Commission Regulation No 1669/77 is based on Regulation No 97/69 of the Council for which the legal basis is, according to the recitals in the preamble to the amending regulation, Council Regulation No 280/77 (Official Journal L 40 of 1977, p. 1) inter alia, Article 28 of the EEC Treaty. Under that article any autonomous alteration or suspension of duties in the Common Customs Tariff is to be decided unanimously by the Council whilst the Commission has in this respect merely the right to submit proposals. In carrying out its tasks and in the context of Regulation No 97/69 the Commission is bound by the principles of Article 29 of the Treaty which lays down first that the Commission is to be guided by the need to promote trade between Member States and third countries. It must not abuse its power of elucidation to adopt, through the Common Customs Tariff, decisions relating to commercial policy in the context of the Common Agricultural Policy and the common organizations of the markets.

Regulation No 97/69 authorizes the Commission and the Committee on Common Customs Tariff Nomenclature which is provided for in Article 1 and is responsible for examining any matter concerning the nomenclature of the Common Customs Tariff only to adopt the provisions required for the application of the nomenclature. It is also clear from the recitals in the preamble to the regulation that those provisions are only to specify the content of the headings or subheadings of the Common Customs Tariff without amending the text thereof; it also shows the narrow framework within which the Commission must remain when it specifies the content of a tariff subheading. The judgment of the Court of 11 November 1975 in Case 37/75 (Bagusat v Hauptzollamt Berlin-Packhof [1975] 2 ECR 1339) does not affect that conclusion. That judgment refers only to classifications involving the solution of particularly technical questions for which the Commission must be given a wider discretion. That is not the case for the legal application of tariff heading 02.02 to products such as those in question. Such a question presents no difficulties of a technical nature but must be resolved by interpreting the term offals in respect of which the Commission has no discretion.

The recitals in the preamble to Regulation No 1669/77 on the other hand give the impression that the Commission is claiming for itself the power to determine arbitrarily what products should be classified under one or other of the tariff subheadings in question: poultry cuts (B) or offals (C). It does not even take the trouble to define in a more detailed manner the term offals in order to determine, on the basis of the definition of that word, whether meat scraped from the carcass falls within that subheading: that in itself constitutes a serious formal defect in Regulation No 1669/77. In accordance with the recitals in the preamble to that provision the Commission drew bone scrapings within tariff heading 02.02 B by means of tariff subheading 02.02 B II (c) and then classified them under tariff subheading 02.02 B I. Such a course does not amount to specifying the content of tariff subheadings 02.02 C and 02.02 B I but a reclassification which goes beyond the powers conferred by Article 3 of Regulation No 97/69.

In the penultimate recital in the preamble to Regulation No 1669/77, furthermore, the Commission is guilty of two inexactitudes. First small pieces which result from the cutting up of larger cuts do not undoubtedly, as the Commission states, fall within subheading 02.02 B I. In fact that subheading covers boned or boneless poultry meat, for example meat from the breast or the thighs of turkeys, that is to say poultry meat which has retained its structure. Secondly both from the point of view of the quality and the possible uses, there is a considerable difference between the parts of meat from prime cuts and those obtained by scraping the carcass or those which contain fibrous, gristly and fatty tissue. It is not possible for such a difference to be bridged over for the purposes of the customs tariff by means of specification by the Commission in particular when, by means of such a specification the Commission suddenly classifies edible offal in a tariff heading which entails a roughly 700 % higher levy and leads to unacceptable losses on past imports and the cessation of future imports.

Even if it is assumed that the Commission has a wide discretion it cannot reasonably be held that the Council wished to confer such powers on the Commission by means of Regulation No 97/69.

For those reasons the answer should be given to the first question that Regulation No 1669/77 is invalid because it infringes Regulation No 97/69.

If Regulation No 1669/77 is however valid it cannot be recognized as having retroactive effect without serious inconveniences arising with regard to vested rights acquired under a different tariff classification at least in certain Member States.

The case-law of the Court of Justice against the retroactivity of regulations adopted by the Commission in the context of its powers under Regulation No 97/69 is based on the desire to safeguard the principle of legal certainty and the principle of the protection of the legitimate expectation of traders, and the need to ensure, for the future, uniform tariff classification throughout the Community.

The two said principles would, however, be seriously disregarded if explanatory regulations on the tariff adopted by the Commission in the context of Regulation No 97/69 also had retroactive effect with regard to already established situations. The resultant difficulties would be not only of a legal nature, at both national and Community level, but also of a political nature.

Furthermore, in the present instance such retroactivity is inadmissible for the further reason that it is provided in Article 2 of Regulation No 1669/77 that the regulation is to enter into force on the 21st day following its publication. In that way the regulation thus lays down, at least indirectly, a transitional system to enable existing contracts to be performed and in particular to allow goods being shipped by sea to be given customs clearance. The said Article 2 is therefore full proof of the legislative nature of the regulation. It shows in fact that during the transitional period the Commission expressly decided not to seek the uniform application of Article 1 throughout the Community.

The answer to the second question must therefore be that Regulation No 1669/77 entered into force only on the 21st day following its publication and that, consequently, the courts and authorities of the Member States are not obliged to apply it to imports before that date.

A first criterion for drawing a distinction between the tariff subheadings is contained in the wording itself of the descriptions of the goods. The wording of subheading 02.02 B refers to Poultry cuts (excluding offals) which may be boned or boneless (I) or unboned (bone-in) (II). As regards the latter it is clear from the list contained under entries (a) to (e) that the products covered thereby are poultry cuts which may be identified and described by objective characteristics and the meat of which retains its original structure. The determinative factor in this respect is the quality of the product, determined having regard to the way in which the product has been obtained, its shape, its size and weight. What cannot be regarded as a special poultry cut and is none the less edible should therefore be classified as offals within the meaning of subheading 02.02 C. In that case they are not pieces of meat which have retained their original structure but pieces of meat of varying origins and of inferior quality.

Another distinguishing criterion is derived from the way in which the product is obtained. From this point of view offal is clearly distinguished from poultry cuts by the fact that it only arises when the prime poultry cuts have already been removed.

Finally, the distinction between the two tariff subheadings may also be based on the use to which the product is to be put. From the point of view of use edible offals are only used for processing and cannot be sold to the ultimate consumer through the retail trade.

The trade value of the product is not a valid distinguishing criterion. The trade value is determined by supply and demand which are anything but objective criteria.

In view of the above the pieces of poultry meat as described in the order of the German court should therefore be classified under subheading 02.02 C covering offals. Nevertheless it is for the national court to make the final decision on that classification in reliance on criteria, such as those set out above, laid down by the Court of Justice.

The case-law of the Court does not support the application of different criteria depending on whether the tariff classification is for the imposition of customs duties or of charges under the common organization of the markets.

Article 11 of Regulation No 2777/75 on the common organization of the market in poultry meat clearly shows that the Common Customs Tariff is decisive primarily for the tariff classification of goods falling under that organization of the market for the imposition and calculation of the levy and of the monetary compensatory amounts. According to the case-law of the Court, in interpreting a tariff heading in comparison with another account must be taken not only of its purely customs function: in cases of doubt regard must also be had to the function of the tariff having regard to the requirements of the common organization of the markets.

No criteria concerning the common organization of the markets are to be drawn from Regulation No 1669/77 itself. Regulation No 2777/75 introduced levies with a twofold purpose: to take account both of the incidence on feeding costs of the difference between prices for feed grain within the Community and on the world market, and of the need to protect the Community processing industry.

Sufficient account is taken of those two objectives by reason of the fact that the lowest levy is imposed on offals and, for example, on backs, necks, rumps and wing tips. Sufficient account is thereby taken of the need to protect the common market in poultry. Classification of the offals in question under tariff subheading 02.02 B I, to which the highest levy is applicable, with the result that imports of offal, the commercial value of which is in principle low, would cease, would be an abuse and contrary to the objectives of Articles 39 and 110 and of Article 29 of the Treaty.

Regulation No 2777/75 authorized the Commission at most to impose a higher levy on offals taking account of the average ratio between market values (Article 5) but in the course of the period in question the necessary conditions for this were apparently not satisfied.

For the above reasons the reply to the fourth question should be that in interpreting one tariff heading in comparison with another account may be taken, alongside their customs function, of the requirements of the common organization of the markets. The tariff classifications should not give rise to abuses in order to exclude certain goods from importation by misusing provisions laid down in the framework of the organization of the market.

According to the Commission the legislative nature of this regulation is clear from the fact that its entry into force deprived the national authorities of the power which they had held until that time, to interpret the nomenclature independently in its application to individual cases, and imposed a legal obligation for them to comply with the prescribed result.

Furthermore, having regard to the fact that the tariff classification is always made pursuant to the provisions applying at the time of the importation the Court has excluded the possibility that a regulation such as the one in question may also have binding effects with regard to the classification of goods imported before its entry into force. The Finanzgericht Münster is therefore not legally obliged to comply with this regulation in the main proceedings.

None the less, whilst it is true that the Finanzgericht should classify the products in question in reliance on the general methods and principles relating to the application of the Common Customs Tariff, the fact remains that the content of Regulation No 1669/77 constitutes an authorized commentary, issued by the institution which drew up and formulated the tariff subheadings in question. It is for that reason that, even if it does not have binding force, the said regulation remains an extremely valuable means of interpreting the customs tariff correctly so that the Finanzgericht cannot dispense with it any more than with the other official explanatory documents and it cannot dispense with an evaluative assessment of it on the ground that it has no retroactive effect. The question whether that regulation interpreted the customs tariff correctly is unrelated to the question whether the interpretation set out therein is retroactive.

It is also not possible to infer from the adoption of Regulation No 1669/77 that all turkey cuts imported prior to it should necessarily and automatically be classified not as poultry cuts but as offals. Provisions adopted pursuant to Regulation No 97/69, such as those of Regulation No 1669/77, cannot and do not seek to amend the scope of existing tariff provisions. They merely provide a commentary on the tariff subheadings in question and establish definite and binding criteria for the correct classification of the products in question.

With regard finally to the significance of the delay of 21 days after publication for the entry into force of the regulation, the Commission argues that the period was laid down to enable the Member States to inform all their customs departments. In this respect no account was taken of economic or commercial considerations, particularly as the customs authorities had already for a long time acted in accordance with the provisions of Regulation No 1669/77.

First it may be inferred from the wording and the structure of tariff heading 02.02 that the distinction between poultry cuts and offals must be based on the objective characteristics and the appearance of the goods at the time of importation. The wording of the customs tariff makes no provision for different classification of the same product depending on the method of production or the use.

Furthermore, the term Poultry cuts: Boned or boneless may be compared with that of meat used in tariff heading 02.01, Meat and edible offals …, as has in fact been done in the relevant explanatory notes.

Regarding the definition of offal the examples given in the above-mentioned explanatory notes give some guidance inasmuch as the parts which are not expressly mentioned but which are similar and comparable to those which are mentioned may be assimilated to them. Large pieces of muscle tissue do not satisfy that condition.

For the purposes of Regulation No 1669/77 a general and exhaustive definition of the terms poultry cuts and offals was not necessary as that regulation is based on the fact that for tariff purposes large pieces of muscle tissue are nothing other than poultry meat.

In consequence therefore both as regards the result obtained and the reasons relating to the customs tariff on which it is based Regulation No 1669/77 does not go beyond the limits set by Regulation No 97/69 and is therefore valid.