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For the purposes of subparagraph 78(1B)(1)(aa) of the Excise Act 1901 (EA), is diesel fuel rebate payable for diesel fuel purchased for use in the activity of excavation of a dam for fire-fighting in a forest?

The excavation of a fire-fighting dam in a forest is not an eligible activity for the purposes of subparagraph 78(1B)(1)(aa) of the EA. Therefore this activity does not give rise to entitlement to the diesel fuel rebate.

The taxpayer purchased diesel fuel for use in the excavation of forestry dams for fire-fighting purposes on behalf of an entity engaged in forestry.

The applicant submitted that the rebate is payable because the excavation of fire-fighting dams is included in the activity of forestry.

Subparagraph 78A(1B)(1)(aa) of the (EA) provides that a rebate is payable to a person who purchases diesel fuel for use by him or her in primary production other than for the purposes of propelling a road vehicle on a public road. Subsection 78A(7) of the EA provides that the same respective meaning is attributed to primary production as appears in section 164 of the Customs Act 1901 (CA). Subsection 164(7) of the CA provides that primary production includes forestry.

Subsection 164(7) of the CA provides also that forestry means 'the planting or tending, in a forest or plantation, of trees intended for felling'.

As the word 'tending' is not defined in the legislation, its ordinary definition must be used. The Macquarie Dictionary defines the word 'tend' as to 'look after'; watch over and care for; minister to or wait on with service.'

In the context of forestry, the ordinary definition of 'tending' amounts to activities designed to enhance growth, quality and vigour and composition of the stand after establishment or regeneration and prior to harvest. This definition appears in the Society of American Foresters' Dictionary of Forestry (1998).

The construction of dams for fire-fighting purposes is an activity where the relationship to the enhancement of the growth of specific and identifiable trees is absent. Furthermore, in the context of plantations the construction of dams for fire-fighting purposes is an activity that is properly regarded as antecedent to planting.

It follows that the construction of dams for fire-fighting purposes does not amount to 'tending' for the purposes of the forestry provisions and a rebate of duty is not payable under subparagraph 78(1B)(1)(aa) of the EA.