Dinter GmbH v Hauptzollamt Düsseldorf (C 522/07) & Europol Frost-Food GmbH v Hauptzollamt Krefeld (C 65/08)
The ECJ recently ruled on whether fruit concentrates with higher Brix values due to water extraction resulted in ‘their preclusion from classification in ‘no added sugar’ categories. The case concerned was a joined case- Dinter (C-522/07) and Europol (C-65).
Case C-522/07 Dinter
In October 2005, the customs authority accepted that the apple juice concentrates imported by Dinter (which did not contain additional sugar) and was of a Brix value of 66.8 should be classified under CN Code 2009.79.99 (“Other fruit juice: of a Brix value exceeding 20 but not exceeding 67: not containing added sugar.”)
However, the same customs authority decided in March 2006 that the product in question had been misclassified and should have actually been classified under CN 2106.90.98 (“Food preparation not elsewhere specified or included: Other: Other: Other”) and claimed post-clearance recovery of customs duties. This claim was made on the grounds that under Additional Notes 2(a), 5(a) and 5(b) in Chapter 20 of the CN, imported apple juice which had lost its original character of fruit juice did not come under heading 2009 but actually under heading 2106.
Dinter contested that decision before the Dusseldorf Finance Court which subsequently referred three questions to the ECJ for a preliminary ruling:
(1) Does Additional Note 5(b) to Chapter 20 of the [CN] mean that the term “fruit juices with added sugar” also refers to fruit juices to which no sugar has actually been added, but whose added sugar content is calculated mathematically in accordance with Additional Note 5(a)
(2) Is Additional Note 5(b) to Chapter 20…to be interpreted as meaning that the term “fruit juices in their natural state” is merely clarified by the words “obtained from fruits or by dilution of concentrated juice” but in fact applies to all types of fruit juices (not cooked and without added alcohol) in the state in which they are presented?
(3) If both the preceding questions are answered in the affirmative, is Additional Note 5(b)…valid?
The ECJ was faced here with two main issues:
• Whether the apple concentrates were precluded from classification under CN 2009 (a classic classification question) and;
• A fundamental point of law. The difficulties in classification had not arisen due to uncertainties created by the customs tariff but by the Additional Notes, and in particular Note 5(b) (as amended by Regulations 1776/2001, 2003/2001 and 1810/2004) and thus the Commission had exceeded their powers by amending them as they had done.
The applicants argued that according to the wording of the tariff lines for CN 2009, the fruits own sugar content is not limited and that the national authorities had actually made a notional calculation of the added sugar content. Therefore, they argued that the imported apple juice concentrate contained 100% by weight of fruit juices and had undergone no processing other than water extraction which had no effect on the original character of the fruit juice. Thus they claimed that the Additional Notes were irrelevant.
The Commission argued in Dinter that the purpose of Additional Note (5(b)) was to exclude goods which because of their higher sugar content had lost their original character as fruit juices. They argued that recitals 1 and 5 in the preamble to Regulation No. 1776/2001, whose aim was to exclude goods with a natural fruit juice content of less than 50% by weight, suggests that the Note should be interpreted as a mathematical method of calculating additional sugar rather than notional as the applicants had contended. Therefore the Commission argued that Additional Note 5(b) is applicable to all kinds of fruit juice (including the apple concentrates in question) but because of the way that CN 2009 is structured and because of the plethora of case-law according to which a fruit juice retains its original characteristics by reason of its smell and taste, the Commission actually argued that the Note was not applicable in these particular cases!
The ECJ ruled that the Additional Note in question was not valid. In its summing up the Court stated that:
“The broad logic of subheading 2009.79 clearly suggests that natural apple juice concentrates of a Brix value slightly below 67 have not lost their characteristics as fruit juices contrary to what was stated in Additional Note 5(b)…The apple juice concentrates…which have undergone water extraction and therefore have high Brix values, retain their original character. In these circumstances there is no sugar added. The high level of added sugar, giving a result of over 50% by weight is produced solely by the concentration brought about by the extraction of water. In consequence, by excluding apple juice concentrates from heading CN2009, Additional Note 5(b) to Chapter 20 of the CN definitely amends the content of the tariff headings at issue, thereby exceeding the powers which Article 9 of Regulation 2658/87 confers upon the Commission.”
Message to Importers
If you have been importing fruit concentrates under CN 2106 but believe that they should have been imported under CN2009 then you may have grounds for a reclaim of overpaid duties. We recommend importers act quickly in order to gain certainty and maximise any potential recoveries of previously overpaid customs duties.
We can assist you gain certainty and maximise recoveries by:
• Obtaining a legal ruling as to the correct classification of your fruit juices
• Submitting a protected claim to maximise recoveries
• Complete the necessary customs reclaim form and submit this to the customs reclaims office
• Address any queries arising from the claim
If you have any queries on this matter then please call us on 01905 619229 or send us an email at firstname.lastname@example.org.