61981J0129

COMMON CUSTOMS TARIFF - TARIFF HEADINGS - RESIDUES RESULTING FROM THE EXTRACTION OF VEGETABLE OILS WITHIN THE MEANING OF HEADING 23.04 - FLOUR EXTRACTED FROM SOYA - PRODUCT COVERED BY THE COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS

( REGULATION NO 136/66/EEC OF THE COUNCIL , ART . 1 ( 2 ))

FLOUR EXTRACTED FROM SOYA MUST BE CLASSIFIED IN HEADING EX 23.04 OF THE COMMON CUSTOMS TARIFF AND IS THEREFORE INCLUDED AMONG THE PRODUCTS LISTED IN ARTICLE 1 ( 2 ) OF REGULATION NO 136/66 ON THE ESTABLISHMENT OF A COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS .

IN CASE 129/81

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE ITALIAN CORTE SUPREMA DI CASSAZIONE ( SUPREME COURT OF CASSATION ), SECOND CIVIL DIVISION , FOR A PRELIMINARY RULING IN THE PROCEEDINGS PENDING BEFORE THAT COURT BETWEEN

FRATELLI FANCON , MONTE DI MALO ,

AND

SOCIETA INDUSTRIALE AGRICOLA TRESSE ( SIAT ), QUARTO D ' ALTINO ,

ON THE INTERPRETATION OF ARTICLE 1 ( 2 ) OF REGULATION NO 136/66/EEC OF THE COUNCIL OF 22 SEPTEMBER 1966 ON THE ESTABLISHMENT OF A COMMON ORGANIZ ATION OF THE MARKET IN OILS AND FATS ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION , 1965-1966 , P . 221 ).

1 BY ORDER OF 28 JANUARY 1981 , RECEIVED AT THE COURT ON 27 MAY 1981 , THE CORTE SUPREMA DI CASSAZIONE ( SUPREME COURT OF CASSATION ), SECOND CIVIL DIVISION , REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A QUESTION CONCERNING THE INTERPRETATION OF ARTICLE 1 ( 2 ) OF REGULATION NO 136/66/EEC OF THE COUNCIL OF 22 SEPTEMBER 1966 ON THE ESTABLISHMENT OF A COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION , 1965-1966 , P . 221 ).

2 THIS QUESTION IS RAISED IN THE CONTEXT OF A DISPUTE BETWEEN TWO ITALIAN UNDERTAKINGS ONE OF WHICH BOUGHT FROM THE OTHER BRAZILIAN FLOUR EXTRACTED FROM SOYA WHICH WAS TO BE DELIVERED BETWEEN THE END OF JULY AND SEPTEMBER 1973 . DURING THE PERIOD BETWEEN THE CONCLUSION OF THE CONTRACT AND THE COMMENCEMENT OF ITS PERFORMANCE THE ITALIAN GOVERNMENT PROMULGATED DECREE-LAW NO 425 OF 24 JULY 1973 ( GAZZETTA UFFICIALE NO 189 OF 24 JULY 1973 ), CONVERTED INTO LAW NO 494 OF 4 AUGUST 1973 , RELATING TO THE REGULATION OF THE PRICES TO BE APPLIED BY UNDERTAKINGS OF A CERTAIN SCALE . THE DISPUTE TURNS ON THE QUESTION WHETHER THE CONTRACT MUST BE PERFORMED IN ACCORDANCE WITH THE TERMS STIPULATED IN IT OR WHETHER THOSE TERMS MUST BE REVISED ON THE BASIS OF DECREE-LAUW NO 425 .

3 THE SOLUTION OF THIS PROBLEM DEPENDS ON THE NATURE OF THE PRODUCT AT ISSUE . IF IT IS COVERED BY A COMMON ORGANIZATION OF THE MARKET THE MEMBER STATES MAY NO LONGER INTERFERE , THROUGH NATIONAL PROVISIONS ADOPTED UNILATERALLY , IN THE MACHINERY OF PRICE-FORMATION AS ESTABLISHED UNDER THE COMMON ORGANIZATION .

4 IT WAS THIS PRECEPT , DERIVED FROM THE CASE-LAW OF THE COURT ( JUDGMENT OF 23 JANUARY 1975 IN CASE 31/74 GALLI ( 1975 ) ECR 47 ) WHICH LED THE CORTE SUPREMA DI CASSAZIONE TO ASK THE COURT OF JUSTICE ' ' WHETHER OR NOT FLOUR EXTRACTED FROM SOYA IS INCLUDED IN THE LIST OF PRODUCTS SET OUT IN ARTICLE 1 ( 2 ) OF REGULATION NO 136/66/EEC OF THE COUNCIL OF 22 SEPTEMBER 1966 , IN PARTICULAR UNDER HEADINGS 12.02 , EX 15.17 OR EX 23.04 OF THE COMMON CUSTOMS TARIFF ' ' .

5 REGULATION NO 136/66/EEC IS THE BASIC COMMUNITY TEXT WHICH ESTABLISHED A COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS . ARTICLE 1 ( 2 ) OF THE REGULATION LISTS THE PRODUCTS IN THE SECTOR OF OIL SEEDS AND OLEAGINOUS FRUIT WHICH COME WITHIN THAT PROVISION BY CLASSIFYING THEM UNDER A NUMBER OF THE COMMON CUSTOMS TARIFF .

6 THE THREE HEADINGS SPECIFIED BY THE NATIONAL COURT WERE , AT THE MATERIAL TIME , WORDED IN REGULATION NO 1/73 OF 19 DECEMBER 1972 RELATING TO THE COMMON CUSTUMS TARIFF ( OFFICIAL JOURNAL 1973 , L 1 , P . 1 ) AS FOLLOWS :

' ' 12.02 : FLOURS OR MEALS OF OIL SEEDS OR OLEAGINOUS FRUIT , NON-DEFATTED , ( EXCLUDING MUSTARD FLOUR ):

A . OF SOYA BEANS

B . OTHER

EX 15.17:RESIDUES RESULTING FROM THE TREATMENT OF FATTY SUBSTANCES OR ANIMAL OR VEGETABLE WAXES :

A . CONTAINING OIL HAVING THE CHARACTERISTICS OF OLIVE OIL :

I . SOAPSTOCKS

II . OTHER

B.OTHER :

I . OIL FOOTS AND DREGS ; SOAPSTOCKS

II . OTHER

EX 23.04OIL-CAKE AND OTHER RESIDUES ( EXCEPT DREGS ) RESULTING FROM THE EXTRACTION OF VEGEBABLE OILS :

A.OIL-CAKE AND OTHER RESIDUES RESULTING FROM THE EXTRACTION OF OLIVE OIL

B.OTHER . ' '

7 IT MUST FIRST BE NOTED THAT SOYA SEEDS COME WITHIN THIS COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS BECAUSE THEY ARE OIL SEEDS MENTIONED , GENERICALLY , IN HEADING 12.01 OF THE COMMON CUSTOMS TARIFF , WHICH APPEARS IN ARTICLE 1 ( 2 ) OF REGULATION NO 136/66/EEC .

8 IT IS THEN NECESSARY TO EXAMINE EACH TARIFF HEADING MENTIONED BY THE NATIONAL COURT FOR THE PURPOSES OF ASCERTAINING WHETHER OR NOT FLOUR EXTRACTED FROM SOYA COMES WITHIN ONE OF THEM .

9 IT IS AN UNDISPUTED FACT THAT THE INDUSTRIAL TREATMENT OF SOYA SEEDS YIELDS SEVERAL PRODUCTS INCLUDING FLOUR EXTRACTED FROM SOYA WHICH IS A PRODUCT RICH IN PROTEINS WHOSE INTENDED USE IS AS A FEEDINGSTUFF FOR CATTLE . IT OWES ITS NUTRITIVE QUALITY , WHICH IS USEFUL FOR THE PRODUCTION OF MEAT , TO THIS CHARACTERISTIC AND TO THE FACT THAT MOST OF THE OIL HAS BEEN EXTRACTED BY PRESSURE OR BY THE USE OF SOLVENTS .

10 HEADING 12.02 CANNOT APPLY TO FLOUR EXTRACTED FROM SOYA BECAUSE ITS MANUFACTURE YIELDS A DEFATTED PRODUCT . ACCORDING TO THE WORDING OF THE HEADING AND THE EXPLANATORY NOTES TO THE CUSTOMS COOPERATIONAL COUNCIL NOMENCLATURE ONLY FLOURS OR MEALS OF OIL SEEDS AND OLEAGINOUS FRUIT , NON-DEFATTED , COME UNDER THE HEADING .

11 SINCE HEADING EX 15.17 REFERS ONLY TO RESIDUES RESULTING FROM THE TREATMENT OF FATTY SUBSTANCES , IT , TOO , CANNOT APPLY TO FLOUR EXTRACTED FROM SOYA , AS THAT HEADING REFERS TO RESIDUES RESULTING FROM THE TREATMENT OF FATTY SUBSTANCES WHICH CANNOT BE USED FOR FEEDING CATTLE , WHICH IS A CHARACTERISTIC QUALITY OF FLOUR EXTRACTED FROM SOYA .

12 ON THE OTHER HAND , HEADING EX 23.04 REFERS TO OIL-CAKE AND OTHER RESIDUES WHICH , ACCORDING TO THE ABOVE-MENTIONED NOMENCLATURE , ARE ' ' THE SOLID RESIDUES REMAINING AFTER THE EXTRACTION OF OIL FROM OIL SEEDS . . . BY SOLVENTS OR IN A PRESS OR ROTARY EXPELLER ' ' , WHICH IS THE TREATMENT USED TO OBTAIN FLOUR EXTRACTED FROM SOYA .

13 CLASSIFICATION OF FLOUR EXTRACTED FROM SOYA UNDER HEADING EX 23.04 HAS GIVEN RISE TO THE OBJECTION , ON THE ONE HAND , THAT THIS FLOUR IS NOT TOTALLY DEFATTED AND THAT IT THEREFORE CANNOT BE DEFINED AS THE RESIDUE RESULTING FROM THE EXTRACTION OF A FATTY SUBSTANCE AND , ON THE OTHER HAND , TO THE OBJECTION THAT IT DOES NOT CONSTITUTE A RESIDUE BUT THE MAIN PRODUCT RESULTING FROM THE DEFATTING PROCESS .

14 IT IS APPROPRIATE TO REPLY TO THE FIRST OF THESE OBJECTIONS THAT THE DEFATTING PROCESS IS TAKEN AS FAR AS TECHNOLOGY MAKES POSSIBLE AND THAT THE PRESENCE OF TRIFLING QUANTITIES OF RESIDUAL OIL DOES NOT ADVERSELY AFFECT THE QUALITY OF A FLOUR WHOSE MAIN PROPERTY IS THE PRESENCE OF PROTEINS OF HIGH NUTRITIVE VALUE FOR CATTLE . THE SECOND OBJECTION MUST BE REFUTED ON THE GROUND THAT THE TERM ' ' RESIDUE ' ' IS NOT TO BE CONFUSED WITH THAT OF ' ' WASTE ' ' , AS IS SHOWN BY THE WORDING OF HEADING EX . 23.04 WHICH EXCLUDES ' ' DREGS ' ' , WHICH ARE VIRTUALLY WORTHLESS SUBSTANCES , WHEREAS FLOUR EXTRACTED FROM SOYA IS THE RESIDUE OF SOYA SEEDS REMAINING AFTER THE INDUSTRIAL TREATMENT OF THE SEEDS IN ORDER TO OBTAIN THAT PRODUCT .

15 IT MUST THEREFORE BE CONCLUDED THAT FLOUR EXTRACTED FROM SOYA MUST BE CLASSIFIED IN HEADING EX 23.04 OF THE COMMON CUSTOMS TARIFF AND THAT IT IS THEREFORE INCLUDED AMONG THE PRODUCTS LISTED IN ARTICLE 1 ( 2 ) OF REGULATION NO 136/66/EEC OF THE COUNCIL ON THE ESTABLISHMENT OF A COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS .

16 IN VIEW OF THIS CLASSIFICATION OF FLOUR EXTRACTED FROM SOYA , ANY EXAMINATION OF OTHER HEADINGS TO WHICH THE REGULATION REFERS WOULD BE PURPOSELESS .

COSTS

17 THE COSTS INCURRED BY THE GOVERNMENT OF THE ITALIAN REPUBLIC AND BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE . AS THIS CASE IS , SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION BEFORE THE NATIONAL COURT , THE DECISION ON COSTS IS A MATTER FOR THAT COURT .

ON THOSE GROUNDS ,

THE COURT , ( THIRD CHAMBER )

IN ANSWER TO THE QUESTION REFERRED TO IT BY THE CORTE SUPREMA DI CASSAZIONE , SECOND CIVIL DIVISION , BY ORDER OF 28 JANUARY 1981 , HEREBY RULES :

FLOUR EXTRACTED FROM SOYA MUST BE CLASSIFIED IN HEADING EX 23.04 OF THE COMMON CUSTOMS TARIFF AND IS THEREFORE INCLUDED AMONG THE PRODUCTS LISTED IN ARTICLE 1 ( 2 ) OF REGULATION NO 136/66/EEC OF THE COUNCIL OF 22 SEPTEMBER 1966 ON THE ESTABLISHMENT OF A COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION , 1965-1966 , P . 221 ).