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Is the loading of timber into a wood-splitter to cut firewood and the subsequent loading of firewood onto trucks the milling of timber at a sawmill or chipmill for the purposes of the definition of 'forestry' under subsection 164(7) of the Customs Act 1901 ?

No. The loading of timber into a wood-splitter to cut firewood and the subsequent loading of firewood onto trucks is not the milling of timber at a sawmill or chipmill for the purposes of the definition of 'forestry' under subsection 164(7) of the Customs Act.

The client fells trees and cuts logs into blocks in the forest.

The client transports the timber, consisting of the blocks and smaller logs, via road, to their wood-yard.

In the wood-yard, a diesel-powered front-end loader is used to load the timber into an electrically operated hydraulic splitter. The timber is split by this machine into smaller pieces of timber suitable for firewood.

The wood-splitter has an electric motor to drive the hydraulic pump that operates two hydraulic rams. These rams push the timber onto fixed blades which split smaller pieces of firewood off the blocks or logs. On the return path, the hydraulic rams pull back the remaining uncut portion of the blocks and the process starts again.

The firewood is then stockpiled and later loaded onto trucks and trailers for sale, using the diesel-powered front-end loader.

Under subsection 78A(1) of the Excise Act 1901 and subsection 164(1) of the Customs Act, a diesel fuel rebate is payable to a person who purchases diesel fuel for use by them in forestry as defined. Subsection 164(7) of the Customs Act says that for the purposes of the Excise Act and the Customs Act, 'forestry' means: (a) the planting or tending, in a forest or plantation, of trees intended for felling; or (b) the thinning or felling, in a forest or plantation, of standing timber, and includes: (c) ... (d) the milling of timber at a sawmill or chipmill that is not situated in the forest or plantation in which the timber is felled; or...

In TJ Depiazzi & Sons v. Collector of Customs (1993) 17 AAR 557 (Depiazzi) , the Administrative Appeals Tribunal accepted the description of 'milling' and 'mill' adopted by the Tribunal in Westfi Pty Ltd v. Collector of Customs (1984) 7 ALN N8. It said that 'milling' is the process of subjecting something to the operation of a mill and a mill is a machine which does its work by rotary motion. Depiazzi also established that a mill can be either fixed and housed in a building or it can be moveable and designed to function at different locations. The emphasis is on function rather than the environment in which the function occurs and it is not necessary that to be a mill, the operation need be of a certain size or take a particular standard form. In essence, a machine which mills must be a mill.

In this case, the chopping of the timber into firewood occurs through the action of hydraulic rams pushing the wood into fixed blades. There is no rotary motion involved in the action. Therefore, the splitting machine is not a mill.

As the machine is not a 'mill', it can be neither a sawmill nor a chipmill within the definition of 'forestry' in subsection 164(7) of the Customs Act.

As the use of diesel fuel in the front-end loader to load the splitting machine and to load the firewood onto trucks for sale does not occur at a sawmill or chipmill, it cannot form part of the process of milling timber at a sawmill or chipmill for the purposes of the definition of 'forestry' under subsection 164(7) of the Customs Act.