Dyno Wesfarmers Limited and Chief Executive Officer of Customs [1996] AATA 828 (23 September 1996)

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Dyno Wesfarmers Limited and Chief Executive Officer of Customs [1996] AATA 828 (23 September 1996)

Last Updated: 19 December 2008

Administrative
Appeals
Tribunal

DECISION AND REASONS FOR DECISION

ADMINISTRATIVE APPEALS TRIBUNAL )
) No N95/1075
GENERAL ADMINISTRATIVE DIVISION )

Re DYNO WESFARMERS LIMITED
Applicant

And CHIEF EXECUTIVE OFFICER OF CUSTOMS
Respondent

AAT Decision No 11257

DECISION

Tribunal The Hon. Justice Rodney N. PURVIS

Date 23 September 1996

Place Sydney

Decision The decision under review is set aside and the matter remitted to the respondent to calculate the appropriate rebate to be allowed.

.................(Signed).........................
The Hon. Justice Rodney N PURVIS
Presidential Member

CATCHWORDS
CUSTOMS - Diesel Fuel Rebate - applicant provided purpose built vehicles which mixed and set explosives on mine site - whether rebate payable for fuel used in travel to and from mine site - whether fuel used in ‘mining operations’ - whether fuel used in mining for minerals or in an activity undertaken to enable mining to commence

Customs Act 1901 - s. 164
Excise Act 1901 - s. 78A
Customs and Excise Legislation Amendment Act 1995
Customs and Excise Legislation Amendment Act (No. 1) 1996

Federal Commissioner of Taxation v Broken Hill Proprietary Co Limited [1968] HCA 16; (1969) 120 CLR 240
Federal Commissioner of Taxation v Reynolds Australia Alumina Ltd (1987) 18 FCR 29; 87 ATC 5018
Collector of Customs v Cliffs Robe River Iron Associates [1985] FCA 96; (1985) 7 FCR 271; 7 ALD N269
Australian National Railways Commission v Collector of Customs (SA) [1985] FCA 312; (1985) 8 FCR 264; 69 ALR 367
Dampier Salt (Operations) Pty Ltd v Collector of Customs (1995) 133 ALR 502
Re Cliffs Robe River and Iron Associates and Collector of Customs (1984) 2 AAR 219
Collector of Customs v Pozzolanic Enterprises Pty Limited; Collector of Customs v Pressure Tankers Pty Limited (1993) 115 ALR 1
Re Nabalco Pty Ltd and Collector of Customs [1993] AATA 379; (1993) 32 ALD 771 [Extract]
Collector of Customs v Western Australian Government Railways Commission (Westrail) (1995) 39 ALD 21
Re Queensland Railways and Regional Director of Customs (Queensland) (AAT 11092, 25 July 1996)
Regional Director of Customs (WA) v Damper Salt (Operations) Pty Ltd (Unreported, Full Federal Court, 12 June 1996, 452/1996)

REASONS FOR DECISION

23 September 1996 The Hon. Justice Rodney N. PURVIS

THE APPLICATION FOR REVIEW

1. On 7 July 1995 Dyno Wesfarmers Ltd (“the applicant”) lodged an application for review of a decision of the Chief Executive Officer of Customs (“the respondent”), formerly known as the Collector of Customs, dated 29 June 1995. On this date, a delegate of the respondent decided that diesel fuel purchased by the applicant to propel mobile manufacturing units on public roads was ineligible for rebate under the terms of section 164 of the Customs Act 1901 (“the Act”) and section 78A of the Excise Act 1901.
2. The decision in this application for review turns on the meaning to be ascribed to the term “mining operations” as defined in s. 164 of the Act. If the relevant activities fall within the meaning sought by the applicant to be given to these words, then relevant diesel fuel used by it would be subject to a rebate under the Act and its companion legislation, the Excise Act 1901.
3. At the hearing of this matter, the applicant was represented by Mr I Rodda and the respondent was represented by Mr R Northcote. The Tribunal had before it the documents provided by the respondent pursuant to section 37 of the Administrative Appeals Tribunal Act 1975. A statement of agreed facts was tendered and marked exhibit A. There was no oral evidence given on behalf of either the applicant or the respondent.

THE FACTS UPON WHICH THE REVIEWABLE DECISION WAS BASED AND ITS REVIEW

4. On 4 April 1995 an application for diesel fuel rebate covering diesel fuel purchased during the period 31 August 1986 to 30 June 1994 was lodged with the respondent on behalf of the applicant. The claim was made under s. 164 of the Act.
5. The factual basis upon which the claim was made, as detailed on behalf of the applicant, was to the effect that the applicant was a manufacturer of explosives for use in mining operations. It prepared explosive charges in situ at mining sites utilising vehicle mounted mixing units to prepare an explosive mixture which was pumped down a pre-drilled hole in the blast area. The vehicle mounted mixing units were modules designed for truck mounting. The vehicle with mixing unit fitted is known in the mining industry as an MMU and was designed to perform functions specific to the manufacture of explosive charges, to proportion and mix diesel fuel, ammonium nitrate and other ingredients in accordance with the magnitude of the explosion required. Its capacity for mobility, that is relocation, from one blast area to another was incidental to its designed function. When in use, an MMU was located at a mine site or travelling on a road adjacent to the mine site or area of mining operations. Use on public roads, it was said, was limited and incidental only to the normal operational usage.
6. The MMU was a complete mounted unit designed to mix and pump a resultant explosive product into a pre-dug bore hole on top of a designator. A cap was then placed over the product mix with the remainder of the hole then refilled. The MMU produced the explosive mix according to the individual contract from the mine operator for the particular project. It loaded its materials to be mixed into the product at the applicant’s nearest base to the particular mine site, then travelled to the subject site and moved from bore hole to bore hole mixing and inserting the explosive product. At the conclusion of the delivery of the product, the particular mine site was then subjected to the explosion.
7. The claim for diesel fuel rebate in respect of the vehicle’s consumption of diesel fuel included both fuel used in mine site operations and fuel used whilst the vehicle was mobile, including travel on public roads. It was said that the vehicle was a special purpose motor vehicle designed to perform the functions of preparing and positioning explosives as an integral part of the process of recovering minerals from the earth’s crust.
8. There was no issue that the MMU unit was, when on site, engaged in a function connected with mining operations and was a unit designed with the capacity to use an on-board computer to mix various explosive components depending on the job to be done, and had the facility on board to pump the explosive down a drill hole.
9. It was said that the mobile manufacturing unit was not a vehicle of a kind ordinarily used on roads for the transport of persons or goods, and therefore, was not a vehicle of the kind excluded from the ambit of the activities for which diesel fuel rebate would be paid. Indeed, it was agreed between the parties that the mobile manufacturing units were not road vehicles as defined in subs. 164(7) of the Act.
10. It was contended by the respondent, however, that travel on public roads to and from the mining sites by the vehicles did not automatically qualify such travel as eligible for rebate. The test at the time the original decision was made, it was said by the respondent, was whether such travel could be considered to be an operation connected with mining operations and carried out at a place adjacent to the area in which the mining occurred. The activity of travel on public roads of the vehicles to and from mining sites was considered not to be an activity undertaken for the purpose of mining for minerals, and therefore ineligible for rebate.

FACTS AND ISSUES AGREED UPON BETWEEN THE PARTIES

11. The following facts and issues were not at issue between the parties at the hearing before the Tribunal.

(1) The application for diesel fuel rebate the subject of this matter was in respect of fuel purchased for, and used in, trucks operated by the applicant. The use of these trucks is generally as follows:

(a) the applicant receives an order for the supply of explosives at a particular mine;

(b) the ingredients for the explosives (mainly ammonium nitrate, emulsifiers and diesel fuel) are loaded into separate tanks on the truck at the applicant’s depots (the maximum storage capacity of each tank is as follows: Emulsion tank = 5.2 tonne, AN tank = 6.5 tonne, Diesel tank = 4.1 tonne);

(c) the truck then drives from the applicant’s depot to the mine on both public and private roads (the average distance travelled on public roads is 150 km each way for travel between the applicant’s depot and mine sites at Kalgoorlie which is the only area the subject of the dispute);

(d) at the mine site the truck travels to where the explosives are required, typically a bench in an open cut mine where many drill holes would have been prepared to take explosives. The truck may also travel short distances between drill holes or travel between different sites at the mine site where explosives are required;

(e) when the truck is at the respective drill hole site where an explosion is required:

(i) the explosive ingredients are blended on the MMU (Mobile Manufacturing Unit) truck from their storage tanks on the MMU; and

(ii) the explosives are then pumped down the drill holes by means of an MMU mounted pump and hose mounted from the MMU to the drill hole;

(f) after completion of the delivery the truck is either moved to a safe distance whilst the explosion occurs, or it is moved to the next contracted explosion site (if sufficient ingredients are on-board). It then leaves the mine site for return to the depot with the necessary contract documentation and then commences the next load for the next contract.

(2) On 29 June 1995 the respondent paid the applicant’s claim in part and refused the claim in part. The decision-maker considered that the applicant was eligible for rebate under “mining operations” in respect of fuel used by the trucks at the mines and whilst travelling on private roads. The applicant was also eligible for a separate refund for any duty paid on fuel used as an ingredient in the manufacture of explosives (see paragraph 126(1)(s) of the Customs Regulations), and this was also taken into account in assessing the claim.

(3) Previously, the fuel used by the trucks at the mines was considered by the decision-maker to be eligible under paragraph (c) as it then was of the definition of “mining operations” which relevantly referred to:

“(c) others operations connected with ...... mining for minerals that are carried out in, or at a place adjacent to, the area in which the ..... mining occurs.”

The decision-maker has now refused the applicant’s claim for rebate for fuel used in its operations other than those in paragraphs 1(d) and (e) above, that is in respect of fuel used in the truck’s journeys to and from the mines whilst on public roads. The basis for the refusal was that although the decision-maker accepted that the applicant’s trucks were not “road vehicles” as defined due to their specialised nature, and so the use of the fuel was not excluded as being “propelling a road vehicle on a public road”, those journeys did not fall within paragraph (c) or any other paragraph of the definition of “mining operations”.

(4) On 1 July 1995 the Customs and Excise Legislation Amendment Act 1995 (“the 1995 Act”) revoked and replaced the definition of “mining operations” with retrospective effect to 1 August 1986. The amended definition does not contain the old paragraph (c) or paragraph (ca) “connected with” sweeper clauses. Instead, there is a long list of specific activities listed in paragraphs (e) to (v) of the definition of mining operations, none of which could apply to the applicant’s operations, and none of which the applicant contends applies. The applicant does, however, contend that the operations fall within paragraph (a) as integral part of mining for minerals within the terms of mining operations.

THE LEGISLATION

12. Section 164(1) of the Act provides so far as relevant:

(1) A rebate is, subject to subsections (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 for use by him:

(a) in mining operations (otherwise than for the purpose of propelling a road vehicle on a public road);
...

At all relevant times, “road vehicle” has been defined in subs. 164(7) of the Act as “a vehicle of a kind ordinarily used on roads for the transport of persons or goods.”

13. Prior to the 1995 amendments, subs. 164(7) of the Act defined “mining operations” to mean, so far as here relevant:

(a) exploration, prospecting or mining for minerals; or
(b) the dressing or beneficiation (at the mining site or elsewhere) of minerals, or ores bearing minerals, as an integral part of operations for their recovery;
and includes:
(c) other operations connected with exploration, prospecting or mining for minerals that are carried out in, or at a place adjacent to, the area in which the exploration, prospecting or mining occurs;
(ca) other operations connected with the dressing or beneficiation of minerals, or ores bearing minerals, where that dressing or beneficiation is an integral part of the operation for the recovery of the minerals or of the ores, being operations that are carried out in, or at a place adjacent to, the area in which the dressing or beneficiation occurs;
...

Following on from the words “and includes” in the above definition, there were seven paragraphs that described particular operations, three only of which would have been relevant to the present matter. The 1995 Act omitted this definition in its entirety.

14. So far as here relevant, the proposed new definition of “mining operations” in the Customs and Excise Legislation Amendment Bill 1995 (“the 1995 Bill”), as it was introduced into the House of Representatives, read:

‘Mining operations’ means:
(a) exploration, prospecting or mining for minerals; or
(b) the dressing or beneficiation of minerals, or ores bearing minerals, as an integral part of operations for their recovery;
and includes:
...

The particular activities which were to be included in the new definition of mining operations extended to twenty descriptive paragraphs (c) to (v).

15. The Explanatory Memorandum that accompanied the 1995 Bill, so far as here relevant, states with reference to the amended definition of “mining operations”:

The purpose of this amendment is to clarify that the ambit of the DFRS is to pay rebate on diesel fuel for use in the activities of exploring or prospecting for, and subsequent dressing and beneficiation of minerals and also for use in particular activities that are sufficiently connected with mining ...

The payment of rebate on diesel fuel was originally intended to be made to those persons who are involved in the mainstream of mining, as understood by the common person. This intention is implicit in the terms of paragraph 164(1)(a) of the Customs Act which provides eligibility for the payment of rebate in respect of diesel fuel for use in “mining operations”. The amendment proposed by this item removes any doubt that the DFRS is a targeted scheme providing rebate of customs and excise duty in respect of diesel fuel used in those activities that fall fully within the activities specified in the new definition of “mining operations”, rather than in respect of activities that may, in a loose sense, go towards “encouraging” mining operations.

Seven of the descriptive paragraphs as they appeared in the repealed definition were re-enacted by the amending legislation. Five of the new paragraphs, according to the Explanatory Memorandum were said to “replace the so called ‘sweeper clause’” in the previous paragraphs (c) and (ca) of the definition of “mining operations” under which activities said to be “connected with” mining operations were eligible for the payment of rebate. New paragraphs (h) to (l) included in the definition of “mining operations” were said in the Explanatory Memorandum to be activities ordinarily conducted either by, or on behalf of, miners as part of the operation of their mining business, and “other activities that do not fall within the ordinary meaning of the terms used in new paragraphs (h) to (l) will be ineligible to receive rebate in respect of diesel fuel for use in the activity”.

16. In the Second Reading Speech, the Minister stated in introducing the legislation:

The Government is firmly of the view that the Scheme [that is the Diesel Fuel Rebate Scheme] was never intended to pay rebate on diesel fuel used in activities that might only loosely be described as encouraging mining operations or primary production in a general sense. Rather, in the Government’s view, the scheme was designed ... in relation to mining operations, to pay rebate for fuel used in the act of exploring or prospecting for minerals, and their subsequent mining and beneficiation ...

17. With specific reference to the proposed amendment to the definition of “mining operations”, the Minister said:

In the existing legislation [the repealed legislation], both the definition of “agriculture” and the definition of “mining operations” employ what are known as “sweeper clauses”, which have the effect of making other operations connected with agriculture or mining eligible for payment of rebate. The interpretation of these “sweeper clauses” has been a main source of contention over the years, and has generated most of the litigation in the lifetime of the scheme.
The amendments proposed ... are to remove the subjectivity associated with the “sweeper clauses”, and replace those clauses with an objective list of activities which are eligible for rebate ...
It should be noted that although the proposed amendments will necessarily narrow the range of activities for which rebate is payable, farmers and miners will generally be unaffected. The intention of these amendments is to put beyond doubt that the Scheme is not meant to provide rebate eligibility for activities which are not sufficiently connected with mining or agriculture, for instance, the provision of a service or utility to a farmer or miner, such as electricity through a grid, or the building of a dam which is intended to supply water to, amongst others, farmers, or the operation of a garbage tip on a former mine site by someone other than the miner, where the resultant filling of the mine site is said to be the rehabilitation of a mine site, and thus connected with a mining operation.

18. Certain amendments were made to the text of the Customs and Excise Legislation Amendment Bill 1995 in the Senate. Of relevance for this proceeding was the amendment made to paragraph (a) of the definition of ‘mining operations’. The Senate proposed the inclusion of the clause “the removal of overburden and other activities undertaken in the preparation of a site to enable mining to commence” after the word “prospecting” and this was included in the 1995 Act as enacted. By virtue of this amendment, paragraph (a) of subs. 164(7) of the Act as enacted read:

(a) exploration, prospecting the removal of overburden and other activities undertaken in the preparation of a site to enable mining to commence or mining for minerals;

It seemed clear to both the applicant and the respondent in this matter and also to the Tribunal that a comma should have been inserted after the word “prospecting”.

19. This view was confirmed by the passage of the Customs and Excise Legislation Amendment Act (No. 1) 1996 (“the 1996 Act”) which received assent on 28 June 1996 and was taken to have commenced on 1 July 1995. This Act amended the 1995 Act by repealing paragraph (a) of the definition of mining operations and substituting the following:

(a) exploration, prospecting, or mining for minerals, or the removal of overburden and other activities undertaken in the preparation of a site to enable mining for minerals to commence; or

20. The reason for this amendment was set out in the Explanatory Memorandum to the Customs and Excise Legislation Amendment Bill 1996 in the following terms:

This is a grammatical amendment only to insert commas after the word “prospecting” in paragraph (a). The working of the new paragraph is also intended to put beyond doubt that the activities nominated in the paragraph relating to the preparation of sites must be undertaken in the preparation of such sites to enable mining for minerals to commence.

THE ISSUES

21. There is no issue as to the diesel fuel rebate being paid in respect of on-site operations. The dispute exists in relation to the applicant’s claim for diesel fuel used in the on-road journeys between sites. It was said by the respondent at the hearing to be arguable that the claim may have been apposite under paragraphs 164(1)(c) or (ca) of the Act prior to the 1995 amendments to the Act. However, the Act as amended by the 1995 Act retrospective to 1 August 1986 now precludes the allowability of the rebate unless the on-road activity is itself “mining operations” within the meaning of s. 164 of the Customs Act 1901 as amended by the Customs and Excise Legislation Amendment Act 1995.
22. The 1996 Act entered into force after the hearing of this matter had been completed but prior to the publication of the Tribunal’s decision. The Tribunal determined to contact the parties and seek further submissions on the effect, if any, of the entry into force of the 1996 Act on the matter before the Tribunal. Having received submissions on this point from the parties, the Tribunal proceeded to finalise its decision in the matter.

ARGUMENT FOR THE APPLICANT

23. At the hearing, it was submitted on behalf of the applicant that the definition of mining operations in paragraph 164(7)(a) of the Act as amended by the 1995 Act expressed an intention to attach a broad compass to the meaning to be ascribed to the words. It was submitted that on its proper construction, the definition encompassed all of the following activities:

(i) exploration for minerals;

(ii) prospecting for minerals;

(iii) the removal of overburden at a mine site;

(iv) activities undertaken in the preparation of a mine site to enable mining to commence;

(v) other activities undertaken in mining for minerals;

these in addition to the dressing and beneficiation of minerals and the activities specifically described in subparagraphs (c) to (v).

24. It was further submitted that the concept of mining operations as that expression is used in paragraph 164(1)(a) of the Act is not to be construed narrowly but intended to cover the full range of activities described above, as well as any other activities which constitute an essential and integral part of that wide range of activities which fall naturally within the broader concept of mining operations as that expression is defined in paragraph 164(7)(a) of the Act.
25. The applicant sought inter alia to rely upon the use of the phrase “mining operations” in the Income Tax Assessment Act 1936 (Federal Commissioner of Taxation v Broken Hill Proprietary Co Limited [1968] HCA 16; (1969) 120 CLR 240), and in the Sales Tax (Exemptions and Classifications) Act 1935 (Federal Commissioner of Taxation v Reynolds Australia Alumina Ltd (1987) 18 FCR 29; 87 ATC 5018) and the meaning there ascribed to such words. However, the Tribunal notes that in the subject case the legislation itself contains a definition of the phrase “mining operations” and it is to that definition that the Tribunal must direct its attention.
26. The applicant submitted that the critical issue is the question of whether there is a sufficient nexus between the activity in issue and the mining operation itself. This is a matter of fact, and would depend upon the degree to which the activity is required for the purpose of carrying out mining operations. Reliance was placed by the applicant in support of its submissions on Collector of Customs v Cliffs Robe River Iron Associates [1985] FCA 96; (1985) 7 FCR 271; 7 ALD N269; and Australian National Railways Commission v Collector of Customs (SA) [1985] FCA 312; (1985) 8 FCR 264; 69 ALR 367. Each of these cases, however, dealt with the legislation as it was prior to the 1995 amendments when the “sweeper clause” was operative. The Tribunal is here required to consider the legislation as it now is.
27. The applicant referred the Tribunal to the decision of Lee J in Dampier Salt (Operations) Pty Ltd v Collector of Customs (1995) 133 ALR 502 which considered the provisions of the Act as amended by the 1995 Act. The applicant relied specifically on the passage at 509 in which Lee J stated:

It follows from the foregoing that the construction intended by parliament to be applied to the phrase “mining operations” will be one that is cognisant of, and gives effect to, such a beneficial purpose [i.e. to provide financial assistance that may encourage persons to undertake mining operations]. That is not to say that parliament has applied a special meaning to the words used, or adopted a technical or commercial meaning which differs from the ordinary meaning of words. What it does mean is that it would not be consonant with the intention of parliament to apply a narrow meaning to the words if a broader meaning may be applied without straining the ordinary use of the words ...
The broad nature of the activities listed as being included within the definition of “mining operations” shows that the meaning of “mining for minerals and the beneficiation of minerals as an integral part of operations for their recovery” is expansive.

28. The applicant further submitted that consideration needs to be given to the words appearing in paragraph 164(1)(a) “otherwise than for the purpose of propelling a road vehicle on a public road”. There was no issue that the mobile manufacturing unit was not a road vehicle for the purpose of the above provision. A consequence of the vehicle not being a road vehicle supported the applicant’s contention. It was submitted that the words excluded from eligibility for diesel fuel rebate only that fuel used in vehicles which were road vehicles and which consumed diesel fuel on a public road. To be ineligible, a non-eligible vehicle must be both a road vehicle and use the fuel in respect of which the claim is made on a public road. There was no issue that the MMU was engaged in mining operations when it was on a mine site. Diesel fuel consumed by the vehicle whilst it is travelling on a private road was said to be eligible consumption. It was inconsistent for the respondent to then say that consumption of diesel fuel by an MMU whilst travelling on a public road is ineligible because the activity of travel on public roads of the MMUs to and from mining site is considered not to be an activity undertaken for the purpose of mining for minerals. If this proposition is correct, all travel, irrespective of whether on public roads, private roads or the mine site area itself, would not be an activity undertaken for the purpose of mining for minerals, and hence, no part of the fuel consumed by an MMU would qualify as eligible consumption.
29. The applicant says that by use of the words “other activities undertaken in ... mining for minerals” in subs. 164(7) of the Act, there was no intention to restrict activities only to the actual extraction of minerals from the ground. The vehicle on site is engaged in mining operations. It is engaged in mining for minerals. The subject movement of the vehicle to the site is “an other activity” undertaken in that mining operation.
30. Following the Tribunal’s request, the applicant provided further submissions on the effect of the 1996 Act. It was submitted that while the amendment to the Act changes the wording of the definition slightly, the definition of “mining operations” in subs. 164(7) of the Act remains broader than the narrow dictionary concepts and includes all of the following:

• activities undertaken in exploration for minerals;
• activities undertaken in prospecting for minerals;
• activities undertaken in mining for minerals;
• activities undertaken in the removal of overburden to enable mining for minerals to commence; and
• activities undertaken in the preparation of a site to enable mining for minerals to commence.

The applicant submitted that there is nothing in the amendments to the definition of “mining operations” which affect the substance of its original submissions.

ARGUMENT FOR THE RESPONDENT

31. The only issue between the parties, according to the respondent, is whether the fuel used in the on-road journeys was used in “mining for minerals” within paragraph (a) of the current definition of “mining operations”. The respondent contended that removal of the “sweeper clauses” had rendered the matter of interpretation “much simpler” in that instead of determining whether an operation is “connected with mining for minerals”, the issue was whether the fuel was “actually used in mining for minerals”. While the repealed legislation might have extended to the subject use, the definition as it now appears precludes the relevant operation from eligibility for diesel rebate.
32. Reference was made by the respondent to the decision of the Tribunal in Re Cliffs Robe River and Iron Associates and Collector of Customs (1984) 2 AAR 219 in which the Full Tribunal, at 222, stated that it was of the opinion that “mining” in the context of then subs. 164(7) of the Act carried its ordinary meaning “- the extraction of ore”. The Tribunal there, however, was considering the Act prior to the 1995 and 1996 amendments, and the questions asked of the Tribunal, namely whether diesel fuel purchased by the applicant for use in the generation of electricity for a town was part of the operation of or connected with mining for minerals, were different to the questions asked in this matter.
33. The respondent recognised that the vehicles whilst being involved in making and placing explosives at a mine “may well” be involved in mining for minerals, “and rebate has been paid on that basis”. However, it was submitted, the on-road journeys are merely the transporting of explosive ingredients, machinery used in mixing and placing the explosives, and the operator of the truck to the mine where they may be involved in a mining operation. The respondent contends that transportation of the MMU is not “mining for minerals” in its ordinary meaning.
34. Reference was made by the respondent to the decisions in Collector of Customs v Pozzolanic Enterprises Pty Limited; Collector of Customs v Pressure Tankers Pty Limited (1993) 115 ALR 1 at 4 and 13; Australian National Railways Commission v Collector of Customs (supra) at 371 ep sec; Re Nabalco Pty Ltd and Collector of Customs [1993] AATA 379; (1993) 32 ALD 771 [Extract]; in each of which cases consideration was given to the transportation of commodities used in agriculture or beneficiation, and as to whether they were sufficiently “connected with” mining or agriculture to be within the “sweeper” clauses. As the Tribunal sees it, the meaning given in these cases to the words then appearing in the legislation are not pertinent to a construction to be placed on the phrases used in the Act as it now is.
35. The respondent also referred in its submissions to the decision of Lee J in Collector of Customs v Western Australian Government Railways Commission (Westrail) (1995) 39 ALD 21. In that decision Lee J dismissed an appeal from a decision of the Administrative Appeals Tribunal that, under the legislation as it stood prior to the 1995 amendment, transportation of coal to fire an alumina treating plant was connected with mining operations. Lee J also noted that even if the definition introduced by the 1995 Act had been applicable, the transportation of the coal to the refinery would have satisfied the definition of “mining operations”. The respondent argued that these comments were obiter and Lee J did not have the benefit of submissions on the point and so should not be followed.
36. In its further submissions to the Tribunal on the effect of the 1996 Act, the respondent submitted that there is no relevant difference in the new definition of “mining operations” for the purposes of this matter. The Tribunal must still determine whether the journeys to and from the mines of the applicant’s explosive trucks actually are “mining for minerals” or actually are “the preparation of a site to enable mining for minerals to commence”.
37. The respondent also referred the Tribunal to the decision of Deputy President Forgie and Senior Member Beddoe in the matter of Re Queensland Railways and Regional Director of Customs (Queensland) (AAT 11092, 25 July 1996). In that decision the Tribunal discussed and decided not to follow the comments of Lee J in the Westrail case (supra). The respondent noted further that the Tribunal in that decision found that the transport of something essential for a rebatable activity was not itself a rebatable activity.

DECISION

38. As is evident from the Explanatory Memorandum to the 1996 Bill, the definition of “mining operations” as it currently stands in subs. 164(7) of the Act has removed the grammatical errors and is said to reflect the intentions of the Legislature. Having received further submissions from the parties on the effects of the 1996 Act, the Tribunal considers it appropriate to determine this application pursuant to the Act as it currently stands.
39. The diesel fuel rebate scheme is a targeted scheme providing rebate in respect of diesel fuel purchased by a person for use in mining operations. It is clear that “mining operations” as defined in subs. 164(7) of the Act means the matters referred to in paragraphs (a) and (b), and includes the activities specified in the paragraphs (c) to (v). As was noted in Re Queensland Railways and Regional Director of Customs (Queensland) (supra), paragraphs (a) and (b) should be given their ordinary meaning and are not limited or qualified by the meanings included in paragraphs (c) to (v).
40. It is fair to say that no one of the descriptive paragraphs (c) to (v) appearing in the definition of “mining operations” as that definition now reads would cover the subject journey. It is necessary in order for the applicant to succeed in its application to conclude that the relevant activities are covered by the words “(a) exploration, prospecting, or mining for minerals, the removal of overburden and other activities undertaken in the preparation of a site to enable mining to commence”.
41. Whilst it may have been intended that the concept of “mining operations” in the Act admits of an understanding “by the common person” as was stated in the Explanatory Memorandum to the 1995 Bill, it is nevertheless relevant to look to the purpose detailed in such Explanatory Memorandum and the Second Reading Speech referable to the 1995 amendment. In the Memorandum to the 1995 Bill, it is clearly stated that the rebate is to be available where diesel fuel has been used in the activities of exploring or prospecting for minerals and in particular activities that are sufficiently connected with mining. In the Second Reading Speech on the 1995 Bill, it was clearly indicated that the intention of the Legislature was not to pay rebate on diesel fuel used in activities that might be described as “encouraging mining operations ... in a general sense”. The scheme was designed to pay rebate for fuel used “in the act of exploring or prospecting for minerals and their subsequent mining and beneficiation”. The amendments were said to put beyond doubt that the scheme was not meant to provide rebate eligibility for activities which were not sufficiently connected with mining. In approaching the construction of the words of that paragraph, the Tribunal also notes the comments of Lee J in Dampier Salt (Operations) Pty Ltd (supra) as to the beneficial nature of the legislation which have not been disturbed in the decision on appeal in that matter: [See Regional Director of Customs (WA) v Damper Salt (Operations) Pty Ltd (Unreported, Full Federal Court, 12 June 1996, 452/1996)].
42. The undisputed facts in this matter are that the ingredients for the explosives are loaded into the MMU at the depot and the MMU is then driven to the mine site. At the mine site, the explosive ingredients are blended on the MMU from their storage tanks and then pumped down the drill holes by means of an MMU mounted pump and hose. In Re Cliffs Robe River Iron Associates and Collector of Customs (supra), the Tribunal noted at 222 that “[W]e are of opinion ... that “mining” carries its ordinary meaning - the extraction of ore”. Having regard to this conception of what constitutes mining for minerals, the Tribunal is satisfied that the use to which the MMU is put at the mine sites can be described as an activity which comes within the scope of the term “mining for minerals” or it is an activity undertaken in the preparation of a site to enable mining to commence, in that it precedes the actual extraction of the mineral.
43. The issue then, as it presents itself on the basis of the amended legislation, is whether the on-road journeys for which the applicant purchased diesel fuel can also be characterised as mining for minerals or an activity undertaken in the preparation of a site to enable mining to commence. The Tribunal finds it relevant that the MMU is a purpose built vehicle. In order for the applicant’s MMU to be used successfully at the mine site, it must be loaded with explosive ingredients at the depot and transported to the mine site. The MMU must return to the depot for more explosive ingredients if needed for the next contract. The Tribunal is satisfied in this matter that the applicant purchased the diesel fuel for use either in mining for minerals or an activity undertaken in the preparation of a site to enable mining to commence, and, in the circumstances of this case the on-road journeys to and from the mine site are an integral part of this activity. When the activities of the MMU are considered in this way, the on-road journeys are not activities that might be “loosely” described as encouraging mining operations, but are activities “in the act of exploring or prospecting for minerals and their subsequent mining and beneficiation”. The Tribunal is of the view that the factual situation in this matter can be distinguished from the circumstances in the Westrail case (supra) and Re Queensland Railways and Regional Director of Customs (Queensland) (supra). In those cases, the applicants for rebate were involved only in the transportation of the coal for use in the rebatable activity rather than actually being involved in that activity.
44. The decision under review is therefore set aside and the matter remitted to the respondent to calculate the appropriate rebate to be allowed.
    

I certify that this and the 19 preceding pages are a true copy of the decision and reasons for decision herein of

Presidential Member The Hon. Justice Rodney N PURVIS

Signed: .............Sgnd......................................................................

Associate

Date/s of Hearing 20 May 1996

Date of Decision 23 September 1996

Solicitor for Applicant Mr I Rodda

Rodda Bailey Vagg

Solicitor for the Respondent Mr R Northcote

Australian Customs Service