McDonnell Douglas Canada Ltd. v. Canada
T-3025-89
Muldoon J.
7/8/96
28 pp.
Dispute about excise tax exemptions claimed, and refused, on computer components used in process of manufacturing aeroplane parts and structures, in particular, wings-Plaintiff purchased from Intermec Systems Corporation and IBM Canada Ltd. computer components to be used as part of and in manufacturing and production activities-Parties disputing question inherent in statutory term "directly"-"Directly" adverb derived from adjective "direct" which bears principle meaning-Dictionary definition most consonant with statutory expression "without intermediaries"-Computer products purchased by McDonnell Douglas from IBM and Intermec machinery and apparatus purchased for use directly in manufacture or production of goods, development of manufacturing or production processes for use by them-Had plaintiff been compelled to get along without computer apparatus in question, production and manufacturing of aeroplane wings would have lost speed and efficiency and could hardly, if at all, have proceeded with "just in time" delivery of needed materials to fabrication department-Computers acquired for use by plant workers directly in that industrial activity-In order to qualify for exemption, machinery, apparatus do not need directly to alter form, qualities and properties of goods, product of "manufactury" or other industrial arts plant-One integrated process of manufacture and production taking place in plaintiff's aeroplane-wing factory-Plaintiff lawfully entitled to exemptions provided in Excise Tax Act, Sch. III, Part XIII, s. 1(a)-Also entitled to refund of money paid over pursuant to Minister's assertion of tax payable, with interest-Excise Tax Act, R.S.C., 1985, c. E-15, Sch. III, Part XIII, s. 1(a).