The General Court ruled that raw tobacco scrap processable at home into hookah tobacco falls within EU tobacco excise law, even when preparation involves boiling, glycerine, and flavouring, closing a route traders used to avoid duties
The General Court closed a tobacco excise duty loophole in Scrap-Transporteur (Case T-194/25), the court answered two questions referred by Germany’s Bundesfinanzhof about raw tobacco scrap under Council Directive 2011/64/EU. The case arose from a German customs seizure of uncut tobacco leaf in transit. The trader argued the product was not yet smokeable, so no excise duty applied. The court disagreed on both questions.
The product was dried, threshed tobacco leaf, beaten and stripped but uncut. To become hookah tobacco, it needed boiling with water, glycerine, and sugar, then mixing in hookah flavouring. Tutorial videos showing consumers how to do this were freely available online, with the trader’s position being that this multi-step process counted as “industrial transformation”, placing the product outside the tobacco excise scope until a manufacturer completed it.
The first question asked whether consumer perception determines if a product is “capable of being smoked”. The court said no, as consumer perception varies across Member States. Relying on it would undermine the uniform application of the directive.
The second question asked whether home preparation steps, even complex multi-step ones, constitute “industrial transformation”. The court ruled they do not, as industrial transformation requires a large-scale standardised process. Complexity alone does not make a domestic process industrial. The relevant question is whether the steps require industrial capacity to process large volumes by standardised methods. Boiling tobacco with glycerine and sugar at home does not cross that line, as the online tutorials confirmed that ordinary consumers could complete the process without specialist equipment.
The ruling builds on the Court of Justice’s 2017 judgment in Eko-Tabak (C-638/15), which found that easy manipulations rendering a tobacco product smokeable fall within the excise scope. Scrap-Transporteur extends that logic to more involved preparations. The line between industrial and domestic is drawn by scale and standardisation, not by complexity or step count.
Customs and excise practitioners across the EU now have a clear answer, as any unfinished tobacco material that consumers can bring to a smokeable state at home, regardless of effort, falls within the tobacco excise duty net. The Bundesfinanzhof will apply this interpretation to the original seizure. The import route that traders used by framing remaining preparation as “industrial” is closed.
