Words and Phrases - "directly"
D.MNR for Customs and Excise v. Amoco Canada Petroleum Co. Ltd., 86 DTC 6008, [1986] 1 CTC 124 (FCA)
The word "directly" in s. 1(a) of Part XIII of Schedule III to the Excise Tax Act was found to have a broad meaning of "without any intervening medium" rather than "immediately or without delay". Pipelines that distributed liquid hydrocarbons mix to a fractionation plant accordingly were "machinery and apparatus" that were used by it "directly in the manufacture or production of goods".
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Statutory Interpretation - Ordinary Meaning | 27 |
Lomex Inc. v. MNR, 92 DTC 2253, [1992] 2 CTC 2678, [1992] 1 CTC 2731, [1992] DTC 2246 (TCC)
An operation of transporting animal residues (e.g., bones, meatscraps, feathers, blood and offal) by specially-adapted trucks to the taxpayer's premises for processing constituted a qualifying activity of "receiving and storing of raw materials" under subparagraph a(ii). Garon J. stated (p. 2259):
"I am of the opinion that receiving raw materials occurs when the business in question, which is involved in manufacturing or processing in Canada, takes possession of the raw materials and thereafter has control of them ... The materials are, from that moment on, the property of the appellant and are at the risk of the appellant."
Furthermore, taking up the raw materials also came under paragraph (b) of the definition. Garon J. noted (p. 2258) that "we must interpret paragraph (b) in a large and liberal manner, so that it may include activities other than those already covered by paragraph (a) ...". He also noted that the words "directly" and "in connection with" mean "activities which, first, are connected with manufacturing and processing operations in Canada but are not an integral part of the actual manufacturing and processing process" (p. 2258).