Issue
Is diesel fuel purchased and used in self-elevating platforms, that are used to carry on drilling and blasting on the sea floor, used in 'marine transport' as defined in subsection 164(7) of the Customs Act 1901?
Decision
No. Diesel fuel purchased and used in self-elevating platforms, that are used to carry on drilling and blasting on the sea floor, is not 'marine transport' as defined in subsection 164(7) of the Customs Act?
Facts
Self-elevating platforms (SEP) are non-propelled units used to drill and blast hard rock material on the sea floor.
Diesel fuel is used to operate the hydraulic system to raise the SEP legs from the sea floor to enable it to be moved by tow.
Reasons for Decision
Paragraph 78A(1)(ac) of the Excise Act 1901 and paragraph 164(1)(ac) of the Customs Act provide that a diesel fuel rebate is payable to a person who purchases diesel fuel for use in 'marine transport'.
'Marine transport' is defined for the purposes of both Acts in subsection 164(7) of the Customs Act as: marine transport includes transport by vessels in or on fresh water, but does not include any transport relating to forestry.
In Re Port of Brisbane Corporation and Deputy Commissioner of Taxation [2004] AATA 222 (Port of Brisbane) the applicant submitted that, as the overall objective of a dredging operation was to maintain navigable channels in the Port of Brisbane and elsewhere, the fuel used in dredging was used in 'marine transport'. The Administrative Appeals Tribunal rejected the submission that the term 'marine transport' could be read so broadly:
The Tribunal reasoned at paragraph 31 that: ... the phrase "use in ... marine transport" should be accorded its ordinary and natural meaning. In this context, the normal association of 'marine' with the sea is extended by the definition of 'marine transport' in s 164(7) to include freshwater. That same definition, which 'includes transport by vessels in or on freshwater', while not an exhaustive definition because it is extending the ordinary meaning of 'marine' to include an association not only with sea water but also with fresh water, nevertheless refers to transport by vessels.
And further at paragraph 32 that: In the Tribunal's opinion, the key to the meaning of "marine transport" lies in the meaning of the word "transport". The Concise Macquarie Dictionary (3rd edition 1988) lists as the sixth meaning of transport: 6. a means of transporting, as a ship, truck or plane used for transporting soldiers or military stores, or convicts. The first meaning of transport in the Oxford English Dictionary is: 1. the action of carrying or conveying a thing or person from one place to another, conveyance. The use of the word "transport" in the phrase "marine transport" suggests a conveyance - something which does the conveying - a vehicle or vessel or aircraft which moves through its particular medium (land, water, air) carrying a thing or person. The medium in this case is, of course, water. Thus, ... "marine transport" should in this instance be interpreted as meaning the act of conveying a thing...
In Port of Brisbane Corp v. Deputy Commissioner of Taxation (2004) 57 ATR 545; (2004) FCA 1232, the Federal Court affirmed the comments of the Tribunal in Port of Brisbane in relation to the meaning of 'marine transport'.
In the present case, transportation is not the function of an SEP. The relevant diesel fuel is not used in the conveyance of a thing or person from one place to another through or over water.
Accordingly, the operations of the SEP are not 'marine transport' as defined in subsection 164(7) of the Customs Act for the purposes of the diesel fuel rebate scheme.