Prysmian Cabluri şi Sisteme (Customs union - Tariff classification - Optical fibre cables - Judgment) [2024] EUECJ C-168/23 (27 June 2024)

Judgment This request for a preliminary ruling concerns the interpretation of tariff subheadings 8544 70 00 and 9001 10 90 of the Combined Nomenclature (‘the CN’) contained 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 Council Regulation (EC) No 254/2000 of 31 January 2000 (OJ 2000 L 28, p. 16) in the version resulting from Commission Implementing Regulation (EU) 2017/1925 of 12 October 2017 (OJ 2017 L 282, p. 1) (‘Regulation No 2658/87’). The request has been made in proceedings between Prysmian Cabluri şi Sisteme SA (‘Prysmian’), on the one hand, and the Agenţia Naţională de Administrare Fiscală - Direcţia Generală Regională a Finanţelor Publice Craiova - Direcţia Regională Vamală Craiova (National Tax Administration Office - Regional Directorate of Public Finance, Craiova - Regional Customs Directorate, Craiova, Romania), the Autoritatea Vamală Română (Romanian Customs Authority) and the Agenţia Naţională de Administrare Fiscală - Direcţia Generală de Administrare a Marilor Contribuabili (National Tax Administration Office - Directorate-General for the Administration of Large-scale Taxpayers, Romania), on the other hand, in relation to the allegedly erroneous classification, by Prysmian, of optical fibre cables under subheading 8544 70 00 of the CN instead of subheading 9001 10 90 of that nomenclature. Legal context The HS The Harmonised Commodity Description and Coding System (‘the HS’) was established by the International Convention on the Harmonised Commodity Description and Coding System, concluded in Brussels on 14 June 1983 in the framework of the World Customs Organisation (WCO) and approved, together with the Protocol of Amendment thereto of 24 June 1986, on behalf of the European Economic Community by Council Decision 87/369/EEC of 7 April 1987 (OJ 1987 L 198, p. 1). The Explanatory Notes to the HS provide, in respect of heading 85.44 of the HS, entitled ‘Insulated (including enamelled or anodised) wire, cable (including co-axial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors’: ‘Provided they are insulated, this heading covers electric wire, cable and other conductors (e.g., braids, strip, bars) used as conductors in electrical machinery, apparatus or installations. Subject to this condition, the heading includes wiring for interior work or for exterior use (e.g., underground, submarine or aerial wires or cables). These goods vary from very fine insulated wire to thick cables of more complex types. Non-metal conductors are also covered by this heading. … The heading also covers optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors. The sheaths are usually of different colours to permit identification of the fibres at both ends of the cable. Optical fibre cables are used mainly in telecommunications because their capacity for the transmission of data is greater than that of electrical conductors.’ The Explanatory Notes to the HS provide, in respect of heading 9001 of the HS, entitled ‘Optical fibres and optical fibre bundles; optical fibre cables other than those of heading 85.44; sheets and plates of polarising material; lenses (including contact lenses), prisms, mirrors and other optical elements, of any material, unmounted, other than such elements of glass not optically worked’: ‘… This heading covers: (A) Optical fibres and optical fibre bundles, as well as optical fibre cables other than those of heading 85.44. Optical fibres consist of concentric layers of glass or plastics of different refractive indices. Those drawn from glass have a very thin coating of plastics, invisible to the naked eye, which renders the fibres less prone to fracture. Optical fibres are usually presented on reels and may be several kilometres in length. They are used to make optical fibre bundles and optical fibre cables. Optical fibre bundles may be rigid, in which case the fibres are agglomerated by a binder along their full length, or they may be flexible, in which case they are bound only at their ends. If coherently bundled, they are used for transmission of images, but if randomly bundled, they are suitable only for transmission of light for illumination. Optical fibre cables of this heading (which may be fitted with connectors) consist of a sheath containing one or more optical fibre bundles, the fibres of which are not individually sheathed. Optical fibre bundles and cables are used primarily in optical apparatus, particularly in endoscopes of heading 90.18. … The heading does not cover: … (g) Optical fibre cables made up of individually sheathed fibres (heading 85.44).’ The CN In accordance with Article 1 of Regulation No 2658/87, the CN governs the tariff classification of goods imported into the European Union. It reproduces the six-digit headings and subheadings of the HS, with only the seventh and eighth digits creating further subheadings that are specific to the CN. Under Article 12(1) of Regulation No 2658/87, the European Commission is to adopt each year a regulation reproducing a complete version of the CN, together with the corresponding autonomous and conventional rates of duty of the Common Customs Tariff, as resulting from measures adopted by the Council of the European Union or by the Commission. That regulation is to be published no later than 31 October in the Official Journal of the European Union and it is to apply from 1 January of the following year. As set out in paragraph 1 above, the CN is applicable to the dispute in the main proceedings in the version resulting from Commission Implementing Regulation 2017/1925, applicable from 1 January 2018. Part One of the CN, entitled ‘Preliminary provisions’, includes a Section I on ‘General rules’, subsection A of which, entitled ‘General rules for the interpretation of the [CN]’, provides: ‘Classification of goods in the [CN] shall be governed by the following principles: 1. The titles of sections, chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the following provisions. … 6. For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis , to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section and chapter notes also apply, unless the context requires otherwise.’ Part Two of the CN, entitled ‘Schedule of Customs Duties’, contains Section XVI, entitled ‘Machinery and mechanical appliances; electrical equipment; parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles’. Note 1(m) of that section clarifies that it does not cover the articles of Chapter 90. That Section XVI includes Chapter 85, entitled ‘Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles’. That chapter includes heading 8544 of the CN, which is structured as follows: ‘CN code Description Conventional rate of duty (%) Supplementary unit 2 4 Insulated (including enamelled or anodised) wire, cable (including coaxial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors … 8544 70 00 – Optical fibre cables Free —’ Part Two of the CN also contains Section XVIII, entitled ‘Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; clocks and watches; musical instruments; parts and accessories thereof’. That section includes Chapter 90, entitled ‘Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof’. That chapter includes, inter alia, heading 9001 of the CN, which is structured as follows: ‘CN code Description Conventional rate of duty (%) Supplementary unit 2 4 Optical fibres and optical fibre bundles; optical fibre cables other than those of heading 8544; sheets and plates of polarising material; lenses (including contact lenses), prisms, mirrors and other optical elements, of any material, unmounted, other than such elements of glass not optically worked 9001 10 – Optical fibres, optical fibre bundles and cables 9001 10 10 – - Image conductor cables 2,9 — 9001 10 90 – - Other 2,9 — …’ Note 1(h) of Chapter 90 clarifies that it does not cover the optical fibre cables of heading 8544. The Explanatory Notes to the CN, established by the Commission, pursuant to the second indent of Article 9(1)(a) of Regulation No 2658/87 and published in the Official Journal of the European Union on 8 December 2007 (OJ 2007 C 296, p. 4; ‘the 2007 explanatory notes’) and 24 May 2019 (OJ 2019 C 179, p. 4; ‘the 2019 explanatory notes’) respectively, are relevant for the purposes of the dispute in the main proceedings. In the 2007 explanatory notes, the note concerning subheading 8544 70 00 of the CN was worded as follows: ‘8544 70 00 - Optical fibre cables This subheading also includes optical fibre cables, designed for example for telecommunication use, made up of optical fibres individually coated with a dual layer of acrylate polymer placed in a protective casing. The coating consists of an inner sheath of soft acrylate and an outer sheath of hard acrylate, the latter being coated by a layer of various colours. The coating of the individual optical fibres provides protection and structural integrity, for example by protecting the individual fibres against fracture.’ In the 2019 explanatory notes, the note concerning subheading 8544 70 00 of the CN was replaced with the following text: ‘8544 70 00 - Optical fibre cables This subheading also includes optical fibre cables, designed for example for telecommunication use, made up of one or more optical fibres of heading 9001 which are individually coated with a dual layer of acrylate polymer. The coating consists of an inner layer of soft acrylate and an outer layer of hard acrylate, the latter may be coloured or coated by a layer of different colours to permit the identification of the fibres. The optical fibres are individually sheathed by the dual layer coating; they do not form an optical fibre cable of heading 8544 by themselves until placed in a protective casing. The dual layer coating of the individual optical fibres provides protection and structural integrity, for example by protecting the individual fibres against fracture and abrasion.’ Regulation (EU) No 9 52/2013 Article 33 of Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (OJ 2013 L 269, p. 1) provides: ‘1. The customs authorities shall, upon application, take decisions relating to binding tariff information (BTI decisions), or decisions relating to binding origin information (BOI decisions). … 2. BTI or BOI decisions shall be binding, only in respect of the tariff classification or determination of the origin of goods: (a) on the customs authorities, as against the holder of the decision, only in respect of goods for which customs formalities are completed after the date on which the decision takes effect; (b) on the holder of the decision, as against the customs authorities, only with effect from the date on which he or she receives, or is deemed to have received, notification of the decision. …’ The dispute in the main proceedings and the questions referred for a preliminary ruling Prysmian imported, over the period from 6 July to 21 December 2018, goods (‘the goods concerned’) that it declared as falling under subheading 8544 70 00 of the CN, concerning ‘optical fibre cables’ and which were subject to a rate of import duty of 0%. On 1 July 2019, Prysmian informed the Biroul Vamal Olt (Customs Office, Olt, Romania; ‘the BVO’) that, having regard to the changes in the 2019 explanatory notes by comparison with the 2007 explanatory notes, the goods concerned now came under subheading 9001 10 90 of the CN, relating to ‘optical fibres’ and were subject to a rate of import duty of 2.9%. Prysmian then asked that the import duty on those goods be recalculated from 24 May 2019, corresponding to the date of publication of the 2019 explanatory notes in the Official Journal of the European Union . Following an ex post customs control between April and June 2021, the Direcţia Regională Vamală Craiova (Regional Customs Directorate, Craiova, Romania) considered, by decision of 29 June 2021, that the goods concerned were individually sheathed optical fibres falling under subheading 9001 10 90 of the CN, subject to a rate of import duty of 2.9%. Accordingly, it recalculated the customs duties in relation to all imports of the goods concerned that had been declared by Prysmian as ‘optical fibre cables’ falling under subheading 8544 70 00 of the CN and demanded that the company pay a total sum of 992 430 Romanian lei (RON) (approximately EUR 201 000) for additional customs duties and late payment interest. Prysmian lodged a complaint against that decision with the Agenţia Naţională de Administrare Fiscală - Direcţia Generală de Administrare a Marilor Contribuabili (National Tax Administration Office - Directorate-General for the Administration of Large-scale Taxpayers, Romania) which was dismissed by decision of 17 November 2021. Prysmian then brought an action before the Tribunalul Olt (Regional Court, Olt, Romania), the referring court, for the annulment of the decisions of 17 November 2021 and of 29 June 2021, and for exemption from the principal and ancillary tax liabilities resulting from those decisions. The referring court asks whether the 2019 explanatory notes altered the meaning of the 2007 explanatory notes and, if so, whether a retroactive reclassification of the goods concerned under tariff heading 9001 10 90 of the CN undermines the principles of legal certainty and foreseeability. That court also asks whether the principle of uniform application of tariff classification, in conjunction with the principles of legal certainty and the protection of legitimate expectations requires it to take into consideration, on the one hand, the decisions of other national customs authorities and, on the other hand, the decisions of customs authorities or courts of other Member States which have classified or confirmed the classification of the goods concerned under heading 8544 of the CN. In those circumstances, the Tribunalul Olt (Regional Court, Olt) decided to stay the proceedings and refer the following questions to the Court of Justice for a preliminary ruling: ‘(1) [In relation to the interpretation of] the CN …, [having regard to the 2007 explanatory notes], may a product consisting of an optical core and optical cladding, covered with a first soft inner acrylate coating and a second coloured hard outer acrylate sheathing [(a sheathing system known as ColorLock)], be classified under heading 8544 70 00 of [the CN]? (2) If the answer to the first question is in the negative, may the national customs authorities, when interpreting the principles of legal certainty and the protection of legitimate expectations, disregard the existence of decisions of the customs authority of that State that have not brought the classification of that product under heading 8544 70 00 into question, and also of BTI decisions (guaranteeing exemption from customs duties and [Value Added Tax]) issued by other customs authorities or by courts of other Member States of the European Union in favour of such a tariff classification, without such conduct infringing the principles of uniform application of tariff classification under Article 28 [TFEU], read in conjunction with the principles of legal certainty and the protection of legitimate expectations recognised by the [Court], relevant to the application of EU law? (3) If the answer to the second question is in the negative, when interpreting Article 114 of [Regulation No 952/2013], having regard to the principles of legal certainty and the protection of legitimate expectations, is it possible that a lack of clarity in the [2007 explanatory notes], in the version in force since the date of the Commission communication on the [2007 explanatory notes], followed by a subsequent clarification which entered into force, imposes an additional tax liability on a taxpayer in a Member State, especially where, over time, decisions have been made by the customs authority of that State that have not brought the classification of that product under heading 8544 70 00 into question, and BTI decisions have also been issued by other customs authorities or by courts of other Member States of the European Union in favour of such a tariff classification?’ Consideration of the questions referred The first question By its first question, the referring court asks, in essence, whether subheading 8544 70 00 of the CN must be interpreted as meaning that it covers an optical fibre cable consisting of an optical core and optical cladding, covered with a first soft inner acrylate coating and a second coloured hard outer acrylate sheathing. As a preliminary point, it should be noted that, when the Court is requested to give a preliminary ruling on a matter of tariff classification, its task is not to carry out such a classification itself, but to provide the referring court with guidance on the criteria which will enable it to classify the products concerned in the dispute brought before it. Such a classification requires a purely factual assessment of the characteristics of those products, which, in the context of such a reference for a preliminary ruling, is for the national court to carry out and not the Court of Justice (see, to that effect, judgment of 9 February 2023, LB (Air loungers) , C‑635/21, EU:C:2023:85 , paragraph 31, and the case-law cited). In addition, in accordance with Rule 1 of the General Rules for the interpretation of the CN, the classification of goods is to be determined according to the terms of the headings and any relative section or chapter notes to that nomenclature. Since the dispute in the main proceedings concerns the tariff classification of the goods concerned under subheadings 8544 70 00 or 9001 10 90 of that nomenclature, that classification must, under Rule 6 of those General Rules, be determined according to the terms of those subheadings, and the corresponding section and chapter notes may also be taken into consideration, unless the context otherwise requires. In the interests of legal certainty and ease of verification, the decisive criterion for the tariff classification of goods 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 corresponding section or chapter notes. The purpose of the product concerned may be an objective criterion for classification if it is inherent to that product, and must be assessed on the basis of the product’s objective characteristics and properties (see, to that effect, judgments of 3 June 2021, Flavourstream , C‑822/19, EU:C:2021:444 , paragraph 34, and of 9 February 2023, LB (Air loungers) , C‑635/21, EU:C:2023:85 , paragraph 33). Furthermore, although the explanatory notes to the HS and to the CN are not binding, they are an important means to ensure the uniform application of the Common Customs Tariff and, as such, may be a useful aid in its interpretation (see, to that effect, judgments of 18 June 2020, Hydro Energo , C‑340/19, EU:C:2020:488 , paragraph 36, and of 9 February 2023, LB (Air loungers) , C‑635/21, EU:C:2023:85 , paragraph 34). First, subheading 8544 70 00 of the CN entitled ‘Optical fibre cables’, constitutes a subdivision of heading 8544 of that nomenclature, the wording of which mentions, inter alia, ‘optical fibre cables made of individually sheathed fibres’. The title of heading 9001 of the CN refers, inter alia, to ‘optical fibres and optical fibre bundles; optical fibre cables other than those of heading 8544’. In accordance with note 1(h) of Chapter 90, that chapter does not cover the optical fibre cables of heading 8544. Second, the explanatory note relating to subheading 8544 70 00 of the CN, as it appears in the 2007 explanatory notes, clarifies that that subheading also includes optical fibre cables, designed for example for telecommunication use, made up of optical fibres individually coated with a dual layer of acrylate polymer placed in a protective casing. Third, according the Explanatory Notes to the HS, heading 8544 of that system covers optical fibre cables, made of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors, while heading 9001 of the HS includes ‘Optical fibres and optical fibre bundles, as well as optical fibre cables other than those of heading 8544’. Those notes further clarify that the optical fibre cables of heading 9001 of the HS consist of a sheath containing one or more optical fibre bundles, the fibres of which are not individually sheathed. It follows from the foregoing, that the CN established a difference between ‘cables’ and ‘individually sheathed fibres’ and that only optical fibre cables made of individually sheathed fibres fall under heading 8544 of that nomenclature, to the exclusion of optical fibres themselves. By contrast, individual optical fibres and optical fibre bundles fall under heading 9001 of the nomenclature, in accordance with the wording of that heading. Moreover, in the light of the wording of heading 8544 of the CN, the explanatory note relating to subheading 8544 70 00 of the CN and the Explanatory Notes to the HS in relation to heading 8544 of that system, optical fibres forming cables must be both (i) individually sheathed and (ii) placed in a protective casing in order to fall within this heading. In this case, it is apparent from the request for a preliminary ruling that the goods concerned are optical fibre cables individually sheathed by means of a two-layer coating, without protective casing. Consequently, subject to the verifications which are for the referring court to carry out, those products, since they do not satisfy the second cumulative condition mentioned in the previous paragraph, cannot fall under heading 8544 of the CN and must be classified under heading 9001 of the CN. Having regard to the above, the answer to the first question is that subheading 8544 70 00 of the CN must be interpreted as meaning that it does not cover an optical fibre cable consisting of an optical core and optical cladding, covered with a first soft inner acrylate coating and a second coloured hard outer acrylate sheathing. The second question By its second question, the referring court asks, in essence, whether the principles of judicial certainty and the protection of legitimate expectations must be interpreted as meaning that they preclude the recovery, by the customs authorities of a Member State, of duties and taxes owed by a taxpayer as a result of the incorrect classification, according to those authorities, of a product under a subheading of the CN, while BTI decisions issued to other taxpayers, by those authorities and by the customs authorities of other Member States, and decisions by courts of other Member States do not deviate from that tariff classification. The principle of legal certainty, the corollary of which is the principle of the protection of legitimate expectations, requires that rules of law be clear and precise and that the application of those rules be predictable for individuals, especially where they may have negative consequences for individuals and undertakings. In particular, that principle requires that legislation enables those concerned to know precisely the extent of the obligations which are imposed on them and take steps accordingly (judgment of 3 June 2021, Jumbocarry Trading , C‑39/20, EU:C:2021:435 , paragraph 48 and the case-law cited). The principle of the protection of legitimate expectations can only be relied upon by a person in a situation in which an administrative authority has caused that person to entertain expectations which are justified by precise, unconditional and consistent assurances provided to him or her and originating from authorised, reliable sources (see, to that effect, judgments of 7 August 2018 Ministru kabinets , C‑120/17, EU:C:2018:638 , paragraph 50, and of 31 March 2022, Smetna palata na Republika Bulgaria , C‑195/21, EU:C:2022:239 , paragraph 65). In the present case, in the first place, as noted in paragraphs 32 to 37 of this judgment, it follows from the clear and precise wording of subheadings 8544 70 00 and 9001 10 90 of the CN, read in the light of the 2007 explanatory notes and the explanatory notes to the HS, that goods such as those at issue fall under the latter subheading and not the former. In that regard, contrary to Prysmian’s submissions, the 2019 explanatory notes, according to which individually sheathed optical fibres ‘do not form an optical fibre cable of heading 8544 by themselves until placed in a protective casing’, merely clarifies the content of the condition relating to the existence of a protective casing, without changing the clear terms of the 2007 explanatory notes. In the second place, in accordance with Article 33(2) of Regulation No 952/2013, a BTI may be relied on only by its holder, or by the representative of the holder, as against the customs authorities that issued it and those of other Member States (see, to that effect, judgment of 7 April 2011, Sony Supply Chain Solutions (Europe) , C‑153/10, EU:C:2011:224 , paragraph 39). Since the BTIs issued by other customs authorities and the decisions by courts of other Member States that classify or confirm the classification of the goods concerned under subheading 8544 70 00 of the CN were not sent to Prysmian, such information and decisions cannot be considered as having provided precise, unconditional and consistent assurances to that company, within the meaning of the case-law referred to in paragraph 41 above, liable to give rise to legitimate expectations on the part of that company as to whether that classification is well founded. Having regard to the foregoing considerations, the answer to the second question is that the principles of legal certainty and the protection of legitimate expectations must be interpreted as meaning that they do not preclude the recovery, by the customs authorities of a Member State, of the unpaid duties and taxes owed by a taxpayer as a result of the incorrect classification, according to those authorities, of a product under a subheading of the CN, even if BTI decisions issued to other taxpayers, by those authorities and by the customs authorities of other Member States, and decisions by courts of other Member States did not deviate from that tariff classification. The third question Having regard to the answer given to the second question, there is no need to answer the third question. Costs Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring 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 (Eighth Chamber) hereby rules: 1. The subheadings 8544 70 00 of the Combined Nomenclature contained 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 Council Regulation (EC) No 254/2000 of 31 January 2000 in the version resulting from Commission Implementing Regulation (EU) 2017/1925 of 12 October 2017 must be interpreted as meaning that it does not cover an optical fibre cable consisting of an optical core and optical cladding, covered with a first soft inner acrylate coating and a second coloured hard outer acrylate sheathing. 2. The principles of legal certainty and the protection of legitimate expectations must be interpreted as meaning that they do not preclude the recovery, by the customs authorities of a Member State, of the duties and taxes owed by a taxpayer as a result of the erroneous classification, according to those authorities, of a product under a subheading of the Combined Nomenclature appearing in Annex I to Regulation No 2658/87, as amended by Regulation No 254/2000, in the version resulting from Commission Implementing Regulation 2017/1925, even if binding tariff information decisions issued to other taxpayers, by those authorities and by the customs authorities of other Member States, and decisions by courts of other Member States did not deviate from that tariff classification. [Signatures] * Language of the case: Romanian. © European Union The source of this judgment is the Europa web site. The information on this site is subject to a information found here: Important legal notice . 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