ATO Interpretative Decision

ATO ID 2002/733 (Withdrawn)

Excise

• This ATO ID is withdrawn from the database because it contains a view in respect of the diesel fuel rebate provisions of the Excise Act 1901 and or the Customs Act 1901 that were repealed with effect from 1 July 2003.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.

Issue

In relation to the Diesel Fuel Rebate Scheme, what is a 'sawmill' for the purposes of section 164(7) of the Customs Act 1901 (CA)?

Decision

For the purposes of section 164(7) of the CA, a 'mill' means a plant or factory fitted with machinery in which a specific process of manufacture is carried on. For a mill to be characterised as a 'sawmill', the sawing of timber must be the main or predominant process performed.

Facts

An applicant claimed a payment under the Diesel Fuel Rebate Scheme in respect of fuel which it purchased for use at a site operated by it, where timber is processed as follows:

(a)

Timber is received at the site in the form of flitches^[F1] from sawmills elsewhere and at the site it is milled, by the use of saws, into the required sizes; and

(b)

Timber is received at the site pre-cut to size from sawmills elsewhere and at the site it is kiln dried and dressed.^[F2]

The processing of flitches is the main operation carried on at the relevant site.

Reasons for Decision

The diesel fuel rebate is payable in respect of diesel fuel purchased for certain activities (see subsection 78A(1AA) of the Excise Act 1901 (EA) and corresponding subsection 164(1AA) of the CA).

One of the eligible activities is 'primary production' which includes 'forestry'.

The relevant definition of 'forestry' in section 164(7) of the CA refers to the term 'sawmill'.

In Re Wesfi Pty Limited and Collector of Customs (1984) 7 ALN N8, the Tribunal found that for the purposes of the diesel fuel rebate a 'sawmill' is a 'mill in which wood is converted from one form to another'.

The Wesfi definition was adopted in Re Brymay Forests Pty Limited and Collector of Customs Victoria (1985) 9 ALN N177. In that case the Tribunal noted that a 'mill' means a plant or factory fitted with machinery in which a specific process of manufacture is carried on and that for a mill to be characterised as a 'sawmill', the sawing of timber must be the main or predominant process performed.

In this case the milling of flitches, which is undertaken by the use of saws on the timber, is the main or predominant process performed. The site is therefore a 'sawmill' for the relevant purpose.

Legislative References:
Customs Act 1901
   section 164

Case References:
Re Wesfi Pty Limited and Collector of Customs
   (1984) 7 ALN N8

Keywords
Excise
Diesel Fuel Rebate Scheme - DFRS
Excise payments
Forestry

Business Line:  Excise

Date of publication:  31 July 2002

ISSN: 1445-2782