Judgment of the General Court (Second Chamber, sitting with five Judges) of 29 April 2026. – Hauptzollamt A v Scrap-Transporteur.

1

This request for a preliminary ruling concerns the interpretation of Article 5(1)(a) of Council Directive 2011/64/EU of 21 June 2011 on the structure and rates of excise duty applied to manufactured tobacco (OJ 2011 L 176, p. 24).

2

The request has been made in proceedings between Hauptzollamt A (Principal Customs Office A, Germany) (‘the customs office’) and Scrap-Transporteur concerning the seizure of goods transported to Germany in a vehicle belonging to Scrap-Transporteur.

3

Recitals 2, 3, 8, 9 and 15 of Directive 2011/64 state the following:

…

…

4

Article 2(1) of Directive 2011/64 provides:

‘For the purposes of this Directive manufactured tobacco shall mean:

…

5

Article 4(1) of Council Directive 2011/64 states:

‘For the purposes of this Directive the following shall be deemed to be cigars or cigarillos if they can be and, given their properties and normal consumer expectations, are exclusively intended to be smoked as they are …’

6

Under Article 5(1) of Council Directive 2011/64:

‘For the purposes of this Directive smoking tobacco shall mean:

7

Paragraph 1 of the Tabaksteuergesetz (Law on tobacco tax) of 15 July 2009 (BGB1. 2009 I, p. 1870), as amended by the Fünftes Gesetz zur Änderung von Verbrauchsteuergesetzen (Fifth Law amending the laws on excise duty) of 21 December 2010 (BGB1. 2010 I, p. 2221), provides as follows:

‘(1)   Manufactured tobacco shall be subject to tobacco tax within the tax territory … Tobacco tax is a tax on consumption within the meaning of the tax code.

(2)   Manufactured tobacco shall mean:

…

…’

8

B, a company established in a Member State, mixes unprocessed tobacco leaves of the Flue Cured Virginia variety, before stripping and packaging them in packages of different sizes. B sent to C, a company established in Germany, seven boxes of those tobacco leaves with a total weight of 1225 kilograms, which were seized by the Zollfahndungsamt (Customs Inspection Service, Germany) on 7 February 2017. Those goods, intended for D, another company established in Germany, to be used in the manufacture of water-pipe tobacco, were on board a van driven by the authorised agent of C, Scrap-Transporteur.

9

The Customs Inspection Service initiated an investigation into Scrap-Transporteur, suspecting that tax evasion had been committed. During questioning, Scrap-Transporteur specified that the seized goods were not smoking tobacco, but of raw tobacco intended to be processed in Germany into water-pipe tobacco.

10

The Bildungs- und Wissenschaftszentrum der Bundesfinanzverwaltung (Education and Science Centre of the Federal Revenue Administration, Germany) analysed a sample of the seized goods and concluded that they consisted of scraps of tobacco, that is to say of pieces of raw tobacco leaves that were neither flavoured nor processed, obtained during the threshing of tobacco leaves and suitable for consumption, including through use in a pipe or as the filler for hand-rolled cigarettes. That tobacco, of which only a small part needed to be split using a garden shredder, could be smoked in a water pipe following thermal treatment with water, glycerine and sugar, before being mixed with pipe-tobacco flavouring. According to those conclusions, the processing steps could be carried out by the end consumer, with the help of instructions available online. Lastly, from the customs tariff perspective, those scraps had to be considered to be tobacco refuse falling within heading 2401 of the Combined Nomenclature set out 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).

11

Consequently, the customs office determined the amount of tobacco tax owed by C and Scrap-Transporteur, who were found to be jointly and severally liable. Scrap-Transporteur filed an objection to that determination, providing an expert’s report stating that the seized goods consisted of high-quality raw tobacco, capable of being processed into water-pipe tobacco or into other forms of tobacco.

12

After its objection was dismissed, Scrap-Transporteur brought an action before the Finanzgericht (Finance Court, Germany), which had jurisdiction to rule on the case and which upheld that action. An expert appointed by that court found that the moisture content of 6.9% on average was characteristic of raw tobacco and that it could not be smoked without prior industrial treatment. Consequently, the Finanzgericht (Finance Court) held that the seized goods consisted of raw, unprocessed tobacco and were therefore not subject to tobacco tax.

13

The customs office brought an appeal on a point of law against the judgment of the Finanzgericht (Finance Court) before the Bundesfinanzhof (Federal Fiscal Court, Germany), which is the referring court.

14

In view of the uncertainties concerning the classification of the product as tobacco ‘which … is capable of being smoked without further industrial processing’, within the meaning of Article 5(1)(a) of Directive 2011/64, the Bundesfinanzhof (Federal Fiscal Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘1.   Is the concept “tobacco which … is capable of being smoked” in Article 5(1)(a) of [Directive 2011/64] to be interpreted as meaning that such capability exists only in the case of products which, in accordance with public perception, are smoked?

2.   Is the concept “without further industrial processing” in Article 5(1)(a) of Directive 2011/64 to be interpreted as also including more complex methods which consumers can use at home?’

15

By its first question, the referring court asks, in essence, whether Article 5(1)(a) of Directive 2011/64 must be interpreted as meaning that the assessment of whether a product is ‘capable of being smoked’ should be based on the perception of the public.

16

In accordance with Article 5(1)(a) of Directive 2011/64, ‘tobacco which has been cut or otherwise split, twisted or pressed into blocks and is capable of being smoked without further industrial processing’ is a type of ‘smoking tobacco’.

17

As regards the expression ‘capable of being smoked’, it should be recalled, at the outset, that the terms of a provision of EU law which makes no express reference to the law of the Member States for the purpose of determining its meaning and scope must normally be given an autonomous and uniform interpretation throughout the European Union; that interpretation must take into account the wording of that provision, its context and the objectives pursued by the rules of which it forms part (see judgment of 24 October 2024, Kwantum Nederland and Kwantum België, C‑227/23, EU:C:2024:914, paragraph 56 and the case-law cited).

18

In the first place, it must be stated that the wording of Article 5(1)(a) of Directive 2011/64 makes no reference to the perception of consumers for the purpose of classifying a product as ‘smoking tobacco’. Accordingly, it follows from the expression ‘capable of being smoked’ that it means that the product can be smoked in the sense that the heating and burning of that product produces smoke to be inhaled (see, to that effect, judgment of 16 September 2020, Skonis ir kvapas, C‑674/19, EU:C:2020:710, paragraph 34). It follows that the expression ‘capable of being smoked’ does not lay down a criterion relating to the perception of consumers.

19

In the second place, that interpretation is supported by the context of Article 5(1)(a) of Directive 2011/64. Accordingly, Article 4(1) of that directive provides that tobacco products are deemed to be ‘cigars or cigarillos’ if they ‘can be and, given their properties and normal consumer expectations, are exclusively intended to be smoked as they are’. By contrast, as is apparent from paragraph 18 above, such a condition relating to the normal expectations of consumers is not mentioned in Article 5(1)(a) of that directive. Since the two provisions are part of the same chapter of the same directive, the legislature could have added the criterion relating to the normal expectations of consumers or to public perception to Article 5(1)(a) of Directive 2011/64 if it had wished to confer such a meaning on that provision.

20

In the third place, it is apparent from recital 3 of Directive 2011/64 that the directive seeks to ensure that the application in Member States of taxes affecting the consumption of products in the manufactured tobacco sector does not distort conditions of competition and does not impede their free movement within the European Union. In particular, it is stated, in essence, in recital 8 of that directive, that products which are similar in many respects to products covered by that directive are to be treated in the same way in the interests of uniform and fair taxation, while recital 9 of the directive states that harmonisation of excise duty structures must result in competition in the different categories of manufactured tobacco belonging to the same group not being distorted by the effects of the charging of the tax and, consequently, in the opening of the national markets of the Member States (see, to that effect, judgment of 6 April 2017, Eko-Tabak, C‑638/15, EU:C:2017:277, paragraph 18).

21

Furthermore, it is apparent from recital 15 of Directive 2011/64 that ‘a certain degree of convergence between the tax levels applied in the Member States would help to reduce fraud and smuggling within the Union’. Lastly, according to recital 2 of Directive 2011/64, the aim of that directive is, inter alia, to ensure a high level of health protection.

22

The achievement of the abovementioned objectives requires that Article 5(1)(a) of Directive 2011/64 is not construed narrowly (see, to that effect, judgment of 6 April 2017, Eko-Tabak, C‑638/15, EU:C:2017:277, paragraph 24). An interpretation of that provision which takes account of the perception of consumers would be liable to limit the proportion of products which are classified as ‘smoking tobacco’ within the meaning of Directive 2011/64 and to affect the level of health protection envisaged by that directive in that those products would not, as the case may be, be taxed in the same way. As regards, lastly, the harmonisation of tobacco categories in order to protect competition, to ensure the free movement of goods and to prevent fraud, the perception of consumers is a criterion which is likely to vary depending on the Member State concerned and which risks undermining that harmonisation.

23

Accordingly, the answer to the first question is that Article 5(1)(a) of Directive 2011/64 must be interpreted as meaning that the assessment of whether a product is ‘capable of being smoked’ should not be based on the perception of the public.

24

By its second question, the referring court asks, in essence, whether Article 5(1)(a) of Directive 2011/64 must be interpreted as meaning that the expression ‘without further industrial processing’ also encompasses multi-stage methods that consumers can, however, carry out at home.

25

Concerning the concept of ‘industrial processing’ used in Article 5(1)(a) of Directive 2011/64, that concept commonly refers to the processing, usually on a large scale and by a standardised process, of raw materials into tangible goods (judgment of 6 April 2017, Eko-Tabak, C‑638/15, EU:C:2017:277, paragraph 30).

26

It follows from the case-law of the Court that simple handling intended to render an unfinished tobacco product capable of being smoked is not covered by the concept of ‘industrial processing’ within the meaning of Article 5(1)(a) of Directive 2011/64 (see, to that effect, judgment of 6 April 2017, Eko-Tabak, C‑638/15, EU:C:2017:277, paragraph 31 and the case-law cited).

27

In those circumstances, manufactured tobacco which is ready, or can easily be made ready, by non-industrial means, to be smoked must be considered to be capable of being smoked without ‘further industrial processing’ within the meaning of Article 5(1)(a) of Directive 2011/64 (judgment of 6 April 2017, Eko‑Tabak, C‑638/15, EU:C:2017:277, paragraph 32). However, the relative complexity of a preparation process cannot, in itself, be sufficient to confer an industrial character on it within the meaning of Article 5(1)(a) of Directive 2011/64.

28

In the case at issue in the main proceedings, the steps for making tobacco ready to be smoked are not limited to inserting a roll of tobacco into a cigarette tube (see, to that effect, judgment of 6 April 2017, Eko-Tabak, C‑638/15, EU:C:2017:277, paragraph 31 and the case-law cited). In that connection, the referring court states that the product at issue can be smoked following treatment that a consumer can carry out at home. The tobacco at issue has undergone an initial drying process and must then be kept in a state of controlled humidity. Furthermore, the product must then be brought to the boil with water, glycerine and sugar and mixed with the usual flavouring mix for water-pipe tobacco. According to the referring court, instructional videos are available online.

29

In the present case, first, the various steps of processing of the product described by the referring court, namely boiling with water, glycerine and sugar and mixing with flavouring, do not require any standardised process. Second, the fact that detailed instructions for consumers on carrying out those steps are freely available online confirms that that process is different from industrial processing within the meaning of the case-law cited in paragraph 25 above.

30

Subject to verification by the referring court, those are methods that consumers can carry out at home and which do not require the capacity to process large quantities of tobacco using standardised processes.

31

Accordingly, the answer to the second question is that Article 5(1)(a) of Directive 2011/64 must be interpreted as meaning that the expression ‘without further industrial processing’ encompasses multi-stage methods that consumers can, however, carry out at home.

32

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 GENERAL COURT (Second Chamber, sitting with five Judges)

hereby rules: