Australian National Railways Commission v Collector of Customs (SA)
[1985] FCA 409
•23 AUGUST 1985
Re: AUSTRALIAN NATIONAL RAILWAYS COMMISSION
And: COLLECTOR OF CUSTOMS, SOUTH AUSTRALIA (1985) 8 FCR 264
No. ACT G347 of 1984
Administrative Law - Customs and Excise
COURT
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Davies(1), Sheppard(2) and Burchett(2) JJ.
CATCHWORDS
Administrative Law - appeal from Administrative Appeals Tribunal - whether question of law
Customs and Excise - diesel fuel rebate - entitlement to rebate in carrying live-stock fertilizer and grain - whether carriage of live-stock an operation connected with rearing of live-stock - whether carriage of fertilizer an operation connected with cultivation of soil - whether carriage of grain an operation connected with gathering-in of crops
Customs Act 1901 (Cth) s.164
Excise Act 1901 (Cth) s.87A
Re Cliffs Robe River Iron Associates and Collector of Customs (1984) 2 AAR 219
Collector of Customs v Cliffs Robe River Iron Associates (No. WAG.110 of 1984, delivered 28 March 1985)
Hope v Bathurst City Council (1980) 144 CLR 1
Customs and Excise - Excise duty - Rebate on diesel fuel - Whether purchased for use by the purchaser in "primary production" - Defined to include "agriculture" - Carriage by rail of livestock - Of fertiliser - Of grain - Whether "agriculture" or operations connected with agriculture - Excise Act 1901 (Cth), s 78A - Customs Act 1901 (Cth), s 164.
HEADNOTE
Section 78A of the Excise Act 1901 (Cth) provides that a rebate of excise is payable to a person who purchases diesel fuel for use by him in mining operations or primary production. The applicable definition of primary production in s 164 of the Customs Act 1901 includes "agriculture" which in turn is defined as the cultivation of the soil, the cultivation or gathering in of crops and the rearing of livestock, together with other operations (including disease control) connected therewith.
The applicant claimed that such a rebate was payable in respect of diesel fuel used by trains transporting:
(i) livestock from one place of pasture to another (either in the course of disease control or to better pasture);
(ii) fertiliser from the point of manufacture to a landowner, a spreading contractor or the manufacturer's own country depot; and
(iii) grain from country silos to central points on the sea-board.
The Collector of Customs refused the rebate and the Administrative Appeals Tribunal upheld his refusal.
On appeal to the Full Federal Court,
Held: (1) Transport of stock in these circumstances was connected with their rearing and therefore fell within the definition of primary production.
(2) The transport of fertiliser was part of the manufacture and distribution process and the transport of grain a part of the marketing of produce which had been grown and harvested, and accordingly neither was a part of the process of cultivation and getting in of crops nor an operation connected therewith.
(3) The test of eligibility for the rebate is whether the persons who purchase the diesel fuel are persons who purchased it for use in the defined operations and not whether the purchasers are directly engaged in any of those operations. Accordingly, the rebate was available to an independent contractor who was not himself a primary producer.
(4) Per Davies J - The specific reference to transportation of certain types in the definitions of "mining operations" and "forestry" and the lack of reference to transportation in the definition of "agriculture" did not preclude appropriate transportation from falling within the ambit of the latter definition.
(5) The proper inquiry of the Tribunal should have included whether the applicant purchased diesel fuel for use by it in primary production, rather than simply whether the applicant engaged in some operations of primary production as defined. Per Davies J - An apportionment of bulk purchases may be appropriate. Per Sheppard and Burchett JJ - Specific cases of disallowance should have been referred to the Tribunal rather than the general hypothetical question which was considered but the question whether the generalised facts as found fell within the provisions of the statute was one of law rather than of fact and accordingly the court would review the decisions of the Tribunal.
Re Cliffs Robe River Iron Associates and Collector of Customs (1984) 2 AAR 219; Collector of Customs v. Cliffs Robe River Iron Associates (1985) 7 FCR 271; Hope v. Bathurst City council (1980) 144 CLR 1, referred to.
HEARING
Canberra, 1985, July 1; August 23. #DATE 23:8:1985
APPEAL
Appeal from a decision of the Administrative Appeals Tribunal as to the grant of a rebate of duty pursuant to s 78A of the Excise Act 1901 (Cth) and s 164 of the Customs Act 1901 (Cth).
J A Farmer, for the appellant.
Carriage of livestock for the purposes found is an operation connected with their rearing. The legislation is intended to encourage primary production, and should be liberally interpreted to achieve that purpose. The carriage of fertiliser to a user, a spreading contractor, or a country depot of the manufacturer is an "operation connected with the cultivation of the soil". The carriage of grain from silos to storage centres is an operation connected with the gathering of crops. In each case transportation is an essential step in attaining the proper husbanding of stock and the proper use of fertiliser and crops. The specific exclusion of public road transport indicates that other means of transport may fall within permissible operations.
P Buchanan QC and J Middleton, for the respondent.
The permissible operations are processes or activities performed on or to livestock, soil or crops as steps in the production of the finalised product of agriculture, not merely activities connected with or resulting from such operations. Transportation of stock may be connected with disease control, but is not thereby embraced within the definition of agriculture. The reference in the statute to certain transport activities indicates that the legislature did not see transport as connected with production. The transport of fertiliser is part of the operation of production and distribution of fertiliser, not a part of agriculture. Primary production of grain ceases at the silo and subsequent transportation relates to convenient storage and marketing of the grain. By analogy with coal, production is complete when the mineral is on the surface in disposable form. (R v. Drake-Brockman; Ex parte National Oil Pty Ltd (1943) 68 CLR 51; Commissioner of Taxation (Cth) v. Broken Hill Pty Co Ltd (1969) 120 CLR 240.)
Cur adv vult
Solicitors for the appellant: Macphillamy, Cummins & Gibson.
Solicitors for the respondent: Australian Government Solicitor.
CMH
ORDER
The decision of the Administrative Appeals Tribunal in so far as it relates to the applicant's claim respecting the carriage of live-stock be set aside and that matter be remitted to the Tribunal to be dealt with in accordance with law.
The decision of the Administrative Appeals Tribunal in so far as it relates to the applicant's claim respecting the carriage of fertilizer be affirmed.
The decision of the Administrative Appeals Tribunal in so far as it relates to the applicant's claim respecting the carriage of grain be affirmed.
The respondent shall pay one-half of the applicant's costs of the appeal to be agreed or taxed.
Note : Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
Orders accordingly
JUDGE1
This is an appeal from a decision of the Administrative Appeals Tribunal as to the grant of a rebate of excise duty pursuant to s.78A of the Excise Act 1901 (Cth) with respect to diesel fuel purchased by the applicant and used by it during the periods 1 September 1982 to 31 March 1983 and 1 to 27 November 1983.
Section 78A reads, inter alia,
"78A.(1) A rebate is, subject to sub-sections (2) and (3) and to such conditions and restrictions as are prescribed (being conditions and restrictions that relate to goods generally, to goods included in a class of goods that includes diesel fuel or to diesel fuel only), payable to a person who purchases diesel fuel, being diesel fuel upon which duty has been paid, for use by him -
(a) in mining operations or primary production (otherwise than for the purpose of propelling a road vehicle on a public road);
. . . . .
(2) Where a person -
(a) purchases diesel fuel for use by him in a manner referred to in sub-section (1); and
(b) uses the diesel fuel otherwise than in a manner referred to in that sub-section,
then -
(c) if rebate has not been paid under sub-section (1) to the person in respect of the diesel fuel - rebate is not payable to the person in respect of the diesel fuel; or
(d) if rebate has been paid under sub-section (1) to the person in respect of the diesel fuel - the person shall, on demand in writing made by a Collector, pay to the Commonwealth an amount equal to the amount of rebate paid to him in respect of the diesel fuel and, if the person fails to pay to the Commonwealth the amount demanded within such period as is specified in the demand, the amount may be recovered in a court of competent jurisdiction as a debt due to the Commonwealth.
. . . . .
(7) In this section, 'mining operations', 'primary production', 'residential premises', 'road vehicle' and 'use' have the same respective meanings as in section 164 of the Customs Act 1901."
The expression "primary production" is defined in s.164 of the Customs Act 1901 (Cth) to mean :
"(a) agriculture;
(b) fishing operations; or
(c) forestry;".
"Agriculture" is defined as follows -
"(a) the cultivation of the soil;
(b) the cultivation or gathering in of crops; or
(c) the rearing of live-stock,
and includes -
(d) viticulture, horticulture, pasturage or apiculture;
(e) hunting or trapping carried on for the purpose of a business; or
(f) other operations (including operations by way of pest or disease control or by way of soil or water conservation) connected with any operations referred to in paragraph (a), (b), (c), (d) or (e),
but does not include fishing operations or forestry."
The principal function of the applicant, a body corporate established by the Australian National Railways Act 1975 (Cth) and the Australian National Railways Commission Act 1983 (Cth), is to maintain railways and works connected therewith and to operate these for the carriage of passengers and goods. The decision under review records :
"The railway services operated by the applicant at the relevant time included services between Port Augusta and Alice Springs, Port Augusta and Parkeston (near Kalgoorlie), Port Augusta and Maree, Port Augusta and Port Pirie and Broken Hill (with spur lines to Wilmington and Quorn) and Port Augusta and Whyalla."
The Tribunal described the applicant's claims as follows :
The applicant's claim is that a rebate is payable under section 78A of the Excise Act 1901 in respect of diesel fuel used by it during the period in question for the purpose of the carriage by rail for reward of lead and zinc concentrates, live-stock, fertilizer and grain and for the purpose of generating electricity for use in what are referred to as 'camp trains'."
The Tribunal allowed the application in respect of diesel fuel used by the applicant for the carriage by rail of lead and zinc concentrates and for the purpose of generating electricity for use in the camp trains. However, it refused a rebate with respect to diesel fuel used for the carriage by rail of live-stock, fertilizer and grain.
With respect to the carriage of live-stock, the Tribunal said, inter alia,
"The applicant maintains at many locations throughout the railway system that it operates (other than in the Northern Territory) facilities for the movement of live-stock. Those facilities include sidings, holding yards and loading races and ramps. In the Northern Territory those facilities are provided by the Northern Territory Government. The applicant also maintains railway wagons particularly designed for the carriage of live-stock, some suitable for the carriage of cattle and others for the carriage of sheep and goats.
The occasions for the carriage of live-stock vary. They include carriage to an abattoir or a slaughtering point, carriage to a port for export, carriage away from an area the subject of a programme for the eradication of tuberculosis or brucellosis and carriage for re-stocking purposes after the carrying out of such a programme. The applicant also carries live-stock from an area in which they are bought in store condition to another area for the purpose of enabling them to gain body weight preparatory to sale for slaughter. Live-stock are also carried from an area subject to drought for agistment in another area.
No claim is made for rebate of duty in respect of the transportation of live-stock to an abattoir or a slaughtering point or in respect of transportation to a port for export. The claim is, however, made in respect of the transportation of live-stock in the other instances mentioned.
It appears that not infrequently a train will consist only of wagons transporting live-stock. On other occasions live-stock will form only part of the goods carried on a particular train.
The applicant contends that in using diesel fuel for the purpose of hauling live-stock in the circumstances mentioned it is using diesel fuel in primary production within the meaning of that expression in paragraph 78A(1)(a) of the Excise Act 1901.
. . . . .
The applicant relies upon that part of paragraph (f) of the definition which refers to 'other operations . . . connected with any operations referred to in paragraph . . . (c) . . .' of the definition. It is thus contended that the transportation of the live-stock is an operation connected with the rearing of live-stock.".
The Tribunal held that the carriage by rail of live-stock was not excluded from rebate by virtue of the fact that it was carried out by an independent contractor, the applicant, which was not a primary producer. The Tribunal had earlier dealt in more detail with this aspect when considering the transportation of minerals. On this aspect, it had concluded :
"In answer to the applicant's submission the respondent contends that the transportation of the minerals or ores bearing minerals to which paragraph (d) of the definition refers is confined to transportation by the company which is engaged in the operations for the recovery of those minerals or ores and does not extend, as in the present case, to transportation by an independent contractor. This result is said to be dictated by a consideration of the definition of 'mining operations' as a whole and the underlying purpose of the statute, namely to give benefits by way of rebate to those engaged in the mining industry. In support of this construction of the statute reference was made to an explanatory memorandum prepared for the House of Representatives relating to the Diesel Fuel Taxes Legislation Amendment Bill 1982 and the speech made in the Senate by the Minister on the occasion of the moving by that Minister of a motion that the Bill in its then amended form be read a second time.
We are unable to accept this submission. The language of the statute is, in our opinion, clear. It is necessary, but sufficient, in order that diesel fuel used in the transportation of minerals or ores bearing minerals qualify for rebate that the transportation is from the mining site to the place where dressing or benefication (sic) takes place. To add to that the qualification that the user of the fuel must itself be engaged in the recovery of the minerals or ores is to import a qualification which is not expressed in the language of the provision and for the implication of which we can see no justification. We should add that we have not derived any assistance in the construction of the provision from the explanatory memorandum or the second reading speech to which we were referred."
I agree with this view. The benefit of the diesel fuel rebate is not restricted to a person who carries on mining operations or primary production using those terms in their ordinary parlance. The rebate is given not to persons who carry on occupations as defined but to persons who purchase diesel fuel for use in operations as defined.
However, the Tribunal went on to hold that the applicant's operations with respect to the carriage of live-stock were not operations of agriculture as defined. I cannot accept the reasoning of the Tribunal on this point. The occasions with respect to which the applicant claimed fuel for the carriage of live-stock were occasions upon which live-stock was carried away from an area which was the subject of a programme for the eradication of tuberculosis or brucellosis, or for re-stocking after the carrying out of such a programme, or from one area to another for the purpose of enabling the live-stock to gain body weight preparatory to sale, or from an area subject to drought for agistment in another area not subject to drought. These are all operations which come within the descriptions "(c) the rearing of live-stock" and ". . . other operations (including operations by way of pest or disease control . . . ) . . . connected with any operations referred to in paragraph . . . (c) . . .".
The Tribunal considered that those tests require not an examination of the purpose of the transportation but an objective determination of the transportation. The Tribunal said:
". . . What the statute requires, in order that the fuel shall qualify for rebate of duty, is that the operation can be seen objectively to be one connected with the rearing of live-stock."
In my view, the Tribunal was wrong in this respect. The test is not that, but rather is whether the applicant was a person who "purchases diesel fuel . . . for use by him . . . in . . . primary production . . .".
Once it is accepted that it is not necessary for a rebate that the subject operation be carried out by a person who rears live-stock, it is an inevitable consequence that the transportation of live-stock by contractors which takes place in the course of the rearing of live-stock, as distinct from transportation which takes place for the purpose of sale or other disposal, is an operation of primary production as defined.
I would add that transportation for the purpose of pest or disease control connected with the rearing of live-stock is within the clear words of the definition which expressly include "(. . . operations by way of pest or disease control . . .) connected with any operations referred to in paragraph . . . (c) . . .".
For these reasons, the purpose for which the transportation occurs is a relevant matter.
The Tribunal also referred to the specific inclusion of certain transportation in the definitions of "mining operations" and "forestry" and said :
". . . Although this is by no means conclusive, it suggests that the use of diesel fuel in transportation as such was not, except where expressly stated, intended to be a use which qualified the user for a rebate of duty."
I would not accept this view. The fact that transportation is specifically included in the definitions of "forestry" and "mining operations" does not lead to the conclusion that transportation is not within the definition of agriculture. Transportation which occurs as part of the processes undertaken in the course of the rearing of live-stock or in the course of other operations connected therewith falls within the ambit of "agriculture" as defined.
As the Tribunal approached this matter on a wrong basis it must be remitted to the Tribunal for re-consideration.
I should also mention that there was an aspect of the matter which, in my opinion, was vital to the claim and which, because of the way the matter was put to the Tribunal, was not considered by the Tribunal.
A rebate is payable to a person who purchases diesel fuel, upon which duty has been paid, for use by him in primary production as defined. Section 78A(2) provides that, where a person purchases diesel fuel for such use by him but uses the diesel fuel otherwise than in that manner, then the rebate is not payable or, if it has been paid, is refundable.
The diesel fuel rebate is not payable with respect to diesel fuel used in primary production. It is payable with respect to diesel fuel which has been purchased for use in primary production and it ceases to be so payable, or becomes refundable, if the diesel fuel is used in some other manner. The rebate is payable if the diesel fuel is purchased for use in primary production whether or not it is so used, provided that it is not used in any other manner.
There was no evidence before the Tribunal that diesel fuel was purchased by the applicant for any particular use. Certainly, diesel fuel was purchased for the general operation of the railway, but the general operation of a railway is not primary production as defined.
I do not suggest that, if an appropriate case for apportionment is put forward, there should not be an apportionment of diesel fuel purchased in bulk with several uses in mind. Although the diesel fuel rebate provisions use simple language, they are intended to be applied in a practical, common sense manner to commercial operations. I would not accept that a person is excluded from rebate merely because diesel fuel was purchased in bulk and no seperate purchase was made of diesel fuel for use in primary production. In an appropriate case, there may be apportionment.
But to say that there may be apportionment does not mean that a rebate is payable to the applicant simply because diesel fuel was used by the applicant in an operation of primary production as defined. It is only payable on diesel fuel purchased for use in that operation.
In the present case, there was no consideration by the Tribunal of the issue whether diesel fuel was so purchased or as to what may be the circumstances in which an apportionment of a bulk purchase by the applicant of diesel fuel would be appropriate.
The Tribunal noted in its reasons that the respondent had conceded that diesel fuel was purchased by the applicant for the purpose for which it was in fact used. But it does not appear that there was any concession by the respondent that diesel fuel was purchased by the applicant for use in primary production. In his opening address to the Tribunal, counsel for the applicant, Mr R.E. Williams, made these comments to the Tribunal:
"Stopping there, I do not believe there is any dispute that the applicant was a person who purchased diesel fuel.
Being diesel fuel upon which duty has been paid for use by him.
As I understand it, duty was paid on the subject fuel. I do not understand that in a general sense there is any dispute that the applicant used the diesel fuel.
Or it was purchased for that use?---Or that it was purchased for that use.
I do not understand that any of those matters give rise to the dispute."
The representative of the respondent, Mr M. Lysewycz, did not, however, positively adopt these remarks. In his address, Mr Lysewycz, said,
". . . What we say is, when we come back to section 78A, it must be shown that the diesel fuel was purchased by the applicant so as to be actually used by it in one of the prescribed categories.
. . . . .
. . . We characterize the Commission as a transporter and what use does a transporter make of fuel to enable him to conduct his transport operations?
That is a round about way of getting there, but if I could pursue that a while longer, is transport operations, per se, an eligible use and we say no. . . .".
It can be seen that neither counsel put the matter in the manner in which, in my view, it should have been considered. A finding that the applicant engaged in some operations of primary production as defined does not resolve the issue whether or not the applicant purchased diesel fuel for use by it in primary production. That is an issue which should be considered by the Tribunal in its re-consideration.
On the second and third issues in the appeal, the Tribunal found that the transportation of fertilizer from the point of manufacture by rail to country stations or depots and the transportation of grain from country silos to storage depots in or in the vicinity of ports were not operations of agriculture as defined. The applicant had alleged that they were operations by way of the cultivation or gathering in of crops or other operations connected therewith. In my opinion, the evidence as to the superphosphate did not show that what occurred was part of, or was connected with, the usage by primary producers of superphosphate as distinct from the distribution of superphosphate by the manufacturers of stocks to centres where it would be available for retail or user use. Nor was it shown that the grain was transported as part of the process of production and harvesting of grain as distinct from the process of distributing or disposing of the grain once harvested. The diesel fuel rebate looks to operations within a narrower compass than the operations in respect of which the applicant's claims in this respect were made. The rebate for primary production is concerned with production of primary produce, not with the manufacture and wholesale distribution of superphosphate or with the marketing of primary produce once grown and harvested. The applicant's claim on these two matters was correctly rejected.
In my view, the decision of the Tribunal should be affirmed in so far as it dealt with the claims for a rebate in respect of the transportation of superphosphate and the transportation of grain but should be set aside in so far as it dealt with the transportation of live-stock. That matter should be remitted to the Tribunal for re-consideration. As the applicant has succeeded in part, I would order that the respondent pay one-half of the applicant's costs of the appeal.
JUDGE2
This case raises questions of the construction of s. 78A of the Excise Act 1901 and s. 164 of the Customs Act 1901. The two provisions are in similar terms and intended to apply to similar situations except that the excise provision relates to diesel fuel refined in Australia and the customs provision to diesel fuel refined overseas and imported into Australia. The two provisions were introduced into the Excise Act and the Customs Act by the Diesel Fuel Taxes Legislation Amendment Act 1982. Section 164 of the Customs Act, so far as it is relevant, is as follows :-
"164. (1) A rebate is, subject to sub-sections (2) and (3) and to such conditions and restrictions as are prescribed (being conditions and restrictions that relate to goods generally, to goods included in a class of goods that includes diesel fuel or to diesel fuel only), payable to a person who purchases diesel fuel, being diesel fuel upon which duty has been paid, for use by him -
(a) in mining operations or primary production (otherwise than for the purpose of propelling a road vehicle on a public road);
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) Where a person -
(a) purchases diesel fuel for use by him in a manner referred to in sub-section (1) ; and
(b) uses the diesel fuel otherwise than in a manner referred to in that sub-section,
then -
(c) if rebate has not been paid under sub-section (1) to the person in respect of the diesel fuel - rebate is not payable to the person in respect of the diesel fuel; or
(d) if rebate has been paid under sub-section (1) to the person in respect of the diesel fuel - the person shall, on demand in writing made by a Collector, pay to the Commonwealth an amount equal to the amount of rebate paid to him in respect of the diesel fuel and, if the person fails to pay to the Commonwealth the amount demanded within such period as is specified in the demand, the amount may be recovered in a court of competent jurisdiction as a debt due to the Commonwealth.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) In this section -
'agriculture' means -
(a) the cultivation of the soil;
(b) the cultivation or gathering in of crops; or
(c) the rearing of live-stock,
and includes -
(d) viticulture, horticulture, pasturage or apiculture;
(e) hunting or trapping carried on for the purpose of a business; or
(f) other operations (including operations by way of pest or disease control or by way of soil or water conservation) connected with any operations referred to in paragraph (a), (b), (c), (d) or (e), but does not include fishing operations or forestry;"
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
'primary production' means-
(a) agriculture;
(b) fishing operations; or
(c) forestry;"
For practical purposes it may be said that the provisions of s. 78A of the Excise Act are in identical terms to those of s. 164 of the Customs Act.
The applicant is bound to pay customs or excise duty on fuel which it uses unless it is entitled to the rebate for which the two sections provide. Although s. 57H of the Australian National Railways Act 1917 provides in sub-sec. (1) that the applicant is not subject to taxation under the laws of the Commonwealth or of a State or Territory, the sub-section is to be read subject to sub-sec. (2) which provides that the regulations may provide that sub-sec. (1) does not apply in relation to a specified law or laws. We were informed that regulations have been made applying the provisions of the two Acts to the applicant.
In an application to the Administrative Appeals Tribunal the applicant postulated a number of circumstances in which, so it submitted, it was entitled to a rebate of duty paid or payable on diesel fuel which it used, principally in diesel locomotives used to draw certain freight trains. The Tribunal found it entitled to the rebate which it claimed in respect of the use of diesel fuel in transporting lead and zinc concentrates from Broken Hill to Port Pirie and also in respect of the use of diesel fuel in what are described as camp trains which house itinerant workers employed by the applicant. It rejected a claim for a rebate in respect of the use of diesel fuel in the carriage of live-stock in certain circumstances, the carriage of fertilizers and the carriage of grain. We shall refer in a moment to the particular circumstances in which the live-stock, fertilizers and grain were carried.
The applicant contends that, in rejecting its claims for rebate in respect of the three types of carriage referred to, the Tribunal erred in law. The respondent denies that any error of law was committed by the Tribunal and says, in addition, that the submissions which it makes raise for consideration questions of fact rather than questions of law. The respondent has not itself appealed against the Tribunal's decision insofar as it concerned the carriage of minerals and the use of diesel fuel in camp trains.
One of the difficulties in the case is that the applicant did not select any actual examples of cases where the respondent had disallowed the rebate so that the Tribunal might have determined whether it was or it was not entitled to a rebate in a given case. For instance, its application for review in relation to the carriage of live-stock merely said, "being an operation connected with the rearing of live-stock . . .". The applicant gave general evidence of the nature of the various carriages which were involved and asked, in effect, for relief in the nature of declaratory relief. This has presented us with a certain difficulty in determining the questions which are at issue, including the question of whether or not the applicant's submissions involve questions of law or questions of fact. This is something of which we shall say more a little later.
The evidence in relation to the carriage of live-stock was summarised by the Tribunal as follows:-
"The applicant maintains at many locations throughout the railway system that it operates (other than in the Northern Territory) facilities for the movement of live-stock. Those facilities include sidings, holding yards and loading races and ramps. In the Northern Territory, those facilities are provided by the Northern Territory Government. The applicant also maintains railway wagons particularly designed for the carriage of live-stock, some suitable for the carriage of cattle and others for the carriage of sheep and goats.
The occasions for the carriage of live-stock vary. They include carriage to an abattoir or a slaughtering point, carriage to a port for export, carriage away from an area the subject of a programme for the eradication of tuberculosis or brucellosis and carriage for re-stocking purposes after the carrying out of such a programme. The applicant also carries live-stock from an area in which they are bought in store condition to another area for the purpose of enabling them to gain body weight preparatory to sale for slaughter. Live-stock are also carried from an area subject to drought for agistment in another area.
No claim is made for rebate of duty in respect of the transportation of live-stock to an abattoir or a slaughtering point or in respect of transportation to a port for export. The claim is, however, made in respect of the transportation of live-stock in the other instances mentioned.
It appears that not infrequently a train will consist only of wagons transporting live-stock. On other occasions live-stock will form only part of the goods carried on a particular train."
The Tribunal summarised the evidence in relation to the carriage of fertilizers as follows:-
"This claim relates to the carriage of superphosphate from the point of manufacture (where the fertilizer is loaded on to wagons provided by the applicant) to sidings at various locations within the railway system that the applicant operates. The superphosphate is carried in bulk in wagons adapted to the carriage of that product in that each wagon is fitted with a framework to support heavy-duty tarpaulins to prevent the entry of moisture.
The consignee of the superphosphate will be either a landowner who proposes to use the superphosphate on his property, a carting and spreading contractor carrying on business in the area or the manufacturer himself who maintains a country depot in the area.
It would almost never happen that a train would be composed solely of wagons carrying superphosphate."
Finally, the Tribunal's summary in relation to grain was as follows:-
"Throughout the grain growing areas of South Australia farmers deliver their grain upon harvesting to receival centres for storage in silos. Those silos have been built, mainly on railway property owned by the applicant, by South Australian Co-operative Bulk Handling Limited which also operates the silos. There are insufficient silos to store the whole of the harvest and there is a need for grain to be moved from those silos to central points both to relieve pressure at the receival centres and to have the grain at more convenient points for distribution to buyers. Those central points are on the sea-board."
In each of the three classes of carriage the applicant claims that a rebate is payable because, to adopt the language of s. 164, the appellant is a person who purchases diesel fuel, being diesel fuel upon which duty has been paid, for use by him (it) in primary production. In sub-sec. 164(7) "primary production" is defined to mean, inter alia, "agriculture". "Agriculture", in turn, is defined to mean the cultivation of the soil, the cultivation or gathering in of crops, or the rearing of live-stock and includes, inter alia, other operations (including operations by way of pest or disease control or by way of soil or water conservation) connected with any operations referred to in earlier paragraphs. Of relevance to the present case are those paragraphs referring to the cultivation of the soil, the cultivation or gathering in of crops and the rearing of live-stock.
Two matters need to be noticed about the section before one comes to grapple with the questions of construction which are involved. Firstly, the use of the words, "rebate . . . payable to a person who purchases diesel fuel . . . for use by him . . ." and the provisions of sub-sec. 164(2) might suggest that the rebate should be applied for at or before the time of the purchase of the diesel fuel. But that is not how the section is administered in practice. It may be that a purchaser whose purposes are amongst those which will attract the rebate will make the application in advance, but often he makes it, having previously paid a price for the fuel, which includes the duty, and subsequently recovers a rebate in respect of the duty which he has paid; see Re Cliffs Robe River Iron Associates and Collector of Customs (1984) 2 A.A.R. 219 at p.222. This matter was not the subject of submission before us no doubt because of the agreement about it which the parties had reached. In relation to that agreement the Tribunal said:-
"It is common ground that the diesel fuel the subject of the applications for rebate was entered for home consumption after that date (the date of the commencement of the Diesel Fuel Taxes Legislation Amendment Act 1982. It is also common ground that the diesel fuel was purchased by the applicant at a price which included duty and that it was used by the applicant for the purposes already mentioned, those purposes not including the purpose of propelling a road vehicle on a public road. The respondent conceded that the fuel was purchased for the purpose for which it was in fact used."
The other matter to be noticed is that although, at first sight, it might appear that the rebate is payable only to persons who are themselves directly engaged in, for example, mining operations or primary production, it will also be payable to persons if their use of it is for those purposes even though they themselves are not miners or primary producers. Thus, it is payable where a primary producer, for example, a grazier, engages a contractor to carry out work connected with primary production and the contractor uses diesel fuel in operating the plant necessary for the task. The contractor providing the equipment is in that case entitled to the rebate.
The rebate will not be payable in relation to the carriage of live-stock unless it can be said that the carriage of them which led to the use of diesel fuel was in connection with the rearing of them or in connection with other operations (including operations by way of pest or disease control) connected with the rearing of the live-stock. The meaning of the word "connected" in the context in which it is used, therefore, needs to be considered. In Collector of Customs v. Cliffs Robe River Iron Associates (Federal Court of Australia, 28th March 1985, unreported), the Court was concerned with the provisions of the legislation now under consideration. The Court said:-
"The relevant provisions of the Excise Act reflect a legislative policy of encouragement of mining operations and should not be given a narrow application.
The meaning of the word "connection" is both wide and imprecise. One of its common meanings is "relation between things one of which is bound up with, or involved in, another". Shorter Oxford English Dictionary. We were referred to a number of cases where, in other contexts, the meaning of the word "connection" has been discussed, but we do not think that any assistance is to be derived from them. Given that the generation of electricity in the present case was carried out at a place adjacent to the area in which the mining occurred, the question of law which arises is whether, on the facts of this case, it was open to the Tribunal to hold that the generation of electricity for the township was an operation connected with the mining for minerals. In our opinion it was."
The occasions of carriage of live-stock for which the applicant claims a rebate are:-
1. Carriage away from an area the subject of a programme for the eradication of tuberculosis or brucellosis.
2. Carriage for re-stocking purposes after the carrying out of such a programme.
3. Carriage from an area in which the live-stock are bought in store condition to another area for the purpose of enabling them to gain body weight preparatory to sale for slaughter.
4. Carriage from an area subject to drought for agistment in another area which is presumably not subject to drought.
We find it difficult to understand why each of these carriages is not to a sufficient degree connected with the rearing of the live-stock. To remove stock exposed to the danger of infestation by disease to a place where that risk will not exist seems to us to be a carriage directly concerned with their rearing. The return of the cattle after the carrying out of a programme of eradication seems to us to be in like category. Similarly, the transport of live-stock from an area in which they are bought in store condition to another area for the purpose of fattening them seems also to be directly connected with their rearing as does their removal from a drought area to be agisted on land not subject to drought.
The reason why the Tribunal thought that the claim should fail is that it thought it was implicit in the applicant's argument "that the use of the diesel fuel purchased by the applicant is to be determined by ascertaining the purpose which the owner of the live-stock had in determining that he should have his stock transported from one point to another". The Tribunal said that it did not consider that this was the proper meaning of the statute. It added,
"What the statute requires, in order that the fuel shall qualify for rebate of duty, is that the operation can be seen objectively to be one connected with the rearing of live-stock."
Our understanding of what the Tribunal has said is that the rebate will not be payable unless there are objective indications that the carriage is an operation connected with the rearing of the live-stock. The purpose of the carriage ascertained by enquiry from the consignor or consignee was not regarded by the Tribunal as an objective indication. This view may, perhaps, have stemmed from what was said by the Tribunal in the Cliffs Robe River case (2A.A.R. at p.222), namely, "In the ordinary course, evidence of use will be the best evidence of the purpose for which fuel was purchased".
We do not think that the Tribunal in the Cliffs Robe River case intended that a consequence of what it said should be the omission from account of the result of an enquiry made of a consignor or consignee. We do not perceive why a carrier such as the contractor earlier mentioned or the applicant in this case should not, in an appropriate case, support his claim for a rebate by reference to the purpose of the carriage in the sense of the consignor's end in view. This itself is an objective fact. The rebate is not, of course, payable where the carriage is upon a public road. But many properties cover very large areas and have networks of private roads. A contractor providing a number of trucks for carriage of cattle from a disease infected area might travel for many kilometres over private roads before emerging on to a public thoroughfare. If there be a sufficient connection between the operation and the rearing of the cattle, we do not understand why the rebate should not be payable just because one has to enquire from the grazier engaging the contractor what the purpose of the carriage is. In our opinion the matters relied upon by the Tribunal do not bear on the construction of the Act; all they do is to point up the fact that in some cases there will be not insubstantial administrative difficulties in applying it because of uncertainty as to the facts concerning a particular operation.
It follows that in our opinion, the rebate is payable in the cases earlier postulated. In our opinion the operations are all clearly operations undertaken in connection with the rearing of live-stock. But we emphasize that both the Court and the Tribunal, because of the approach adopted by the parties, have engaged in what must be a hypothetical exercise. The matter has been raised generally rather than specifically and there may be circumstances, for instance, the use of the fuel in a locomotive pulling a mixed train, which would make it very difficult to justify the payment of the rebate even if the facts relating to certain stock were as postulated in the Tribunal's reasons.
In reaching our conclusion, we have considered whether the matters relied upon by counsel for the applicant raise a question of law for decision. Unless they do, the Tribunal's decision must stand. We are of opinion that a question of law is involved because the question is whether facts which have been fully found (though as to broad categories rather than specific instances) fall within the provisions of the relevant enactment; see Hope v. Bathurst City Council (1980) 144 C.L.R. 1 per Mason J. at p. 7.
The next type of carriage is the carriage of fertilizers. In relation to this matter we are in agreement with the Tribunal in the conclusion which it reached. In many cases questions of fact and degree will be involved. In our opinion the carriage of the superphosphate in the circumstances postulated in the Tribunal's decision is remote from any operation connected with the cultivation of the soil. The operations are rather the distribution of superphosphate to depots, areas or properties from which it will eventually be taken for the purpose of fertilizing the soil. We are not persuaded that what the Tribunal has said reflects any error of law.
Our view in relation to the third category of carriage is the same. In order to succeed the applicant has to show that as a matter of law the carriage of the grain in the circumstances postulated was an operation connected with the gathering in of a crop. In our opinion the carriage is remote from this operation. The operation is connected rather with the distribution of the gathered-in product than with the actual operation of getting it in. Again, we can detect no error of law in what the Tribunal has said.
In our opinion the applicant is entitled to succeed in relation to the first category of carriage, that is, the carriage of live-stock. But as we mentioned earlier, there is no specific instance of this which would enable either the Court or the Tribunal to say, positively that that carriage was of a particular nature and thus in respect of an operation connected with the rearing of live-stock. For that reason the matter will need to be remitted to the Tribunal to enable the parties, if they wish, to place before the Tribunal further evidence in relation to particular categories of carriage so that the Tribunal may rule upon a specific case or specific cases.
Accordingly, the decision of the Tribunal, insofar as it relates to the carriage of live-stock, should be set aside and the matter remitted to the Tribunal to be dealt with in accordance with the judgment of this Court. The respondent should pay one-half of the applicant's costs of the appeal.
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