CUSTOMS AND EXCISE |
Excise Tax Act |
Shell Canada Products Ltd. v. Canada
T-1956-01
2002 FCT 1304, Gibson J.
19/12/02
18 pp.
Shell Canada Products Ltd. (plaintiff) appealed from notice of determination denying claim for refund of excise tax paid on gasoline used as cleaning solvent--Notice of determination and confirmation at issue related to two sales of large quantities of gasoline made by plaintiff to Interprovincial Pipe Line Inc. (IPL) in 1998--Excise tax remitted on two sales in excess of $400,000--Whether gasoline producer selling gasoline to purchaser using gasoline as solvent and not in internal combustion engine liable to pay tax imposed by Excise Tax Act, s. 23--Court stated question of law to be determined on basis of agreed statement of facts--On July 25, 1998 and on September 14, 1998, plaintiff sold gasoline manufactured by plaintiff to IPL for use as solvent in one of IPL's pipelines--IPL did not use gasoline in internal combustion engine--Act, s. 23(1), (2) imposing excise tax on goods mentioned in Schedules I and II to Act payable by manufacturer or producer at time of delivery--Gasoline, as defined by s. 2(1), meaning gasoline-type fuels for use in internal combustion engines other than aircraft engines-- Present dispute turned essentially on meaning of words "for use" in definition of gasoline--In Deputy Minister of National Revenue for Customs and Excise v. Steel Company of Canada Limited (1983), 83 DTC 5301 (F.C.A.), Court wrote expression "for use" clearly envisaging question of liability for exemption from sales tax to be answered before utilization of goods--According to agreed statement of facts, parties to sales of gasoline understood sales to be of gasoline for use other than in internal combustion engines--As noted in Steel Company, expression "for use" clearly envisaging determination before utilization of goods--In present case, time that of sale and purchase--Vendor and purchaser intended utilization of gasoline not for internal combustion engines--Intention strengthened by acknowledgments reflected in agreed statements of facts--Accordingly, Act, s. 23 not applying to sales of gasoline used as solvent--Action allowed--Excise Tax Act, R.S.C., 1985, c. E-15, s. 23(1) (as am. by S.C. 1993, c. 25, s. 55), (2) (as am. by R.S.C., 1985 (2nd Supp.), c. 1, s. 187).