Judgment of 6 September 2018 in case C-471/17 (Kreyenhop & Kluge GmbH & Co. KG) regarding the customs tariff and classification of fried instant noodles.
Redaction: I thought about “Mom’s spaghetti” when I read this case. It’s a customs case, not VAT, but still an enjoyable read.
Facts (simplified):
- Kreyenhop & Kluge imported different instant noodle dishes into the EU, using CN tariff code 1902 30 90 (which is used for pasta other than dried pasta).
- The dishes were packaged in 60 gram plastic packs consisting of a block of instant fried noodles and one or more plastic sachets containing spices, paste, oils or dried ingredients. The pre-cooked noodles had, after being fried, a fat content of about 20%. According to the ‘preparation example’ on the package, approximately 320 ml of boiling water should be poured over the contents of the package placed in a container. The referring court specifies that, even if, according to the indications on the packaging, the noodles are prepared in soup when water is added, they may also be consumed without further preparation, like potato chips.
- The Customs Authorities did not accept the classification used by Kreyenhop & Kluge, and instead levied customs duties on the basis of CN subheading 2104 10 00 (which is used for ‘Soups and broths and preparations therefor’).
- During the procedure, the European Commission adopted an Implementing Regulation (No 767/2014), under which instant noodle dishes, comparable to those at issue in the present case, were classified not as soups or broths (CN heading 2104) but as pasta, falling under CN heading 1902.
- Within that latter heading, the implementing regulation classified those instant noodle dishes as being ‘dried’, falling within CN subheading 1902 30 10.
- Subsequently, the customs authorities, fixed a customs duty for the products in question on the basis of CN subheading 1902 30 10.
- Kreyenhop & Kluge did not agree with tis, and wanted to stick to CN subheading 1902 30 90.
The question to be answered by the ECJ is:
‘Are fried noodles “dried” pasta within the meaning of CN subheading 1902 3010?’
Considerations:
31 (…) Regulation No 635/2005 is not directly applicable to the instant noodle dishes at issue in the main proceedings since, as they are not identical to the products covered by that regulation.
32 (…) if a classification regulation is not directly applicable to products which are not identical, but only similar to the product covered by that regulation, the latter is applicable by analogy to such products.
33 However, in order for a classification regulation to be applied by analogy, the products to be classified and those covered by that regulation must be sufficiently similar.
34 In the present case, however, the goods in question cannot be considered to be sufficiently similar, since Regulation No 635/2005 does not show whether the product consists of noodles which have been fried during their manufacture. However, it is precisely that characteristic which is decisive in the present case.
(…)
37 In the present case, it is accepted that the noodles in question are pasta, within the meaning of CN subheading 1902 30. It is therefore necessary to determine whether, under CN subheading 1902 30 10, pre-cooked and fried noodles may be considered to be dried.
38 In that regard, it should be noted that the term ‘dried’, as used in CN subheading 1902 30 10, is not defined. (…) The CN Explanatory Notes refers to frying as an example of ‘industrial drying’.
39 According to settled case-law, the meaning and scope of terms for which EU law provides no definition must be determined according to their meaning in everyday language whilst considering the context in which they occur and the purposes of the rules of which they form part.
(Red. this is the best part:)
40 The term ‘dried’, as used in CN subheading 1902 30 10, is the past participle of the verb ‘to dry’, which means, in particular, ‘make dry’ or ‘become dry’. According to its usual meaning in everyday language, the adjective ‘dry’ refers to that ‘which is not or is slightly impregnated with liquid’, but also which is ‘dehydrated’.
41 Therefore, since the manufacture of pasta involves necessarily, first of all, the use of liquid, pasta from which the moisture is extracted in the course of its manufacture in order to bring it to a dry state may, in general, be considered to be dried pasta. In contrast, in that regard the process by which that state has been reached is not decisive.
42 As regards the noodles at issue in the main proceedings, it is clear from the file before the Court that they are noodles which have been first pre-cooked (steamed) and then fried. Next, those noodles have been packed, in a dry state, in the form of small blocks. Therefore, since at the end of the production process the noodles have been packaged in a dry state, they should be considered to be ‘dried’ pasta, within the meaning of CN subheading 1902 30 10.
43 In contrast, the argument of the referring court and Kreyenhop & Kluge that the expression ‘dried’, as used in CN subheading 1902 30 10, must be understood as describing a product that has undergone a drying process in the strict sense of the term, cannot be accepted. According to them, the drying of food constitutes a means of preservation, which solely results in the extraction of moisture and which should be distinguished from cooking methods such as frying, which causes, in addition to the elimination of water, numerous complex chemical reactions. This is reflected in different CN subheadings, which accordingly distinguish between preserved foods and prepared or cooked foods.
44 In that regard, it should first be pointed out that that interpretation of the term ‘dried’ does not find any basis in the wording of the CN.
Judgment:
Subheading 1902 30 10 covers instant noodle dishes, such as those at issue in the main proceedings, which are, in essence, composed of a block of pre-cooked and fried noodles.
(Red. In short – Kreyenhop & Kluge loses the case).
Source: Curia
