ATO Interpretative Decision
ATO ID 2002/428 (Withdrawn)
Excise
Excise - Payments - Diesel Fuel Rebate Scheme - eligibility of a waste stream treatment as an activity for the purposes of 'mining operations'FOI status: may be released
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This ATO ID is withdrawn from the database because it contains a view in respect of the diesel fuel rebate provisions of the Excise Act 1901 and or the Customs Act 1901 that were repealed with effect from 1 July 2003. Despite its withdrawal from the database, this ATO ID continues to be a precedential view in respect of decisions for fuel purchased before 1 July 2003.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Does the recovery of an inorganic compound from a waste stream generated by a manufacturing process fall within the definition of 'mining operations' for the purposes of eligibility for the diesel fuel rebate in paragraph 78A(1)(a) of the Excise Act 1901 (Excise Act) and paragraph 164(1)(a) of the Customs Act 1901 (Customs Act)?
Decision
Activities involving treatment of a waste stream generated by a manufacturing process are not a 'mining operations' for the purposes of paragraph 78A(1)(a) of the Excise Act and paragraph 164(1)(a) of the Customs Act.
Facts
The applicant, in the performance of a contract with a manufacturer, undertakes treatment of wastes generated by the manufacturing process.
The treatment of the wastes results in the recovery of an inorganic compound through sedimentation and evaporation.
The applicant has submitted that the activities involved in the recovery of the inorganic compound constitute 'mining operations' for the purposes of the diesel fuel rebate scheme and that it is therefore entitled to the rebate.
Reasons for Decision
Under paragraph 78A(1)(a) of the Excise Act and paragraph 164(1)(a) of the Customs Act a rebate is payable to a person who purchases diesel fuel for use by him in 'mining operations'.
For the purposes of the diesel fuel rebate, 'mining operations' is defined in subsection 164(7) of the Customs Act. The lengthy definition contains a list of activities that are related to mining for minerals.
A review of judicial authority demonstrates the term 'mining operations' refers to the physical activities involved in dislodging and removing ore from the ground. The Full Federal Court has said that the definition of 'mining operations' in subsection 164(7) of the Custom Act 'progressively expands through the successive subparagraphs of subsection 164(7)'. It also stated that 'at all times, the concept of recovery of minerals is retained as the central point of reference': State Rail Authority of New South Wales v. Collector of Customs (1991) 33FCR 211.
In making its decision, the Full Federal Court had regard to its previous decision Collector of Customs v Cliffs Robe River Iron Associates (1985) 7 FCR 271. In this decision it stated that the subject matter of the definition in subsection 164(7) of the Customs Act is fuel purchased for use 'in mining operations' and that the relevant activities are those 'activities closely related to the extraction process'.
Although the wording of the definition has changed since it was last considered by the Full Federal Court, there has been no substantive change to the meaning of the term 'mining operations'. Also, the Full Court's findings were more recently followed by the Administrative Appeals Tribunal in Queensland Rail v. Chief Executive Officer of Customs, No Q97/897, 29 April 1998.
The activities involved in treatment of a waste stream generated by a manufacturing process do not fall within the definition of 'mining operations' as these activities are not closely related to the extraction of minerals from the ground.
Date of decision: 11 January 2002
Legislative References:
Excise Act 1901
section 78A
section 164
Case References:
Neumann Dredging Co Ltd v Collector of Customs (Qld)
(1987) 79 ALR 588
94 CLR 509 North Australian Cement Ltd v FCT
119 CLR 353 Chief Executive Officer of Customs v David Mitchell Ltd
[1999] FCA 1611 David Mitchell v Chief Executive Officer of Customs
[2001] FCA 294
Other References:
Macquarie Dictionary
Keywords
Diesel fuel rebate scheme
DFRS mining
ISSN: 1445-2782
| Date: | Version: | |
| 11 January 2002 | Original statement | |
| You are here | 8 January 2010 | Archived |