Chief Executive Officer of Customers v Goliath Portland Cement Co Ltd

Federal Court of Australia|1999-05-20|Before: Davis J, Ryan J

REASONS FOR JUDGMENT 1 On 9 February 1998 the Administrative Appeals Tribunal ("the Tribunal") issued a decision setting aside a reviewable decision of the present applicant, the Chief Executive Officer of Customs ("Customs"). The decision of the Tribunal was to the effect that activities respectively carried on by the respondents at Lilydale in Victoria and Loongana in Western Australia were "mining operations" within the meaning of s 164 of the Customs Act 1901 ("the Act") and were not excluded from "mining operations" because they involved mining for limestone so as to attract one of the exceptions to the definition of "minerals" in s 164. 2 So far as is relevant, s 164, at the time when it had to be applied to the operations of the respondents, provided "for a rebate to be payable for diesel fuel purchased for use, amongst other purposes "in mining operations (otherwise than for the purpose of propelling a road vehicle on a public road)."" 3 Sub-section 164(7) contained a number of definitions of expressions used elsewhere in the section and included the following: "mining operations" means (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 (b) the dressing or beneficiation of minerals, or ores bearing minerals, as an integral part of operations for their recovery; and includes: (c) if minerals, or ores bearing minerals, are dressed or beneficiated at a place other than the mining site as an integral part of operations for their recovery; (i) the transporting of the minerals or ores from the mining site to that place; and (ii) the return journey from that place to the mining site of the vehicles or equipment used in transporting the minerals or ores, if that journey is for the purpose of later carrying out the mining operation referred to in subparagraph (i) or for the backloading of raw materials or consumables for use in a mining operation referred to in paragraph (a) or (b); or ....... but does not include quarrying operations carried on solely for the purpose of obtaining stone for building, road making or similar purposes." "minerals" means minerals in any form, whether solid, liquid or gaseous and whether organic or inorganic, except: (a) sand, sandstone, soil, slate, clay (other than bentonite or kaolin), basalt, granite, gravel or water; or (b) limestone (other than agricultural use limestone)." 4 "Agricultural use limestone" was defined in s 164(7) as meaning: "limestone for use in the de-acidification of soil in any agricultural activity other than the activity referred to in paragraph (t) of the definition of "agriculture"." 5 Paragraph (t) of the definition of agriculture was in these terms: "(t) any activity undertaken for the purposes of soil or water conservation: (i) by a person who carries on a core agricultural activity within an approved catchment area; or (ii) by a person contracted by that person to carry out the first-mentioned activity; within the approved catchment area;" 6 The respondents are related companies, the first respondent ("David Mitchell") owning ninety per cent of the issued capital in the second respondent ("Loongana"). The following description of the operations of the respondent is taken from the reasons of the Tribunal: "The aim in relation to each site is to extract limestone through open-cut operations and subject it to calcination to produce, in the first instance, calcium oxide (CaO), commonly called quicklime or just "lime". In the case of the lime produced at Lilydale, one third is sold in that form for agricultural and industrial application, with the balance being further processed to produce calcium hydroxide (commonly referred to as hydrated lime). In the case of Loongana the calcium oxide (lime) is sold to the goldmining companies in the Kalgoorlie region for use in goldmining operations."

The issues It was accepted on both sides that, insofar as David Mitchell produced limestone at its Lilydale site for agricultural purposes, it was entitled to a rebate for diesel fuel used in that part of its operations. However, Customs contended that the operations at both Lilydale and Loongana were otherwise directed to the recovery of "limestone" within exception (b) to the definition of "minerals" in s 164(7) and therefore did not attract the rebate payable for diesel fuel used in "mining operations" which were entirely predicated on activities connected with "minerals". In the alternative, Customs contended that neither David Mitchell nor Loongana was engaged in mining for minerals but each was, rather, quarrying for limestone which is not a mineral nor an ore bearing a mineral which is dressed or beneficiated as required by para (b) of the definition of mining operations. 7 On the other hand, it was contended on behalf of David Mitchell and Loongana that their operations amounted to mining directed to the recovery of a mineral (calcite) and were not undertaken by way of extracting limestone for use in the form of limestone.

The Tribunal's Findings of Fact The Tribunal appears to have accepted the evidence of Mr Runge, the chief executive officer for both David Mitchell and Loongana, who, described the physical nature of the operations at both sites. Of his evidence, the Tribunal noted: "He told the Tribunal that the nature of the operations conducted at Loongana and Lilydale, the extraction methods used and the purpose for which material was extracted are substantially the same (exh H, p.2, para7). In each case the operations involve the removal of overburden, the extraction of limestone by use of open-cut mine benching system, involving drilling and blasting, removing the limestone and crushing it to a size suitable for calcining. The crushed ore is screened and good quality, suitably sized material is fed into a kiln and subjected to a temperature of approximately 1000 degrees centigrade for five or more hours. This process, in Mr Runge's words, "... creates a disassociation reaction and volatilises nearly half of the ore's weight as carbon dioxide, increasing the concentration of calcium in the calcined material to an average of 55% and increasing the calcium oxide content of the calcined material to an average of 77.5%", those figures representing operations at Lilydale (exh H1.para25). In the case of Lilydale, good quality undersize limestone is processed and sold for use as aglime, stock feed manufacture, soil improvement, market gardening and industrial filler; and, in the case of poor quality material, sold as Lilydale toppings for pathways, driveways and car parks, or as crushed rock for use in various forms of construction, or discarded to the dump located on the site. In the case of Loongana, high quality undersize material is transported by rail to Parkestone (located in Kalgoorlie) where it is processed through the kiln, with the other material simply being discarded. At Loongana, the calcining process increases the concentration of calcium to 59.3 per cent on average and the calcium oxide content to 83.0 per cent. In the case of material calcined at Parkeston the calcium content increases to 62.3 per cent and the calcium oxide content to 88.0 per cent on average."

The Questions Posed By The Tribunal 8 After an excursus into the question of whether David Mitchell's and Loongana's operations should properly be called "quarrying" or "mining", the Tribunal identified it as necessary to determine whether the limestone was being extracted at the two sites "for its mineral content." In the course of answering that question, the Tribunal noted that the Explanatory Memorandum in relation to the Bill for the "first amending Act [Act No 87 of 1995] stated that its purpose in amending the definition of "minerals" in s 164(7) of the Act was to exclude certain materials which are extracted from the ground because they are valuable as extracted "rather than for the purpose of recovering their valuable properties."

9 [Before the amendment effected by Act No 87 of 1995, the definition of "minerals" in s 164(7) was in these terms: "minerals" means minerals in any form, whether solid, liquid or gaseous and whether organic or inorganic." Item 6 of Schedule 1 to Act No 87 of 1995 added to that definition, after the word "inorganic", the words "except sand, sandstone, soil, slate, clay (other than bentonite and kaolin), basalt, granite, gravel, limestone or water." By s 2(3) of Act No 87 of 1995 the definition as thus amended came into operation on 1 July 1995. The amendment to the first amending Act which resulted in the definition of "minerals" emerging in the form reproduced in para 3 of these reasons was effected by Item 15 of Schedule 1 to Act No 21 of 1996 ("the second amending Act") and, by s 2 of that Act, was taken to have commenced also on 1 July 1995.] 10 As to the second amending Act, the Tribunal noted, at para 16 of its reasons: "The second amending Act did no more than restore the diesel fuel rebate to limestone used in agriculture without the need for it to be established that the limestone so used was extracted for its valuable properties. That amendment did not have the effect, either directly or by implication, of withdrawing the extraction of limestone from consideration as a "mining operation" if it is found to be, for instance, an ore bearing mineral."

(a) Are the activities at Lilydale and Loongana "mining operations"? 11 The Tribunal saw the resolution of this question as depending first on whether the activities were directed to the recovery of a "mineral". That question was answered by concluding, at para 17 of the reasons: "There is no dispute that in order to produce lime by calcination it is necessary to feed calcium carbonate (CaCO3) to the kiln. The calcium carbonate is in the form of calcite which is present in the limestone together with other materials. Both parties agree that calcite is a mineral. Thus the purpose of the extraction process is to obtain the mineral calcite." 12 The question was then asked whether the activities at the two sites were properly to be described as "mining" or "quarrying" for calcite. It was suggested that the form of the definition of "mining operations" in s 164(7) with its proviso that the expression "does not include quarrying operations carried on solely for the purpose of obtaining stone for building, road making or similar purposes", was apt to embrace quarrying in a wider connotation. After noting contentions on behalf of David Mitchell and Loongana that "in this case quarrying is a "subset" of mining" and referring to the evidence of usage gleaned from a publication of the South Australia Department of Minerals and Energy, para 17 of the Tribunal's reasons concluded: "On the basis of this evidence and that of the applicant's witnesses the Tribunal finds that the extraction process at Lilydale and Loongana constitutes "mining operations". Towards the end of his final submission Mr Northcote, on behalf of the respondent, conceded this point."

(b) Is Limestone an Ore? 13 The Tribunal next turned to the question of whether the limestone extracted at Lilydale and Loongana is an "ore". Evidence directed to that question was conflicting but, on the balance of that evidence, the Tribunal concluded, at para 29 of its reasons: "that on the basis of informed general usage as defined by the Tribunal, the limestone at the applicant's sites at Lilydale and Loongana is properly described as an ore which is mined at those two locations."

(c) Is Lime a Mineral? 14 This was the next question asked which was directed to the characterisation of calcium oxide or lime. The Tribunal reformulated it thus in para 34: "The question is, is calcium oxide produced by calcining calcium carbonate a mineral?" 15 The Tribunal then reviewed various examples of usage which had been introduced in evidence and which disclosed a tendency to include lime in lists of "mineral products", "industrial minerals", and "minerals". It noted that, in certain attempts to apply expressions in a statute by reference to the meaning attributed to them as a matter of usage, a choice may have to be made between "general" or "common" usage, "informed general" usage and "scientific" usage. As it did in deciding that limestone extracted from Lilydale and Loongana is an ore, the Tribunal directed itself by reference to "informed general usage", which, it concluded, "entailed that lime produced by calcining of David Mitchell's and Loongana's limestone is a "mineral"". The Tribunal found no warrant in the Act for confining "minerals" to naturally occurring substances and held that the expression is apt to comprehend manufactured products, like calcined lime, having the same chemical composition as naturally occurring substances like the lime found at Mt Vesuvius.

(d) Are David Mitchell and Loongana engaged in the "dressing or benefication of minerals, or ores bearing minerals", as an integral part of operations for their recovery? 16 The Tribunal reduced this question to one of whether the calcining of limestone constituted a dressing, beneficiation and recovery process. It rejected the contention, advanced in evidence on behalf of Customs, that what is fed into the kilns is limestone and that what emerges after processing in the kilns is still known as limestone. The Tribunal said, in para 54: "The term limestone may be used when referred to the material fed to the kiln but in fact it is the mineral calcite; its true and accurate description is, for example, "97.2% pure calcite". What is recovered in this integrated operation is not limestone but lime." 17 It was then observed, in para 55 of the Tribunal's reasons: "In the present matter the Tribunal notes the valuable element as confirmed by the witnesses is calcium, and that the average calcium content of the material at various stages is as follows: LILYDALE LOONGANA Limestone as mined 28% 34% Kiln feed 33% 38.6% Kiln produce 55% 59.3% (exhs H1 and H2)

The Tribunal has noted (supra) that the commercial production of calcium metal is by the chemical reduction of lime by aluminium. This is the last step in the process by which calcium is obtained from limestone. At each step the concentration of calcium is increased." 18 Accordingly, the Tribunal concluded, at para 56 of its reasons: "The finding of the Tribunal is that the total integrated process, from after extracting the limestone to the completion of the calcination process, constitutes dressing and beneficiation and recovery. The purpose of the mining operations is to recover lime, the elements of which are present in the calcite as mined. The lime is recovered by separating it from the elements of carbon dioxide with which it is associated in calcite and which, as a waste product, is discarded, in the same way that other minerals are freed from extraneous materials." 19 The Tribunal then drew a parallel between the calcining of marble (another form of calcite) and limestone since both consist, predominantly, of calcium carbonate. It was noted that the calcining of marble (having a minimum calcium carbonate content of 95%) attracted the diesel fuel rebate whereas the calcining of limestone at Loongana (having a calcium carbonate content of 97.2%) arguably does not. The only difference which the Tribunal was able to discern was that marble is in the form of a "metamorphosed limestone" whereas the Langoona limestone is not. Support was also derived from the fact that "the calcining of aluminium hydrate or hydroxide whereby water, chemically combined with the aluminium oxide, is driven off by calcining during the operations involved in extracting aluminium oxide from bauxite (a parallel operation to the driving off by calcining of carbon dioxide in the present case) enjoys the benefit of diesel fuel rebate (being considered by the respondent as a beneficiation process) and that was not contested by [Customs]."

Conclusion of the Tribunal 20 The combined effect of the resolution of the various questions which I have just identified led the Tribunal to conclude at para 58: "By virtue of the weight of evidence and a proper reading of the legislation, the Tribunal finds that: · the sites are mines. It is noted that the respondent concedes that fact. The process of getting the limestone is mining. · limestone is an ore. It is included as a mineral by definition of the Act; · the operations to physically upgrade the mined limestone at both sites and to prepare it for calcination constitute dressing, · the calcining process constitutes beneficiation (an overall term which includes dressing), · lime is a mineral and thus the activities of the applicants in relation to their claims on this matter are "mining operations" being mining for minerals, and the dressing or beneficiation of minerals, or ores bearing minerals, as an integral part of operations for their recovery pursuant to s.164 of the Act."

The effect of the exception of limestone from "minerals". 21 The first focus of Custom's attack on the reasoning of the Tribunal was on the second conclusion in para 58 of the Tribunal's reasons quoted at para 20 above that "limestone is included as a mineral by definition of the Act." There is much force in the criticism of that conclusion as disregarding the express specification of limestone as an exception from the very wide definition of "minerals" to mean "minerals in any form, whether solid, liquid or gaseous and whether organic or inorganic." I accept that those words in their full generality are wide enough to comprehend limestone. However, limestone and the other, presumptively mineral, substances or compounds listed as exceptions in sub-para (a) to the definition of "minerals" have been excluded from the general class of minerals into which they would otherwise fall. 22 Support for this construction of the exception is derived from the removal by Act No 21 of 1996 of "limestone" to a separate sub-paragraph of the exceptions to the definition of "minerals" and by the exclusion from that wide exception imported by the words in parenthesis "(other than agricultural use limestone)". I disagree with the conclusion of the Tribunal that: "The second amending Act did no more than restore the diesel fuel rebate to limestone used in agriculture without the need for it to be established that the limestone so used was extracted for its valuable properties. That amendment did not have the effect, either directly or by implication, of withdrawing the extraction of limestone from consideration as a "mining operation" if it is found to be, for instance, an ore bearing mineral." 23 That conclusion starts from the premise that there was, before the amendment effected by Act No 21 of 1996, already an implied exception to the apparently wide connotation of "limestone", which embraced limestone mined or quarried, not for its valuable properties as extracted, but for deriving inherent substances including calcite. Had it been Parliament's intentions to preserve an existing implied exception to the limestone which did not attract the diesel fuel rebate, it would have been natural to make that exception express at the same time as it introduced the express parenthetical exclusion designed to extend the rebate to the production of "agricultural use limestone". In this regard, I respectfully agree with the reasoning of Heerey J in Chief Executive Officer of Customers v Goliath Portland Cement Co Ltd [1999] FCA 666 (unreported, 20 May 1999) where his Honour observed: "25. If "limestone" has been expressly excluded from the statutory definition of "minerals" it seems to me to follow inexorably that the essential and defining component of limestone, namely calcite, must also be excluded. One cannot mine for calcite without mining for limestone, and vice versa. Goliath's argument requires treating the exclusion as if it read "(other than agricultural use limestone or limestone where what is sought is not the limestone as such, but a mineral that is found in the limestone). ........ 27. This conclusion is confirmed by the restoration of the rebate for limestone, but limited to agricultural use limestone. Likewise, by expressly excluding bentonite and kaolin from the exclusion of clay, Parliament has indicated that there is no room for any further exception for clay by reference to its components."

Is the effect of the exception of limestone avoided by characterising an operation as the extraction of calcite? 24 The Tribunal found that the purpose of the extraction processes undertaken by David Mitchell and Loongana was to derive calcium carbonate (CaCo3) in the form of calcite for use as a feedstock in kilns to produce lime. Calcite, it was noted, is present in the limestone together with other minerals. Indeed, one witness, Mr Elvish, a consultant metallurgist called by Customs, testified that, before going into the kiln, calcite is "still in the form of limestone". 25 It has to be borne steadily in mind that the rebate ordained by s 164 of the Act was, relevantly, payable for diesel fuel for use in "mining operations". That requirement directed attention to the definition of "mining operations" as "exploration, prospecting or mining for minerals" (emphasis added). For the activity to qualify as a "mining operation" it is essential that the object being mined for be a "mineral". However, in support of its conclusion that the extraction process at Lilydale and Loongana constituted "mining operations" the Tribunal said, at para 17 of its reasons: "The legislation at s 164(7) defines "mining operations" as, inter alia, "mining for minerals" but goes on to exclude "quarrying operations carried on solely for the purpose of obtaining stone for building, road making or similar purposes". The wording suggests that, even if the activities of the applicant were described as "quarrying", such activities would be properly included as mining operations if they were not carried on "solely for the purpose of obtaining stone for building, road making or similar purposes." That is the case with the applicant, since in the case of both sites only 18.7 per cent of sales represents "road products" (exh H). This supports the contentions of a number of the applicant's witnesses that in this case quarrying is a "subset" of mining." 26 In my view, by concentrating on whether David Mitchell and Loongana were engaged in "quarrying operations for the purpose of obtaining stone for building" etc., the Tribunal lost sight of the critical question of whether the object of the extractive process was a "mineral". What I regard as the correct approach in this context is illustrated by the reasoning of Burchett J (with whom Northrop and Spender JJ agreed) in Neumann Dredging Co Ltd v Collector of Customs (Qld) (1987) 79 ALR 488 where his Honour said, at 588-589: "It is, of course, undoubted that both "mining" and "minerals" are words of imprecise and potentially wide meaning, which must be understood according to the context in which they are used. But, in construing s 164, one cannot overlook the High Court's decisions on the similar usage of the expression "mining operations" in NSW Associated Blue Metal Quarries Ltd v FCT (1956) 94 CLR 509, and North Australian Cement Ltd v FCT (1969) 119 CLR 353. The word "minerals", as Dixon CJ and Williams and Taylor JJ pointed out in the appeal in the former of those cases (at 522) is perhaps as difficult as the word "mining"; and the difficulty is emphasised if one looks at the definition given in the Shorter Oxford English Dictionary, which gives the first meaning as: "Any substance which is obtained by mining." A settled view would exclude activities such as quarrying for blue metal, which are unrelated to an ordinary understanding of "mining" as the word is used in Australia today. Likewise, in my opinion, the settled meaning of the expression "mining operations", and in particular of the expression "mining for minerals", would exclude the activities of the appellant. ............ In s 164, the words of non-inclusion are added to avoid any suggestion that the quarrying referred to is included: but there was a real risk that it might otherwise have been included by virtue of para (c) of the so-called definition. That is a sufficient explanation of the presence of those additional words. There is, of course, no suggestion that para (c) has any application in the present case." 27 Neumann Dredging was applied by a Full Court of this Court in CSR Ltd v Chief Executive Officer of Customs (1997) 26 AAR 84 where, after quoting the passage just cited, it was observed, at 92: "In the present case it can be said the exclusions were inserted to avoid any suggestion that the particular quarrying activities there mentioned, concerning stone, were to be treated as included in the definition. That does not imply that the quarrying of another material, such as sand or rock, must be categorised as mining operations." 28 The Tribunal in the present case referred to CSR Ltd v Customs at para 6 of its reasons when it said: "....the Tribunal should distinguish between the circumstances with which it is here dealing from those dealt with in cases such as Boral and Chief Executive Officer of Australian Customs (1996) 24 AAR 253 and CSR Limited and Chief Executive Officer of Customs (1997) 47 ALD 747 and affirmed by the Full Court of the Federal Court in CSR Limited and Ano v Chief Executive Officer of Customs (1997) 26 AAR 84. In the latter cases the Tribunal was dealing with the exception occurring at the end of the s 164 definition of mining operations in the Act, i.e. it is not contended that the applicant is carrying on its operations solely for any of the purposes identified, i.e. obtaining stone for building, road making or similar purposes. It may be that in the case of the Lilydale operation some of the material extracted is used for those nominated purposes, but the operations are not carried on "solely" for those purposes." 29 As I understand it, the Tribunal's reasoning involves the premise that, if an activity is outside the exclusion from "mining activities" imported at the end of the definition of that expression in s 167(4), it is to be regarded as within the definition. That is to beg the questions of whether the activity is "mining" and whether it is "for minerals" which was the very error castigated by Burchett J in Neumann. 30 The difficulty is not avoided by asking whether limestone is an "ore" within para (b) of the definition of "mining operations". That paragraph, it will be recalled, includes within the concept of "mining operations": "(b) the dressing or beneficiation of minerals, or ores bearing minerals, as an integral part of operations for their recovery." 31 The terms of paragraph (b) make it clear that "minerals" and "ores bearing minerals" are mutually exclusive concepts. It is necessary, first, to identify the mineral or minerals which are sought to be recovered before it can be determined whether an aggregate or ore body is being dressed or beneficiated to "recover" that mineral or those minerals. The notion of recovery of minerals is central to the application of para (b) of the definition of "mining operations"; (see State Rail Authority of New South Wales v Collector of Customs (1991) 33 FCR 211 at 215). Regional Director of Customs (WA) v Dampier Salt (Operations) Pty Ltd (1996) 23 AAR 252 similarly concerned the limits of "the production of common salt by means of evaporation" which was expressly included by a specific paragraph in the definition of "mining operations". The Full Court equated that form of production with the "recovery" of minerals discussed in State Rail Authority of New South Wales v Collector of Customs (supra). 32 Recovery in this sense involves the freeing or separation of the designated mineral from the ore body in which it inheres. Thus, in Federal Commissioner of Taxation v ICI Australia Ltd (1972) 127 CLR 529 Barwick CJ observed, at 567: "In the mining to recover many metals what is brought out of or up from the earth is a substance in which the metal is embedded or intermixed. The recovery of the metal is a process of freeing it from that total substance, in general referred to as the ore or ore body. A mineral is defined in the Shorter Oxford Dictionary as "any substance which is obtained by mining. In early and modern technical use the ore (of a metal)". It does not seem to matter whether the process of freeing the mineral is mainly physical or chemical. In general, the process of freeing the metal leaves on the one hand the metal and on the other a residue. I much doubt whether that residue, for example, the sand resulting from the flotation process used in the barrier mines, or the quartz after the removal of the gold in the case of gold recovered from reef gold or the dross after a cyanide process is properly called the ore or the metal's ore. That term, it seems to me, is properly used to describe the substance in which the metal has been found whilst still embedded in or intermixed with it. But the section treats that from which the metal is separated as the ore of the metal. But be that as it may, in general, the "separation" of the metal leaves two physically identifiable substances, usually solids." 33 See also Abbott Point Bulk Coal Pty Ltd v Collector of Customs (1972) 35 FCR 371 where in a joint judgment Cooper J and I observed, at 378: "Whether an activity falls within the definition of "mining operations" as defined in s 164(7) of the Customs Act is a question of fact. So too is the question of when recovery is complete. In each case a commonsense and commercial approach has to be taken to the question having regard to the evident purpose of the legislation, to make rebates available to promote the exploitation of mineral deposits in Australia. However, a point is reached where the mineral has been recovered and what is done with it thereafter is the use or processing of it for its better use as a mineral. Although care needs to be taken in referring to decisions on other legislative enactments to determine the meaning of "mining operations" in the Customs Act, the authorities do give some understanding as to the common or ordinary acceptation of that term." 34 After referring to Commissioner of Taxation v ICI (supra) and Commissioner of Taxation (Cth) v Broken Hill Pty Co Ltd (1969) 120 CLR 240 at 273, the joint judgment continued, at 379: "The process of recovery includes, in our view, those steps which are taken by a miner before sale, by whatever process, to remove the mineral from that in which it is embedded or with which it is intermixed. Such a process comprehends the refining of minerals or ore to remove impurities naturally occurring in the material as it has been mined. Once the process of separation or refining has been completed, to subject the mineral product to a process or procedure designed purely to facilitate its better use as so separated or refined or to render it more readily or advantageously marketable is not in our view part of the recovery process." 35 This case may be contrasted with Chief Executive Officer of Customs -v- Tasmanian Electro Metallurgical Co Pty Ltd (1997) 76 FCR 476 ("the Temco Case") where Merkel J held, at 490, that recovery of a mineral can occur within the terms of s 164(7) not withstanding that the process involves removal of impurities, chemical change and the introduction of additives. In the Temco Case it had been found that pyrolusite and chryptomelane were ores bearing manganese which it was open to the Tribunal to find was a mineral. Accordingly, sintering and smelting processes directed to the recovery of the manganese were within "mining operations" as defined. In the present case, limestone is not capable of being characterised as an ore of calcite or lime. 36 In Chief Executive Officer of Customs v West Australian Government Railways Commission [1999] FCA 1465 (unreported, 27 October 1999) a Full Court of this Court was concerned with whether rail transport was in beneficiation of bauxite which was concededly a mineral. It was held, by majority, that it was open to conclude on the facts that the transport had occurred "in" the beneficiation of bauxite. The corresponding question here is whether the calcining process is part of the beneficiation of limestone, but an affirmative answer to that question cannot assist David Mitchell or Loongana because of the statutory exclusion of "limestone" from the definition of "minerals". The refining of bauxite to produce alumina was also considered by Northrop J in Reynolds Australia Alumina Ltd v Commissioner of Taxation (1987) 14 FCR 386 and similar reasoning was applied to include in "mining operations" the smelting (but not milling) of nickel in Western Mining Ltd v Collector of Customs (Western Australia) (Administrative Appeals Tribunal, Davis J and Messrs Wilkins and Pascoe, unreported 30 March 1984). 37 For these reasons, I consider that the activities at Lilydale and Loongana are properly characterised as the recovery of limestone. It is true that calcite is the commercially valuable constituent of limestone but that does not entail that limestone is an ore of calcite. As I understand the process, nothing is done to separate calcite from the limestone before the limestone is fed into the kilns to produce lime. Counsel for David Mitchell and Loongana emphasised that, before calcining, the limestone is subjected to screening, crushing and "picking" to ensure that it has an acceptably high calcite content. That feature would tend to support the characterisation of the process as the dressing or beneficiation of limestone, but not as part of operations for the recovery of calcite. Accordingly, I have concluded that the Tribunal erred in holding the total integrated process to the completion of calcination included dressing and beneficiation for the recovery of a mineral other than limestone.

Lime not a mineral 38 As the conclusion which I have just reached implies rejection of the proposition that lime which ultimately emerges after calcining is a mineral as defined in s 164 of the Act, it is appropriate to outline the reasons which underlie that rejection. As indicated at para 25 above, the essential quality of "minerals" as used in the definition of "mining operations" in s 164(7) is that they are mined for. Lime, or calcium oxide, as produced by David Mitchell and Loongana, does not occur naturally either in its own right or as a constituent of limestone. It is important to bear in mind that "minerals" in this context is used as a substantive and does not necessarily have the same connotation as "mineral" used in other contexts as an adjective. Thus, whilst it may be accurate to speak, as the Tribunal, did of limestone being extracted for its "mineral" content, it does not follow that its constituent, calcite, or the lime which is derived by driving off the carbon dioxide from the calcite, is a "mineral". 39 The meaning to be given to the noun "minerals" in s 164(7) is to be gathered as a matter of construction from the definitions contained in that sub-section read as a whole. Whether an Act uses an expression in any other sense than that which it has in ordinary speech is always a question of law. (See NSW Associated Blue Metal Quarries Ltd v Federal Commissioner of Taxation (1956) 94 CLR 509 at 511 - 512 as applied in Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 397). Consistently with the view taken in NSW Associated Blue Metal Quarries Ltd, I regard the expressions "mining operations" and "minerals" in s 164(7) as having the same meaning as they have in ordinary speech subject to any extensions or limitations of that meaning which are imported by the definitional treatment of the expressions in the sub-section. 40 One limitation on the ambit of the meaning which the noun "minerals" has in ordinary speech is that it denotes substances which can be won by mining. Thus in the Oxford English Dictionary 2nd Edn Vol IX "mineral" is relevantly defined as a noun to mean "Any substance which is obtained by mining; a product of the bowels of the earth". 41 That denotation is reinforced by the definition of "mining operations" in s 164(7) with its concentration on "mining for minerals" and the "recovery" of minerals of which mining is regarded as an integral part. 42 Against that background, it is not to the point for the purpose of construing "minerals" in s 164(7) to instance examples of usage which comprehends as "minerals" substances which do not occur naturally and are not capable of being won by mining. They include what the Tribunal referred to as "mineral products" and "industrial minerals". Nor does it assist in ascribing a meaning to "minerals" in s 164(7) to observe that the usage of the expression in other contexts can be regarded as "informed general usage". The danger of regarding an informed general usage as fixing the denotation of an expression for all purposes is illustrated by the Tribunal's acceptance, at para 43 of its reasons that "a mineral product has to be a mineral". 43 The same flaw in the Tribunal's reasoning infects the conclusion, also in para 43 of its reasons, that: "Thus, on the basis that the process by which lime is produced from calcite in a kiln by the applicants and the process by which lime is produced from calcite in nature are similar, as presumed by Mr Parsons, and have the same chemical composition, as agreed by Mr Elvish, then if the natural lime is a mineral, so is the applicant's product. The contention on the part of the respondent's witnesses that the lime produced by the applicants is a manufactured product could equally apply to the naturally occurring substance. It does not disqualify the lime produced by the applicants from being a mineral. The Act does not specify that a mineral should be naturally occurring, or the term should not include industrial minerals or mineral products or synthetic minerals." 44 Whilst it is a truism that the Act does not specify that a mineral should be naturally occurring, what it does specify is that it is something which is mined for. The fact that a synthetically produced substance may occur naturally elsewhere and, in those circumstances, be "mined for", does not warrant equating the synthetic producer's activities with mining for a mineral. That was the unjustified equation made by the Tribunal when it said, at paras 47 and 48 of its reasons: "47. The likely origin of the calcium carbonate found in nature was given in oral evidence. Mr Parsons presumed that when lime occurs in nature it occurs because nature has ".......done exactly the same process, that is, applied the heat to the calcium carbonate." (trans, p.335). The Tribunal was told that when calcium carbonate is heated to the appropriate temperature during the calcining process (and, as presumed by Mr Parsons, also during the natural process which formed the lime found at Mr Vesuvius) it dissociates to form calcium oxide and carbon dioxide. Thus the elements of lime (calcium oxide) and the elements of carbon dioxide are associated in calcium carbonate (calcite) and therefore in the limestone being the calcite ore. 48. On the basis of the evidence, including the fact that lime produced by calcining calcite and the naturally occurring substance have the same chemical composition, the exhibits tendered which refer to lime as a mineral, or a mineral product or an industrial mineral, the recognition that there may be two schools of thought on the matter of classification and the provision in the Act for "minerals" to mean "minerals in any form", which the Tribunal finds includes in the form of mineral products or industrial minerals, the Tribunal finds that lime is a mineral for the purposes of the Act." 45 There was no evidence of any systematic recovery by "mining" of lime naturally occurring at Mt Vesuvius or elsewhere. Nor did the evidence disclose any usage whereby the activities or establishments of David Mitchell and Loongana or any other producer of "synthetic" lime have been referred to as "mining for lime" or "lime mines".

Conclusion 46 For reasons which I have endeavoured to explain, I have concluded that it was not open to the Tribunal to characterise the activities of David Mitchell or Loongana, except to the extent that they were directed to the recovery of agricultural limestone, as "mining operations" within the meaning of s 164 of the Act. 47 Counsel for the respondent pointed out that this conclusion entails the apparent anomaly that the extraction, for the purpose of producing lime, of marble which is metamorphosed limestone having a similar calcite content, will attract the rebate whereas the extraction of limestone for the same purpose will not. That anomaly, if it be one, results from the intractable language of the definition of "minerals" and the express exception therefrom of "limestone". If policy considerations mandate the removal of this suggested anomaly, they will be for Parliament, and not the Court, to implement. 48 The conclusion which I have reached depends, as I perceive, on the application of s 164 on its proper construction to facts found by the Tribunal or not in dispute. In those circumstances, it is appropriate for the Court to frame orders finally disposing of the matter rather than to remit it for further consideration by the Tribunal; see eg Statham v Commissioner of Taxation (Cth) (1988) 89 ATC 4070 as applied by another Full Court in Commissioner of Taxation v Emmakell Pty Ltd (1990) 22 FCR 157 at 164-166. 49 Accordingly, the application for review will be granted, the decision of the Tribunal set aside, and the decision of the applicant refusing the respondents a diesel fuel rebate reinstated. The respondents must pay the applicant's costs of the application. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice RYAN.

Counsel for the Applicant: Mr A Robertson SC with Dr A Gelbert

Solicitor for the Applicant: Australian Government Solicitor

Counsel for the Respondent: Mr J De Wijn QC with Mr M Bearman

Solicitor for the Respondent: Mallesons Stephen Jaques

Date of Hearing: 14 and 18 September 1998

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