs, egg liqueurs, herb liqueurs, berry liqueurs, spice liqueurs, tea liqueurs, chocolate liqueurs, milk liqueurs and honey liqueurs.

(C)All other spirituous beverages not falling in any preceding heading of this Chapter.’

By way of example of the products referred to, the explanatory note mentions, inter alia:

‘…

(7)The liqueurs known as “crèmes”, because of their consistency or colour. They are generally of relatively low alcoholic content and very sweet (for example, creams of cocoa, bananas, vanilla, coffee). The heading also covers spirits consisting of emulsions of spirit with products such as egg yolk or cream.

(8)Ratafias. These are kinds of liqueurs obtained from fruit juice; they often contain a small quantity of added aromatic substances (ratafias of cherries, of black currants, of raspberries, of apricots, etc.).

…

(15)Fruit or vegetable juices containing added alcohol and of an alcoholic strength by volume exceeding 0.5% vol, other than products of heading 2204.

…

(17)Beverages formulated to simulate wine by mixing distilled spirits with fruit juice and/or water, sugar, colouring, flavouring or other ingredients, other than products of heading 2204.’

Paragraph VIII of the HS explanatory note relating to general rule 3(b) states that the factor which determines essential character may, as between different kinds of goods, be determined, for example, by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.

Siebrand is a company which produces alcoholic and non-alcoholic beverages. It produces, inter alia, three alcoholic beverages called ‘Pina Colada’, ‘Whiskey Cream’ and ‘Apfel Cocktail’ respectively. These are produced from a cider base to which distilled alcohol, water, sugar syrup, various aromas and colourings are added, and, in the case of Pina Colada and Whiskey Cream in particular, a cream base. The three beverages have an alcoholic strength by volume of 14.5%, of which 12% is attributable to the distilled alcohol and 2.5% to the alcohol obtained by the fermentation of apple concentrate.

Until 1 January 2003, the products in question were classified by the inspector of taxes (‘the Inspector’) under heading 2206 of the CN, which also determined the rate of excise duty applicable to them. However, in accordance with the decision of the Staatssecretaris van Financiën of 15 January 2003, the Inspector adopted the stance that, in view of the alcoholic strength by volume and the nature of the products in question, these beverages should be classified with effect from 1 January 2003 under heading 2208 of the CN. This resulted in a higher rate of excise duty.

Although the Inspector deferred the application of the new rate until 1 July 2003, he issued Siebrand with eight notices of additional assessment for the period between July 2003 and February 2004. Siebrand objected to those notices of assessment, but the Inspector maintained his stance in his decision on the objection.

Siebrand then brought an action before the Gerechtshof te Arnhem (Regional Court of Appeal, Arnhem), which held that the products in question should be classified under heading 2208 of the CN.

Hearing the case on Siebrand’s appeal against that judgment, the Hoge Raad der Nederlanden (Supreme Court of the Netherlands) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘1. Can a beverage which contains a certain amount of distilled alcohol but which otherwise corresponds to the definition of heading 2206 of the [CN] be classified under that heading if the beverage in question is a fermented beverage which, as a result of the addition of water and particular ingredients, has lost the taste, smell and/or appearance of a beverage produced from a particular fruit or natural product?

The questions referred for a preliminary ruling

By its questions, which it is appropriate to consider together, the national court asks, in essence, whether fermented alcohol-based beverages corresponding originally to heading 2206 of the CN, to which a certain proportion of distilled alcohol, water, sugar syrup, aromas, colourings and, in some cases, a cream base have been added, resulting in the loss of the taste, smell and/or appearance of a beverage produced from a particular fruit or natural product, come under heading 2206 of the CN as fermented beverages or under heading 2208 of the CN as distillates.

In that regard, it is appropriate to bear in mind settled case-law, in accordance with which, in the interests of legal certainty and 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 in the section or chapter notes (see, inter alia, Case C‑142/06 Olicom [2007] ECR I‑6675, paragraph 16, and Joined Cases C‑362/07 and C‑363/07 Kip Europe and Others [2008] ECR I‑0000, paragraph 26).

The notes preceding the chapters of the Common Customs Tariff, in common, moreover, with the explanatory notes drawn up, as regards the CN, by the Commission and, as regards the HS, by the World Customs Organisation, may be an important aid to the interpretation of the scope of the various headings but do not have legally binding force (Olicom, paragraph 17; Case C‑486/06 Van Landeghem [2007] ECR I‑10661, paragraph 25; and Case C‑403/07 Metherma [2008] ECR I‑0000, paragraph 48).

It must be pointed out that, according to the HS explanatory note relating to heading 2206 of the CN, the addition of alcohol to beverages coming under that heading does not preclude such beverages from retaining that classification provided that they retain the character of products coming under the heading, namely that of fermented beverages.

However, it is apparent from the order for reference that the beverages at issue in the main proceedings have lost the taste, smell and appearance of a beverage produced from a particular fruit or natural product, that is to say a fermented beverage. Such products cannot be classified in heading 2206 of the CN.

As regards the classification of such products, it should be borne in mind that, according to general rule 2(b), any reference in a heading to a material or substance is to be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. That is the case in regard to products such as those at issue in the main proceedings, which contain fermented alcohol and also distilled alcohol. Those substances come under different tariff headings.

General rule 3(a) states that when by application of rule 2(b) goods are prima facie classifiable under two or more headings, the heading which provides the most specific description is to be preferred to headings providing a more general description.

Where products such as those at issue in the main proceedings are composed of different materials and neither of the two headings mentioned above is more specific than the other, the sole provision to which recourse may be had for the purpose of classifying the goods at issue in the main proceedings is general rule 3(b) (see Case 253/87 Sportex [1988] ECR 3351, paragraph 7, and Case C‑250/05 Turbon International [2006] ECR I‑10531, paragraph 20).

Under general rule 3(b), in carrying out the tariff classification of goods it is necessary to identify, from among the materials of which they are composed, the one which gives them their essential character (see Case C‑288/99 VauDe Sport [2001] ECR I-3683, paragraph 25; Case C‑276/00 Turbon International [2002] ECR I‑1389, paragraph 26; and Case C‑250/05 Turbon International, paragraph 21).

Consequently, it is necessary to identify, from among the materials of which products such as those at issue in the main proceedings are composed, the one which gives them their essential character.

It is apparent from the order for reference that these products are made from cider, to which are added distilled alcohol, water, sugar in the form of syrup, various aromas and colourings and, in the case of Pina Colada and Whiskey Cream, a cream base. The end products have an alcoholic strength by volume of 14.5%, 2.5% from alcohol fermented from cider and 12% from added distillate.

As stated in paragraph VIII of the HS explanatory note in relation to general rule 3(b), the factor which determines essential character may, as between different kinds of goods, be determined, for example, by the nature of the material or component, by its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.

So far as products such as those at issue in the main proceedings are concerned, a number of objective characteristics and properties may be taken into account in determining their essential character. Thus, first of all, it must be established that distilled alcohol accounts for not only more of their total volume but also more of their alcohol content than fermented alcohol.

Second, it is necessary to ascertain whether the particular organoleptic characteristics of those products correspond to those of the products classified in heading 2208 of the CN. The Court has consistently held that taste can constitute an objective characteristic or property of a product (see, to that effect, Case C‑124/03 Artrada and Others [2004] ECR I‑10297, paragraph 41, and Case C‑196/05 Sachsenmilch [2006] ECR I‑5161, paragraph 37).

In that regard, as has already been stated, products such as those at issue in the main proceedings have, as a result of the addition of water and other substances, lost the taste, smell and appearance of a beverage produced from a particular fruit or natural product, that is to say a fermented beverage. The particular organoleptic characteristics of those products, which define their essential character, therefore correspond to those of products classified in heading 2208 of the CN.

Finally, it is important to note that the intended use of a product may constitute an objective criterion for classification if it is inherent to the product, and that inherent character must be capable of being assessed on the basis of the product’s objective characteristics and properties (see Case C‑459/93 Thyssen Haniel Logistic [1995] ECR I‑1381, paragraph 13; Case C‑396/02 DFDS [2004] ECR I‑8439, paragraph 29; and Case C‑183/06 RUMA [2007] ECR I‑1559, paragraph 36). It is common ground that the objective characteristics and properties of products such as those at issue in the main proceedings, including the form, colour and name under which they are marketed, correspond to those of a spirituous beverage.

It follows from this that the essential characteristics of beverages such as those at issue in the main proceedings correspond overall to those of a product coming under heading 2208 of the CN.

Taking the foregoing considerations into account, the answer to be given to the questions referred is that fermented alcohol-based beverages corresponding originally to heading 2206 of the CN, to which a certain proportion of distilled alcohol, water, sugar syrup, aromas, colourings and, in some cases, a cream base have been added, resulting in the loss of the taste, smell and/or appearance of a beverage produced from a particular fruit or natural product, do not come under heading 2206 of the CN but rather under heading 2208 thereof.

Costs

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 (Third Chamber) hereby rules:

Fermented alcohol-based beverages corresponding originally to heading 2206 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 Commission Regulation (EEC) No 2587/91 of 26 July 1991, to which a certain proportion of distilled alcohol, water, sugar syrup, aromas, colourings and, in some cases, a cream base have been added, resulting in the loss of the taste, smell and/or appearance of a beverage produced from a particular fruit or natural product, do not come under heading 2206 of the Combined Nomenclature but rather under heading 2208 thereof.

[Signatures]

* Language of the case: Dutch.