A customs broker has submitted import declarations with description " dried garlic", "garlic" or " white garlic" for Combined Nomenclature ("CN")-code 0712 90 90 (dried vegetables). After the garlic had been released, the garlic had been transferred and stored in a warehouse in which the garlic was stored at a cool temperature.
The Tax Collector performed an administrative control after the consignments had been released and took several documents along with him. The Tax Collector is of the opinion that the garlic has to be classified in CN-code 0703 20 00 (garlic fresh or chilled) amongst others on the basis of these administrative documents. After the assessments had been issued the Tax Collector took samples of the consignments garlic that were still stored in the warehouse. The Tax Collector used the results of these samplings in the administrative and appeal procedure.
Appeal Procedure Court of Amsterdam
The Court of Amsterdam ruled that at the time of the sampling at the warehouse part the garlic was not present anymore and that it was not excluded for the consignments that were still present that they have been altered while being stored for a long period such that the requirements of Article 78 of the Regulation (EC) 2319/92 ("Community Customs Code, "CCC") are not met. The Court of Amsterdam ruled that the Tax Collector had not made plausible otherwise that the garlic had to be classified in CN code 0703 20 00. Therefore, the garlic had to be classified in CN-code 0712 90 90.
Dutch Supreme Court
The Dutch State Secretary of the Ministry of Finance ("State Secretary") gave notice of appeal to the judgment of the Court of Amsterdam. The Secretary maintains that the garlic has to be classified in CN-code 0703 20 00, because the spherical garlic balls are not sufficiently dried pursuant to heading 0712 of the Harmonised System ("HS"). That is only the case if the garlic has the format of flocks or powder which is not the case for the garlic concerned.
The Dutch Supreme Court raises the question in which HS-heading vegetables (garlic) have to be classified that are dried but for which the natural water content is not (nearly) removed, in other words what is the meaning of "dried" as stipulated in HS-heading 0712? The Dutch Supreme Court notes that the wordings of HS-heading 0712 do not give any indication as to the degree of drying. Moreover, HS-heading 0712 does not stipulate how much natural water has to be removed at least from the vegetables.
The Dutch Supreme Courts notes that on the one hand the explanatory motes of the World Customs Organisation ("WCO") on HS-heading 0712 support the interpretation that only vegetables are to be classified in that heading for which the natural water content is (nearly) removed. On the other hand, pursuant to the explanatory notes of the WCO on HS-heading 0712 it is not merely excluded that vegetables that are not excessively dried such that all the natural water content is removed are to be classified in this heading even if they are imported in chilled condition with the purposes of being stored in good condition. It could be staid that these products by being dried to some extent are not in fresh condition such that classification in HS-heading 0703 is excluded and the fact that the vegetables are chilled do not alter that.
Taking into account these considerations, The Dutch Supreme Court has asked the following preliminary question to the European Court of Justice of the European Communities ("ECJ"):On the basis of which criteria has to be established whether vegetables (garlic) which have been dried to some extent, but for which the natural water content is not (nearly) removed and which have been imported in chilled condition are to be classified in either subheading 0703 20 00 of the CN or subheading 0712 90 90 of the CN?