Case C-150/08 Siebrand BV The ECJ was recently confronted with a case whereby a product was deemed to have lost its “original” taste, smell and/or appearance when additional ingredients were added to it. The issue in question was under which heading of the Combined Nomenclature the product could be classified.
The Company in question, Siebrand, produces alcoholic and non-alcoholic beverages. The debate concerned three particular products in this case, “Pina Colada”, “Whiskey Cream” and “Apfel Cocktail” which are produced from a cider base to which distilled water, sugar syrup, various aromas and colourings are added and in the case of “Pina Colada” and “Whiskey Cream”, a cream base. The three beverages have an alcoholic strength of 14.5%, 12% is attributable to the distilled alcohol, the other 2.5% to the alcohol obtained by fermented apple concentrate.
Until 1 January 2003, the products were classed under CN 2206:
“…Other fermented beverages (for example, cider, perry, mead); mixtures of fermented beverages and mixtures of fermented beverages and non-alcoholic beverages not elsewhere specified or included…”
However, the customs authorities decided that in view of the alcoholic strength by volume and the nature of the products in question, these beverages should be classed from 1 January 2003 under CN heading 2208:
“…Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80 % vol; spirits, liqueurs and other spirituous beverages…”
This thereby attracted a higher rate of duty than under CN2206. Two questions were subsequently referred to the ECJ by the Dutch Court:
(a) Can a beverage which contains a certain amount of distilled alcohol, but which otherwise corresponds to the definition under CN2206, be classified under that heading if the beverage in question is a fermented beverage that 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?
(b) If so, what criterion should govern the application of CN 2208 on the ground that it contains distilled alcohol?
The ECJ argued that settled case-law had held that the decisive criterion for the classification of goods for customs purposes is in general to be sought in their “objective characteristics” and that under general rule of interpretation 3(b), it is necessary to identify, from among the materials of which they are composed, the one which gives them their “essential character”.
The ECJ continued to say that as the distilled not only more of the total volume but also more of their alcohol content than fermented alcohol.
Furthermore, it had been accepted in previous case-law that “taste” could constitute an “objective characteristic” as required under the rules of interpretation. Finally the court argued that the “intended use” of a product also qualified as an “objective characteristic“ and that in this case all of the above corresponded to those of a spirituous beverage and therefore more closely resembled CN 2208 than CN2206.
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