Case: Commissioner for A.C.T. Revenue v Kithock Pty Ltd [2000] FCA 1098 ; (2000) 102 FCR 42
Outcome: distinguished
The disjunctive language used in the passages from Ha and Matthews demonstrates that a tax imposed on any one of the steps referred to will qualify as a duty of excise. For example a tax imposed on the sale of goods to consumers would be an excise, as would a tax imposed on the manufacture of goods without any necessary reference to their sale. In support of its contention Caltex relied particularly upon passages in Anderson's Pty Ltd v Victoria [1964] HCA 77 ; (1964) 111 CLR 353 ( Anderson's) and Bolton v Madsen [1963] HCA 16 ; (1963) 110 CLR 264 ( Bolton ), which were followed by the Full Court of this Court in Commissioner for A.C.T. Revenue v Kithock Pty Ltd [2000] FCA 1098 ; (2000) 102 FCR 42 ( Kithock ) . In Anderson's , Barwick CJ said at 364: [T]he judicial formulation of the nature of a duty of excise within the meaning of the Constitution has progressed over the intervening years. It has now, however, in my opinion, received definitive exposition by this Court, and, however much other views might have been possible at an earlier stage, it ought now to be taken as settled that the essence of a duty of excise is that it is a tax upon the taking of a step in a process of bringing goods into existence or to a consumable state, or of passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer. (Emphasis added.) 80 In Kithock [2000] FCA 1098 ; 102 FCR 42 , the Full Court held that a state tax imposed on used or second-hand motor vehicles was not an excise because it was a tax imposed on goods after they had reached the hands of consumers. The Court stated at 48: In [Bolton], the authoritative pronouncement of what is an excise was made by a unanimous High Court constituted by Dixon CJ, Kitto, Taylor, Menzies, Windeyer and Owen JJ (at 271): "It is now established that for constitutional purposes duties of excise are taxes directly related to goods imposed at some step in their production or distribution before they reach the hands of consumers ." (Emphasis added.) This formulation does not refer to the "ultimate" or "final" or "intermediate" consumer, but is expressed by reference to the plurality of consumers and therefore is a reference to the first consumer. In our opinion, this formulation is the authoritative test which this Court is bound to apply, with the consequence that the tax in question in this case is not an excise. 81 Each of the cases relied on by Caltex involved impugned taxes concerning goods ultimately intended for sale to third party consumers. The question of self-consumption did not arise in any of the cases and I was not referred to any cases in which the conception of a duty of excise had been limited in the manner contended for by Caltex. The Commissioner said that the statement of the Chief Justice in Anderson's 111 CLR 353 was intended to do no more than identify three ways of locating the incidence of an excise duty: the steps of (1) bringing into existence, (2) bringing to a consumable state or (3) passing them down the line to the point of receipt by the consumer. I agree. The passage is consistent with the understanding that an excise may be imposed on discrete steps taking place with respect to goods, without it being necessary that every step take place. The passage does not articulate a principle that excise duties are only those taxes that affect goods destined for consumption by parties other than the original manufacturer or producer. Similarly the emphasis placed by the Full Court in Kithock on the position of consumers was necessary to explain, by way of exclusion, that goods already in circulation amongst consumers cannot be the subject of an excise duty. It is by now clear that consumption taxes are not excises. While it is an essential characteristic of an excise that goods have not yet passed into consumption, I do not accept that it is essential that goods are intended to pass into a market or to be sold to a third party, even though that will be the ordinary occurrence. 140 I agree with the Commissioner that Caltex delivered the residual oils for home consumption for the purposes of the Excise Act . The Excise Act does not refer to delivery to a person but adopts the more ample language of delivery for or into home consumption. While I accept that the typical case of delivery will involve the movement of excisable goods from one person or place to another, the language of the Excise Act is sufficiently broad in my view to apply to the less typical case of consumption by a manufacturer at its own premises. The contention that the Excise Act necessarily requires the physical removal of goods from one place to another seems to me to give the concept of delivery for home consumption a restricted meaning not warranted either by the breadth of the language used or the evident purpose of the legislation, namely to tax manufactured goods consumed in Australia. In my view the use of the words "for" and "into" demonstrates a focus by the Excise Act on the status of excisable goods (that is, their readiness for consumption) rather than whether they have necessarily been transferred between people or places.