Terroco Industries Ltd. v. Canada
T-438-91
Rothstein J.
23/3/95
17 pp.
Whether diesel fuel used to run plaintiff's diesel engines when performing hot oil service to oil wells exempt from excise tax -- Plaintiff supplying services to oil wells in Alberta, including pumping of hot bunker oil down well to clear pipes of paraffin wax at bottom of pipes -- Excise Tax Act, s. 21(3.1)(c) providing exemption from excise tax for diesel fuel for use in generation of electricity -- During relevant period, May 1, 1987 to December 31, 1989, plaintiff claiming refunds of excise tax for diesel fuel said to be exempt under s. 21(3.1)(c) -- Three alternatives advanced by parties to determination of issue-Plaintiff's primary position prorating not permitted, entire claim should be allowed -- Two functions for which diesel fuel is used: generation of electricity for use in heating of oil and generation of mechanical power for pumping of oil -- S. 21(3.1)(c) only allowing diesel fuel for use in generation of electricity to be exempted from excise tax and not diesel fuel for use in generation of mechanical power -- Allowance of 2.5% of total fuel consumed reasonable estimate of fuel for use in generation of electricity-Plaintiff's claim allowed in part -- Excise Tax Act, R.S.C. 1970, c. E-13, s. 21(1) (as am. by S.C. 1976-77, c. 6, s. 2), (3.1)(c) (as enacted by S.C. 1986, c. 9, s. 11).