QUESTION OF DUTY.

New Zealand Herald, Volume XLIV, Issue 13625, 19 December 1907, Page 7

QUESTION OF DUTY.

CUSTOMS DEPARTMENT SUED. ,AN IMPORTANT DECISION. At the Auckland Supremo Court yesterday, before Mr. Justice DennisLon, au action to ascertain whether certain articles of imported machinery were liable to duty was brought by the Waihi Gold Mining Company against the Collector of Customs. His Honor was asked to decide whether certain articles imported by the company, comprising shafting, couplings, pedestals, wrought iron belt, pulleys, and clutch for driving tube mills by a gas engine, were exempt from duty as mining machinery, or whether they wore liable, and, if so, to what duty. Mr. T. Cotter, with Mr. Tunks, appeared for tho company, and the Hon. J. A. Tole, K.C., appeared "for the Collector of Customs., Mr. Cotter, in opening the case for tho company, said tho defence was that tho articles in question were liable to a 20 per cent, nd valorem duty, as " manufactures not otherwise enumerated." Counsel argued at considerable length, and cited authorities in support of his contention that the articles in question were exempt from duty as gold mining machinery. Mr. Tolo contended that the articles were not machinery at all, and the position taken up by the Customs Department was that they were only a mechanical appliance for the transmission of power. They were used for intermediate gearing, and, were parts of machinery that could bo applied to any other industry. The exemption from duty under the Act should be confined to that part of machinery which was purely applicable to the extraction of pure gold. After further legal arguments on the point, evidence was called on behalf of the Customs Department in support of the contention that the articles in question were not exclusively used for gold mining.

George Eraser, a member of the firm of George Fraser and Sons, Limited, ironfounders, Auckland, said ho had seen the plant in question. The appliances were not specially for gold-saving purposes. John Pierce Luke, of the firm of S. Luke and Co., ironfounders, deposed that he did not consider the plant special machinery for gold mining. Frank Cooper, a member of the firm of Cooper and Co., Christchurch, said he had visited the mine, and seen the machinery parts in question, Witness bore out the contention of the two previous witnesses. Mr. Robertson, partner in the firm of Robertson and Co., ironfoiindersr Wellington, deposed that, in his opinion, the machinery was simply machinery for the transmission of power for any purpose. It was universally used in all factories. Thore was nothing special about it, and the gear could be used for every purpose. "It would not be the first time I have seen an old gold mining plant driving a sawmill," added witness. (Laughter.) Henry Metcalfe, civil and mining engineer, gave similar evidence. In reply to His Honor, witness said tlmt, in hi« opinion, gold saving began when the gold passed over the tables. Mr. Cotter: Supposing a miner finds a substance containing gold, what does ho do?

Witness: He usually spits on it. (Laughter.) Mr. Cotter': When that little operation is finished, what then? His Honor: Then he proceeds to form a company. (Loud laughter.) Mr. Cotter: When a mine puts the ore on one side, is it not usually taken to some battery for crushing? Witness : Yes. Mr. Cotter: And then it goes through an operation by which gold is obtained from it? Witness: Yes. Mr. Cotter: Do you say then that tlio gold-saving process commences directly this, gold-bearing stone is put on one side? . "; Witness: I think the process begins when, they break down the reef. ■■"•' Mr. Cotter: You say it begins there. Is not, in your opinion, the battery always considered part of the mining operations? Witness: Oh, yes. Arthur John, professor of mining at the Auckland Technical College, and Charles Richard Massey, a member of the firm of Mas Key Brothers, also gave technical evidence. Mr. Tole submitted that the evidence was overwhelming in demonstrating the character of the machinery, and he urged that the ease must be viewed from the point of view of the Customs Department, and from the point of view of revenue. The tariff i had given great concession* to the mining industry, and the matter must be considered from the Department's standpoint of scrutinizing these goods and taxing them according to the tariff. _ He (Mr. Tole) submitted that this machinery was suitable for mining purposes in common with other purposes. If the mine was disposed of to-morrow, the machinery could be utilised for other purposes. Counsel argued that the Mining Act was to regulate the proper working of mines, avid lie further contended that the classification of the machinery as made by the Customs Department was the correct one, and, therefore, the articles were liable to duty. Mr. Cotter disagreed with Mr. Tole's contention that the articles were liable, for duty, and said that the Legislature had, in order to encourage the gold mining industry, exempted this particular class of machinery. He submitted that these articles were machinery for mining purposes, and also • machinery for the purpose of gold savins.

THE JUDGMENT. His Honor, delivering judgment, said the question raised in this case Avas whether the articles mentioned in the .statement of claim •were within either the exceptions contained in the Customs and Excise Act, 1895, as "machinery for the purpose of gold saving," or schedule 1} of the Act of 1900, as " machinery of every description for mining purposes." Dealing with the latter first, one had to ask what was the moaning of the phrase. Was it not machinery for the pui-poset>of mining? The test which the Legislature had adopted was,. what was the object of the machinery Every component part wan to bo for mining purposes. Was the machinery, as a whofe, to be used for mining purposes? That was strengthened by the argument that the next item in the Act of 1900 exempted machinery "exclusively for the manufacture of beetroot, sugar." . Therefore, • the legislature intended that the parties, should get only machinery suitable for mining purposes., Tho Legislature had specifically excluded steam engines and boilers, and but for that these would have been within the exemption. It had been said that we must look at the Act and its objects. There was nothing in the Act to suggest the object of the Act. The object was to relieve the mining industry. Coming to the other exemption, was it within the phrase "mining purposes?" Did it come within the exemption of machinery for mining purposes? It had been said that this machinery was not for the purpose of mining, but His Honor was not prepared to say it was so limited. The stuff was brought to the surface, and then tho gold-saving appliances were applied. There was an intermediate dealing with the ore before the gold was extracted. Was not the treating of ore for the purpose of saving gold when it consisted in the crushing of the ore so as to make it subject to the process of gold saving? In Chambers' case (16, New Zealand Law Reports), Judge Conolly took a different view. Tho whole was a series of steps all depending on each other, and each step was for the purpose of saving the gold. His Honor said he had been referred to the verdict which was given by a special jury, which had had the question submitted to it by the Government. In that case it was purely a question of fact. He (Judge Dennistou) was not' bound by it, but he did not think His Honor's attention hud been sufficiently drawn to the distinction between the words " purposes," and " processes." No decisions had been quoted against that. He (Judge Denniston) decided that question quite independently of the Mining Act. The definition in that Act of " mining .purposes" would certainly bring it within the exemption of the Act of 1900. The only question at bottom was whether

or not the shafting, clutches, pulleys, and podestals could bo called part of the machinery. That seemed to him the most arguable point of the case. These formed part of a new plant for the purpose of dealing with ore, and resolving it into separate elements, if one could correctly use the word. They formed part of the whole machinerytho whole scheme —and undoubtedly it was a whole. His Honor did not see bow tho machinery necessary for transmitting the power from the engine to the machinery for the wiving of the gold could bo cut out from the rest of the machinery. Mr. Justice Williams said (7, New Zealand Law Reports) that tubs were exempted. In tho Queen vemuß Matty the point was made quite clear. The threshing machine engine was held to form part of the whole machine for threshing. The case was heard by a very strong Bench, and Mr. Justice Crompton summed it up by stating that he thought the plaintiff was entitled to succeed, and in his (Judge Crompton's) opinion no duty was payable in respect of the articles mentioned in the statement of claim.

The judgment of the Court was that tho Government refund tho deposit, with interest at eight per cent., with costs on tho lowest scale.