Judgment of the Court (Sixth Chamber) of 17 May 1990.
Directeur général des douanes et des droits indirects v Powerex-Europe.
C-66/89 • ECLI:EU:C:1990:212 • 61989CJ0066
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Directeur général des douanes et des droits indirects v Powerex-Europe.
Common Customs Tariff - Tariff headings - Complete or finished semiconductor device within the meaning of subheading 85.21 D II - Silicon discs which have not undergone the operations necessary to confer on them the essential characteristics of a semiconductor device - Excluded
( Commission Regulation No 1203/86 )
Regulation No 1203/86 on the classification of goods falling within subheading 85.21 D II of the Common Customs Tariff must be understood as not applying to silicon discs which have to undergo extensive treatment after importation, in particular selective diffusion by irradiation under an electron beam followed by a process of mounting or encapsulation . Such discs lack the essential characteristics of a complete or finished semiconductor device, which is the type of product referred to by that regulation .
In Case C-66/89
REFERENCE to the Court under Article 177 of the EEC Treaty by the tribunal d' instance ( District Court ) of Le Mans for a preliminary ruling in the proceedings pending before that court between
Directeur général des douanes et des droits indirects
on the interpretation of Commission Regulation ( EEC ) No 1203/86 of 23 April 1986 on the classification of goods falling within subheading 85.21 D II of the Common Customs Tariff ( Official Journal 1986, L 108, p . 20 ),
THE COURT ( Sixth Chamber )
composed of : C . N . Kakouris, President of Chamber, F . A . Schockweiler, G . F . Mancini, T . F . O' Higgins and M . Diez de Velasco, Judges,
Advocate General : M . Darmon
Registrar : J . A . Pompe, Deputy Registrar
after considering the observations submitted on behalf of
the defendant in the main proceedings, by François Girard, of the Paris Bar,
the French Government, by Edwige Belliard and Géraud de Bergues, acting as Agents,
the Commission, by Guido Berardis, acting as Agent,
having regard to the Report for the Hearing and further to the hearing on 6 February 1990,
after hearing the Opinion of the Advocate General delivered at the sitting on 7 March 1990,
gives the following
1 By a judgment of 24 February 1989, which was received at the Court on 6 March 1989, the tribunal d' instance of Le Mans referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty three questions concerning the interpretation of Commission Regulation ( EEC ) No 1203/86 of 23 April 1986 on the classification of goods falling within subheading 85.21 D II of the Common Customs Tariff ( Official Journal 1986, L 108, p . 20 ).
2 Those questions were raised in proceedings between the directeur général des douanes et des droits indirects ( Director-General of Customs and Indirect Taxes ) and the Powerex-Europe company which concerned the tariff classification of silicon discs imported by the company between 16 May and 14 September 1986 .
3 Powerex-Europe imported into France from the United States silicon discs which, following a number of processes, were to be turned into semiconductor devices . The goods imported are of two types, A and B, which correspond to two distinct degrees of finishing and are introduced at different stages in the company' s production cycle . The discs were subjected to thermal diffusion in the United States, after which they were soldered to a molybdenum support . Items corresponding to type B also have a bevelled edge which is obtained by polishing the surface of the silicon disc . This bevelled edge is itself covered by an insulating varnish and this process also is fully completed prior to importation into France .
4 The importing company declared those goods to the customs authorities as parts of semiconductors, corresponding to tariff subheading 85.21 E of the Common Customs Tariff and subject accordingly to a customs duty of 5.8 %. The French customs authorities, relying on Regulation No 1203/86, decided that the imported goods came within tariff subheading 85.21 D II which covers "diodes, transistors and similar semiconductor devices" and gives rise to a duty of 17%, since they took the view that the goods did not correspond to parts but rather to items which were almost in a finished state and had the essential characteristics of the completed product . On that basis, the customs authorities requested back payment of the customs duty corresponding to the difference between the duty which in their view ought to have been paid and that which was in fact paid .
5 The importing company appealed against that classification to the tribunal d' instance of Le Mans . That court commissioned an expert report and, taking the view that there was uncertainty as to the tariff classification of the goods in question, stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling :
"( 1 ) Do the two categories of items imported by Powerex-Europe, the qualities and characteristics of which were described by the expert Mr Camus in his report dated 29 December 1988 drawn up after hearing the parties, fall within the scope of Regulation ( EEC ) No 1203/86 of 23 April 1986?
( 2 ) If Question 1 is answered in the affirmative, must that regulation be declared invalid for the reasons put forward by Powerex-Europe?
( 3 ) If Question 2 is answered in the affirmative, does the decision annulling the regulation affect imports made before the judgment was given?"
6 Reference is made to the Report for the Hearing for a fuller account of the facts in the main proceedings, the relevant legislation and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court .
7 In its first question, the national court is in substance seeking to ascertain whether Regulation No 1203/86 must be interpreted in such a way that it applies to the two categories of goods imported by Powerex-Europe .
8 To answer that question, it is first necessary to point out that the regulation in dispute covers, according to the first and third recitals in its preamble, silicon discs which have undergone selective diffusion whereby discrete zones are formed, mounted on a molybdenum support, which, although not provided with terminals, leads or a housing, already in their present form constitute semiconductor devices . Article 1 of the regulation classifies silicon discs which present such characteristics under subheading 85.21 D II .
9 Next, it is necessary to bear in mind General Rule of Interpretation 2(a ) of the Convention on Nomenclature for the Classification of Goods under the Common Customs Tariff which provides that "any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as imported, the incomplete or unfinished article has the essential character of the complete or finished article ".
10 In this connection, it is first of all necessary to define the essential characteristics of a semiconductor device . It would appear from the expert report commissioned by the national court and from the observations made during the hearing that such devices have two essential characteristics . The first is that they are one-directional, that is to say that electricity can pass from one side to another, but cannot pass in the opposite direction . The second characteristic is that a person who uses such a device must be in a position to regulate the power and intensity of electrical fluxes which pass in one direction and must also be able to turn them off .
11 It is then necessary to determine the point at which a silicon disc performs the essential electrical functions of a complete or finished semiconductor device as described above .
12 As is clear from the expert report, it is necessary in this connection to point out that the silicon disc can act as a conductor only if certain impurities are injected into it . These are the impurities or dopants which make it possible for electricity to pass from one side of the disc to the other . Two methods exist for injecting such impurities : thermal diffusion and diffusion by irradiation under an electron beam ( dopage ).
13 Under the first method, the necessary impurities are injected into the silicon discs . From that moment, it is possible to make a current flow through the discs, although the procedure for so doing cannot be adequately controlled, since it is neither possible to regulate the electrical power nor determine the moment at which the current ceases to flow . The second method consists of the selective introduction of an adequate dopant . Under this method, the silicon is bombarded with electrons at very high speed . This procedure makes it possible to regulate precisely the energy and the electron flux and to adjust the dopage effect, something which is not possible using thermal diffusion alone .
14 It follows therefore that the selective diffusion referred to in the regulation in question is that which enables a silicon disc to acquire the essential characteristics of a complete or finished semiconductor device, namely diffusion by irradiation under an electron beam . Such a disc therefore, although not provided with terminals, leads or a housing, must as such be classified under subheading 85.21 D II, pursuant to General Rules of Interpretation 1 and 2(a ) of the Convention on Nomenclature .
15 This interpretation of the concept of selective diffusion is consistent with that which derives from Commission Regulation ( EEC ) No 288/89 of 3 February 1989 on determining the origin of integrated circuits ( Official Journal 1989, L 33, p . 23 ), the third recital in the preamble to which provides that "diffusion in this context shall be defined as the process whereby integrated circuits are formed on a semiconductor substrate by the selective introduction of an appropriate dopant ".
16 It is consequently necessary each time to ascertain whether the items which it is intended should form part of the semiconductor device already in their present state have the essential characteristics of a complete or finished semiconductor device, that is to say, whether they have already undergone selective diffusion by irradiation under an electron beam prior to their importation .
17 It follows from the foregoing considerations that silicon discs which are required after importation to undergo extensive treatment, in particular selective diffusion by irradiation under an electron beam followed by a so-called process of mounting or encapsulation, do not have the essential characteristics of semiconductor devices as defined under subheading 85.21 D II and for that reason do not come within the scope of Regulation No 1203/86 .
18 The answer to the first question must therefore be that Regulation No 1203/86 must be interpreted as meaning that it does not apply to silicon discs which must undergo extensive treatment after importation, in particular selective diffusion by irradiation under an electron beam followed by a process of mounting or encapsulation .
19 In view of the answer given to the first question, it is not necessary to answer the second and third questions, which were to be answered only if the goods in question should come within the scope of Regulation No 1203/86 .
Decision on costs
20 The costs incurred by the French Government and by the Commission of the European Communities, which submitted observations to the Court, are not recoverable . Since these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court .
On those grounds,
THE COURT ( Sixth Chamber ),
in answer to the questions referred to it by the tribunal d' instance of Le Mans, by a judgment of 24 February 1989, hereby rules :
Commission Regulation ( EEC ) No 1203/86 of 23 April 1986 on the classification of goods falling within subheading 85.21 D II of the Common Customs Tariff must be interpreted as meaning that it does not apply to silicon discs which must undergo extensive treatment after importation, in particular selective diffusion by irradiation under an electron beam followed by a process of mounting or encapsulation .