Customs and Excise v Ebbcliff Ltd.

This appeal is about the applicability of an exemption from landfill tax. It is an appeal by the taxpayer, Ebbcliff Ltd. (“Ebbcliff”), from the order made on 19 December 2003 by Etherton J., allowing the appeal of the Respondents, the Commissioners of Customs and Excise (“the Commissioners”). They have the care and management of landfill tax. They had appealed from part of the decision dated 4 April 2003 of the VAT and Duties Tribunal (Dr. Nuala Brice and Mrs. S. Saddeque MBCS), whereby it allowed Ebbcliff’s appeal from a review decision of the Commissioners that certain waste disposals made by Ebbcliff did not come within the exemption from landfill tax for site restoration. The appeal is brought with the permission of Jacob L.J.

It is convenient to start with the applicable legislation. Landfill tax was introduced in Part III of the Finance Act 1996 (“the 1996 Act”).

By ss. 40 and 41:

“40 Charge to tax

(1)

Tax shall be charged on a taxable disposal.

(2)

A disposal is a taxable disposal if-

(a)

it is a disposal of material as waste,

(b)

it is made by way of landfill,

(c)

it is made at a landfill site, and

(d)

it is made on or after 1st October 1996.

(3)

For this purpose a disposal is made at a landfill site if the land on or under which it is made constitutes or falls within land which is a landfill site at the time of the disposal.

41 Liability to tax

(1)

The person liable to pay tax charged on a taxable disposal is the landfill site operator.

2)

The reference here to the landfill site operator is to the person who is at the time of the disposal the operator of the landfill site which constitutes or contains the land on or under which the disposal is made.”

Several of the terms used in those sections are given extended meanings.

By s. 64 (so far as material):

“(1)

A disposal of material is a disposal of it as waste if the person making the disposal does so with the intention of discarding the material.

(2)

The fact that the person making the disposal or any other person could benefit from or make use of the material is irrelevant.”

By s. 65 (so far as material):

“(1)

There is a disposal of material by way of landfill if -

(a)

it is deposited on the surface of land or on a structure set into the surface, or

(b)

it is deposited under the surface of land.

….

(3)

Subsection (1)(b) above applies whether the material -

(a)

is covered with earth after it is deposited, or

(b)

is deposited in a cavity (such as a cavern or mine).”

By s.66 (so far as material):

“Land is a landfill site at a given time if at that time –

(a)

a licence which is a site licence for the purposes of Part II of the Environmental Protection Act 1990 (waste on land) is in force in relation to the land and authorises disposals in or on the land.”

By s. 67 (so far as material):

“The operator of a landfill site at a given time is -

(a)

the person who is at the time concerned the holder of the licence, where section 66 (a) above applies….”

By s. 42 tax is charged on a taxable disposal by reference to its weight at a rate depending on whether what is disposed of is “qualifying material”. By s. 42 (3) qualifying material is material for the time being listed for the purposes of s.42 in an Order. The Landfill Tax (Qualifying Material) Order 1996 (SI 1996/1528) lists various types of inert waste, including naturally occurring rocks and soils, ceramic or concrete materials, unused minerals, furnace slags and ash. But it does not include excavated road metal.

There are various exemptions from landfill tax. Two exemptions introduced in 1999 were for site restoration and quarries.

By s. 43C:

“Site restoration

(1)

A disposal is not a taxable disposal for the purposes of this Part if - 

(a)

the disposal is of material all of which is treated for the purposes of section 42 above as qualifying material,

(b) before the disposal the operator of the landfill site notifies the Commissioners in writing that he is commencing the restoration of all or a part of the site and provides such other written information as the Commissioners may require generally or in the particular case, and

(c)

the material is deposited on and used in the restoration of the site or part specified in the notification under paragraph (b) above.

(2)

In this section "restoration" means work, other than capping waste, which is required by a relevant instrument to be carried out to restore a landfill site to use on completion of waste disposal operations.

(3)

The following are relevant instruments - 

(a)

a planning consent;

(b)

a waste management licence;

(c)

resolution authorising the disposal of waste on or in land.”

By s. 44A (so far as material):

“Quarries

(1)

A disposal is not a taxable disposal for the purposes of this Part if it is - 

(a)

of material all of which is treated for the purposes of section 42 above as qualifying material,

(b) made at a qualifying landfill site, and

(c) made, or treated as made, on or after 1st October 1999.

(2)

A landfill site is a qualifying landfill site for the purposes of this section if at the time of the disposal - 

(a)

the landfill site is or was a quarry,

(b) subject to subsection (3) below, it is a requirement of planning consent in respect of the land in which the quarry or former quarry is situated that it be wholly or partially refilled, and

(c) subject to subsection (4) below, the licence or, as the case may require, resolution authorising disposals on or in the land comprising the site permits only the disposal of material which comprises qualifying material.”

The only other provision of the 1996 Act to which I need refer is in s. 62, which allows the making of regulations to make provision in relation to a taxable disposal. By s. 62(7) (so far as material):

“The regulations may only provide that a disposal is to be treated as not being a taxable disposal if or to the extent that –

(a)

the material comprised in the disposal is held temporarily pending one or more of the following –

(i)

….

(ii)

….

(iii)

the use of the material, if it is qualifying material within the meaning of section 42(3) above, for the restoration to use of the site at which the disposal takes place, or any part of that site, upon completion of waste disposal operations at the site, or as the case may be, that part of the site, or

(iv)

…. and

(b)

the material in question is held temporarily in an area designated for the purpose by an authorised person.”

The parties are in agreement that we can ascertain the mischief which the 1999 amendments were designed to meet from the Report made in March 1998 by the Commissioners on a review of the operation and level of the landfill tax. In their executive summary the Commissioners said:

“The single most commonly raised issue was that of the tax treatment of inert wastes used for constructing, operating and restoring landfill sites. We accept that the tax has contributed to a shortfall in the availability of suitable material, and that this has caused a problem in particular for the restoration of landfill sites, including the filling of mineral workings with inert waste.

We therefore recommend that inert wastes used to restore sites and to fill old and existing mineral workings should be exempted from landfill tax.”

That was expanded on in the Report. In a section headed “Impact of Landfill tax on disposal of inert waste” the Commissioners reported that the vast majority of respondents to the review claimed that the tax was responsible for significant shortfalls in the availability of inert materials, mainly construction wastes, for disposal at landfill sites. The Commissioners recognised that there were arguments both of environmental policy and of equity for reconsidering the current treatment of waste used in landfill sites and acknowledged that landfill sites could have problems in meeting licence requirements, particularly regarding restoration which could be delayed and its quality affected. In their conclusion the Commissioners accepted that there had been a reduction in the amount of inert materials suitable for engineering, operation and restoration being received at licensed landfill sites, and that there had been an impact on the restoration of inert sites, particularly mineral workings and mixed sites where disposal activities had ceased. It referred to suggestions that all clean soils and/or clays, which are not regarded as waste but are always used by landfill operators, should be exempt from tax or that all inert materials should be exempt, but rejected those suggestions as diluting the environmental message of the tax that the landfilling of inert waste has an environmental cost. They continued:

“We prefer to consider an exemption based on the use to which material is put rather than the nature of the material. The extent to which material qualifies would be determined by reference to the site licence requirements. Disposals beyond this limit would not be encouraged, thus the exemption should not be a disincentive to the recycling of inert waste. This option could reduce the impact of the tax on, amongst others, sites at the restoration stage, sites with heavy restoration requirements, and inert only sites. The extent to which the impact on inert only sites is affected would depend on the scope of the exemption. Only if the definition includes all inert disposals at a former quarry would the impact on quarry operators be significantly reduced.”

The Commissioners then considered the advantage of limiting the exemption to restoration and recommended that inert wastes used to restore sites and to fill old and existing mineral workings should be exempted from landfill tax and that in order to effectively ring fence the exemption and exclude waste used in site engineering or daily cover, it should be introduced from October 1999.

Ebbcliff carries on business as a landfill site and land reclamation operator. It owns the land the subject of these proceedings, a former quarry on a site of about 94 acres known as Mardyke Farm, South Hornchurch, Essex (“the Site”). From 1947 to the late 1950s digging for sand and gravel took place at the Site pursuant to planning consents. Two planning consents in the 1950s contained conditions as to the filling of the excavations on the Site and the covering of the area with topsoil. By 1969 part of the Site had been filled with builders’ materials, but unlicensed waste disposal operations were also carried out and the excavations were filled with a wide range of materials, some being toxic waste. The Greater London Council prior to 1986 considered that the Site had been restored to a poor standard. In 1988 a report was commissioned to assess the suitability of the Site for residential development and public open space. The report which was produced stated that substantial remedial work was necessary and recommended the reopening of the Site for the deposit of inert materials so that the ground surface could be adequately covered.

Dayfield Properties Ltd. (“Dayfield”) applied for planning consent for the landscaping and re-contouring of the Site. The application was refused by the local planning authority, Havering Borough Council (“Havering”), but on appeal an Inspector appointed by the Secretary of State for the Environment allowed the appeal after a local inquiry.

The Inspector in his letter dated 17 January 1995 giving consent (“the 1995 Consent”) said that he was treating the case as an application for landfill waste disposal including re-contouring, restoration and aftercare of the land. He granted planning permission subject to a number of conditions. They included the submission to and approval by the local planning authority of a scheme of landscaping and restoration, the scheme to include details of the proposals for the progressive re-contouring and restoration of the site (condition 9), the submission to and approval by the local planning authority of a detailed phasing programme giving details to show how the progressive restoration of the Site was to be achieved (condition 11), the limiting of the materials permitted to be deposited to those included in Category A waste as defined by the London Waste Regulation Authority, such waste being wider than qualifying material under the 1996 Act and including, for example, excavated road metal (condition 14), the covering of the re-contoured layer with a clay cap at least one metre thick (condition 15) and a final layer of covering material to be at least 0.6m depth of topsoil or other satisfactory materials and to be increased to at least 1.5m depth in areas to be planted with trees and shrubs, the topsoil to be graded to form the approved final contours (condition 16).

A scheme of landscaping and restoration and a phasing plan were in due course submitted and approved by Havering. The scheme required 364,500 cubic metres of clay for the cap and 520,000 cubic metres of inert waste material for the re-contouring. The phasing plan is for 14 phases, one for each of the 14 parts into which the Site was divided. The waste to be placed below the capping layer is inert waste such as subsoils, brickwork, concrete, stone, clay and sand.

Dayfield applied to the Environment for a Waste Disposal Licence (“the Licence”). It submitted a Working Plan which was in substance approved and made part of the Licence. The Working Plan summarised the proposals in this way:

“2.5.2.2.6 The proposals provide for the satisfactory restoration and landscaping of the area over a four to five year period by recontouring the site on a phased basis with Class A waste material which would be capped with a 1 metre thick clay sealing layer and then covered with a soil restoration layer. The total quantity of materials required to complete the development will be about 1.25 million [cubic metres]. The proposed phased development is shown in Appendix 3. Measures would be taken to prevent landfill gas migration off site by the construction of a venting trench around the perimeter of the site. A comprehensive monitoring scheme requiring the installation of permanent monitoring boreholes has also been proposed. The land would be progressively landscaped following restoration on a phased basis as will be described by Liz Lake, landscape Architect.”

2.5.2.2.7 The proposals provide for approximately 520,000 cu m of Class A waste materials to be deposited at the site which is the minimum necessary to finance the engineered clay capping layer, soil restoration layer, landscaping, aftercare scheme and environmental monitoring programme.”

The Licence was issued on 25 September 1996. It provides for the progressive filling of the Site in sequence (para. 4.10). It also provided that on completion of the deposition of waste, to the levels specified in the Working Plan, the Site should be capped with clay, the cap to be installed in accordance with the Working Plan (para. 6.3).

In November 1996 Ebbcliff acquired the freehold interest in the Site and commenced work at the Site in February 1997. It is paid by those who wish to dispose of materials at the Site.

On 8 September 1997 Ebbcliff gave written verification to the Commissioners of its intention to commence restoration. It claimed full exemption for the amount of waste to be deposited under the scheme. Mr. Shelvey, on behalf of the Commissioners, asked for more information from Ebbcliff. On 24 September Ebbcliff wrote to Mr. Shelvey claiming that the disposal of waste at the Site qualified for exemption either under s. 43C as restoration or under s. 44A as the refilling of a quarry.

On 29 November 1999 Mr. Shelvey replied refusing the claim for exemption for reasons which he explained. On 6 January 2000 Ebbcliff requested a review of that decision. After an exchange of correspondence Mr. Shelvey wrote on 18 April 2000 adhering to his earlier decision. Again Ebbcliff requested a review of that decision. On 3 August 2001 the Commissioners confirmed Mr. Shelvey’s decision.

Ebbcliff appealed against the Commissioners’ review decision to the Tribunal. In a decision, which the judge rightly described as full, detailed and careful, the Tribunal considered four issues. The first was whether the deposit of qualifying material underneath the capping material was “work …. required by a relevant instrument to be carried out to restore the site to use on completion of waste disposal operations” within the meaning of s. 43C(2). The Tribunal concluded that it was. The second was whether there was a planning consent which had a requirement that the quarry be wholly or partially refilled within the meaning of s. 44A(2)(b). It held that there was not. The third and fourth issues related to the quarry exemption and I need not take up time on them. The Tribunal accordingly allowed Ebbcliff ’s appeal so far as it related to the restoration exemption.

The Commissioners appealed against the Tribunal’s decision that the deposit on the Site of material below the capping layer constituted “restoration” within s. 43C(1)(c) and (2). Ebbcliff cross-appealed against the Tribunal’s decision on the second issue before the Tribunal. The Commissioners then amended their Notice of Appeal to take another point on the inapplicability of the quarry exemption, but as the judge upheld the Tribunal’s decision on the second issue and Ebbcliff does not seek to appeal that aspect of his decision, it is unnecessary to go into that.

The appeal came before the judge. He referred to the Tribunal’s decision on the first issue which he analysed in this way in para. 55:

“The Site was filled before 1970, but was then only restored to a poor standard. The work which has been and is continuing to be undertaken by Ebbcliff is not disposal for the sake of disposal, but merely continued restoration of the Site to modern standards. All that work is required by the 1995 Consent and the Licence. Accordingly all the work, including the deposit of qualifying material underneath the capping layer, is “restoration” within s.43C(1)(c) and (2).”

The judge gave his view on that, and on a further point taken by Mr. Shadarevian, appearing before the judge as he does in this court for Ebbcliff , in this way:

“56.

In my judgment, the Tribunal’s analysis is not compatible with the proper meaning and effect of FA 1996 s. 43C(2). Indeed, this was conceded by Mr. Shadarevian in the course of the appeal. Ebbcliff’s case, however, is that, had the Tribunal applied s.43C(2) correctly, the Tribunal would have come to the same conclusion, and so the appeal should be dismissed.

57.

The Tribunal was wrong, and Mr. Shadarevian so concedes, in associating, for the purposes of s. 43C, the “restoration” of the Site with “the completion of waste disposal operations” before 1970, including the filling of the Site.

58.

A landfill site within s.43C must be a licensed landfill site, that is to say a site in respect of which there is in force at the relevant time a permit or one of the licences or resolutions specified in FA 1996 s. 66.

59.

In my judgment, giving the words in s.43C(2) their natural and ordinary meaning, the sub-section is directed at work to land, which, prior to the commencement of that work, has received disposals of waste as an operational licensed landfill site, and has not changed its use since then, and which work is carried out to restore the land to use for a purpose other than for the disposal of waste by way of landfill.”

The judge found support for his approach in the decision of the Tribunal (Mr. R K Miller CB and Mr. M M Silbert FRICS) in Harley v Commissioners of Customs and Excise, 7 December 2001, and said that that Tribunal had properly interpreted the word “restoration” in s. 43C(2) as the process by which the condition of land, which has been altered by the disposal of qualifying material by way of landfill of the land while it is a licensed landfill site, is restored. He continued:

“63.

…. It constitutes that final part of waste disposal operations which is required by a relevant instrument to be carried out to restore the site to a use other than disposal of waste by way of landfill.

64.

This straightforward approach to the proper meaning of s.43C(2) is consistent with the evidence before the Tribunal that the conventional practice is for the disposal of putrescible waste at a landfill site to proceed, broadly speaking, in three phases: the filling of the site, the construction of the cap, and, finally, the work of restoration.”

The judge then referred to the evidence, and said that the 1995 Consent, the phasing plan, the Working Plan and the Licence were similarly consistent with the division of the work to be carried out as including a distinct restoration phase. He also referred to the same view expressed by the Tribunal in para. 77 of its decision, and said that it followed that if s. 43C(2) was given its natural and ordinary meaning, the Tribunal was incorrect to conclude that all the work required by the 1995 Consent and the Licence, including the deposit of qualifying material underneath the capping layer, was “restoration” within s. 43C(1)(c). He found reinforcement for that conclusion from the words “on completion of” in s. 43C(2), supporting the notion of a continuing process from operational use for landfill, to remedial work, to restoration of use. He also considered that the Parliamentary draftsman’s assumption of “a continuum of activity” from landfill to remedial work and then restoration of use on the same licensed site was supported by the language of s. 62(7)(a)(iii).

The judge criticised the Tribunal’s view in para. 80 of its decision that all the work was done “after completion of the waste disposal operations which finished before 1970”. He pointed out that all these operations were carried out and completed many years before the Site was a licensed landfill site and was then restored in accordance with the planning consent at the time, so that there was no temporal continuum between the conclusion of those activities and the work carried out by Ebbcliff .

The judge agreed with Mr. Shadarevian that s. 43C(2) is directed at the restoration of a site once all the waste disposal operations are completed including the restoration work itself, and said that there was no reason to give “waste disposal operations” in the subsection an artificial meaning which excluded the disposal of waste involved in the work of restoration itself. However he rejected Mr. Shadarevian’s submission that all the work that Ebbcliff had carried out on the Site had been “restoration” within s. 43C. He held that, giving s. 43C(2) its natural meaning, it was directed to work to land which, prior to the commencement of that work, had received disposals of waste as an operational licensed landfill site and which work is required to restore the land for use for a purpose other than for the disposal of waste by way of landfill. The judge also agreed with the submission of the Commissioners that if s. 43C was intended to exempt all disposals of waste for filling a quarry, s. 44A would have no purpose.

The judge accordingly allowed the Commissioners’ appeal on s. 43C and, as I have indicated, found the exemption in s. 44A inapplicable.

Before us Mr. Shadarevian’s submission is essentially very straightforward: s. 43C on its natural construction requires the exemption to be given to all disposals of qualifying material, other than the disposal of capping waste, which are deposited on and used in the restoration of the landfill site, whether or not the deposits are underneath or above the cap. He submits that the judge has put a gloss on the statutory language which can only have been derived impermissibly from extra-Parliamentary material. Further he says that his construction accords with the purpose of the enactment of ss. 43C and 44A, viz. to alleviate the mischief of the shortage of inert waste available for the restoration of landfill sites and quarries. He points out that s. 43C may apply to landfill sites where no cap is required at all because it is not a putrescible site (i.e. no putrescible waste has been deposited on the site), and that if Parliament had intended to exclude from the exemption not only capping waste but also other qualifying waste deposited underneath the cap, it would have been easy to say so.

I see much force in those submissions, but I am persuaded by Mr. Owain Thomas, appearing before us for the Commissioners as he did before the judge, that the judge’s construction is to be preferred.

S. 43C is a section of general application applying to a landfill site in respect of which there is an extant licence and pursuant to that licence there are ongoing operations. It recognises that there is a stage in those operations when “restoration” is commenced (s. 43C(1)(b)) and exemption is conferred on particular waste disposals by reference to the purpose of the use of the deposited material the subject of the disposals, viz. that the material is deposited on and used in the restoration of the site. The term “restoration” is defined as work of a particular kind, viz. work (other than capping waste) which is required by a relevant instrument to be carried out to restore a landfill site to use on completion of waste disposal operations. Thus, although restoration is defined, it uses as part of that definition the verb “restore”, which, as the Tribunal in Harley pointed out, connotes bringing something back to a previous, original or normal condition or something like that. The work must be required by a relevant instrument to be carried out to restore the landfill site to use when the waste operations are completed.

In the present case Ebbcliff can point to the requirements of the 1995 Consent and the Licence (which for the purposes of the 1996 Act is a waste management licence) as requiring work in the form of the deposit of qualifying material to be carried out as one part of an operation which was designed to restore the Site to use. But the question raised by the 1996 Act is whether that work, which was to be followed by capping and then the deposit of topsoil, was what Parliament intended to be comprehended within the s. 43C exemption.

I have already noted in paras. 20 and 21 above the huge quantity of material to be deposited at the Site in the re-contouring phase. That was needed not only to cover what had previously been deposited on the Site and inadequately restored but, as was said in para. 2.5.2.2.7 of the Working Plan, that was the minimum necessary to finance the capping, the topsoil deposit, the landscaping, the aftercare scheme and the environmental monitoring programme. The scale of the intended deposits for the recontouring phase created the requirement for a landfill site licence. It would be surprising if that waste disposal, the intention to make which brought the landfill site into existence, was also restoration, for the purposes of s. 43C, of the Site.

The section is drafted in language which presupposes a knowledge of the ordinary terms in use in the business of operating landfill sites. Thus s. 43C (2) refers to “capping waste”, without defining what that means. The draftsman assumes that “capping” is a term that will be understood. As the judge explains in para. 64 of his judgment, on the evidence before the Tribunal the conventional practice is for the disposal of putrescible waste at a landfill site to proceed in three phases: the filling of the Site, the cap and restoration work. Although the judge referred only to the disposal of putrescible waste, in a case such as the present where there is an inadequately restored site, the same three clearly separated stages can be identified in the documents.

Thus, Carolyn Barnes of the Environment Agency, in a letter dated 20 January 2003 to Mr. Shelvey, said:

“The restoration process starts when the site has reached its capacity and is unable to accept any more waste. This is determined by the planning permission issued to the site operator, which gives details for the sites final contours and afteruse of the site once restoration is complete.

The capping system varies between sites but generally consists of an engineered capping layer and restoration layers. The purpose of a capping layer is to cover the emplaced waste material and is the foundation for the restoration material. The capping layer may vary from a suitable soil cover to an engineered system depending on the nature of the waste and the intended afteruse.

Restoration material is considered to be the material that is placed above the capping material. This usually consists of a protective layer above the capping material then a surface layer. The type and quantity of restoration material will depend on the site and the intended afteruse. Waste Management Paper 26B states that the “objective of restoration layers is to enable the planned afteruse of the site to be implemented and therefore to provide a suitable growing and rooting medium for plants as appropriate”.

Please note that the above is general information only and is not site specific.”

In the Environment Agency’s Waste Management Paper 26B, it is said in para. 101:

“The capping system is the final component in the construction of the landform. It comprises the engineering and restoration layers.”

As the judge noted, in para. 72 of its decision the Tribunal recorded the evidence of Mr. Patrick Johnson, a witness for Ebbcliff, that “the scheme did follow conventional practice and provided for the capping system to be immediately below the final restoration layers”.

The planning application statement similarly recognised in several places a sequence of work which proceeded from the deposit of inert waste, to the capping with clay to the deposit of topsoil for the restoration of the Site. So too did Havering’s Chief Executive in a report dated 18 November 1993 to Havering’s Development Control Committee.

In the 1995 Consent, as I have noted, the Inspector treated the case as an application for landfill waste disposal including re-contouring, restoration and aftercare of the land.

The phasing plan, the Working Plan and the Licence are all consistent with the work to be carried out at the Site involving three categories of work of which restoration would be the last.

The Tribunal in para. 77 of its decision said:

“We agree that the supporting planning application statement, the Chief Executive's report, the Inspector's report, the working plan and the waste management licence are all written in language which is consistent with the normal arrangements for a modern conventionally designed landfill site where there are three separate operations, namely the filling of the site by the deposit of waste (usually active waste), the capping layer and the final layer of soils for the purposes of restoration.”

Mr. Shadarevian suggests that other evidence, which led the Tribunal to find that the Site was unique, was ignored by the judge. For example, Mr. Shadarevian referred to a letter dated 4 April 2001 from Mr. Terry Spinks of the Environment Agency to Mr. Shelvey in which Mr. Spinks said of the Working Plan that the activities to be carried out at the Site were the use of inert waste for the restoration of the Site for public use. Mr. Spinks said:

“Obviously this involves the deposit of waste to achieve the desired contours but is not disposal for the sake of disposal.

Therefore the operation of restoration will cease when the agreed contours for the site are achieved.”

However, Mr. Spinks also went on to refer to the installation of the capping layer and the deposit of topsoil and said:

“As detailed in [the Licence] …. the final restoration will begin once the final contours of waste infill are reached.”

I do not see this letter as seriously detracting from the general recognition that the restoration stage commences with the cessation of infilling the Site and the capping.

In my judgment it is proper, when construing a section using an undefined term “capping waste” which would be understood in the industry, to have regard to industry practice and usage, as exemplified by the evidence to which I have referred. Even if the Site is unique, that does not detract from the industry practice and usage, which supports the judge’s conclusion.

Parliament expressly excepted from the exemption in s. 43C capping waste, which otherwise would or might be understood to be included in the restoration of landfill sites. If the exemption was designed to cover all disposals of inert waste made for the purposes of restoring a derelict site to beneficial use, it is hard to see what policy reason there would be for excluding the capping layer from the exemption while including both the waste below and the soil above in the exemption.

There are two further pointers in favour of a construction which excludes from the exemption the filling of the landfill site as well as the capping. First, both in s. 43C (2) and in s. 62 (7)(a)(iii) one finds the words “on completion of waste disposal operations”, which, as the judge said, supported the notion of a continuing progress from operational use for landfill to remedial work to restoration for use. Second, if Mr. Shadarevian were right, s. 43C would overlap with s. 44A. He accepts that there may be such an overlap, each section applying when its different requirements are met. Thus, for s. 44A to apply, the purpose of the work is irrelevant and it is sufficient that the landfill site is a quarry which the planning consent required to be refilled. But it is hard to see why s. 44A was necessary if Mr. Shadarevian’s construction of s. 43C were correct, as the activity of refilling the quarry would be to restore the quarry to use qualifying for relief under s. 43C.

Whilst I do not doubt that to construe s. 43C as Mr. Shadarevian urges would provide an even greater incentive for the provision of inert waste at landfill sites, it cannot be said that the judge’s construction defeats Parliament’s purpose. In the present case some 365,000 cubic metres of material deposited as the final layer are exempt from landfill tax.

Finally, there are two Tribunal decisions which lend some support to the judge’s construction. One is the Harley case, to which I have already referred. In para. 25 the Tribunal said of s. 43C:

“What the section presupposes is a landfill site on which there have been disposals of waste on the completion of which deposits of what would otherwise be taxable disposals of waste are required to bring the site back to its original condition by the terms of the planning consent or a waste management or disposal licence. Here the site was at the beginning agricultural land. Even if one were to take as one’s starting point that land after it had been stripped of its topsoil, in our judgment it just does not make sense of the statutory words to say that all of the tipped material from outside sources is waste deposited, as required, to restore the landfill site (which by definition is the consequence of those operations) to its original use.”

The other is Dispit Ltd. v Commissioners of Customs and Excise, 25 February 2004, in which the Tribunal (Mr. Colin Bishopp) drew a distinction between the deposit of material to fill a landfill site to its useful capacity and the deposit of material thereafter for the purpose of restoration, as required by the planning consent in that case. The Tribunal referred to the present case and said that Etherton J.’s construction of “restoration” in the narrow sense coincided with the Tribunal’s own conclusions.

I have not overlooked, nor did the judge, that s. 43C can apply to landfill sites which do not need a cap because there has been no previous deposit of putrescible waste. I agree with the judge’s view (see para. 10) that in such a case it will be a question of fact to be determined in the light of the evidence the point at which the filling of the site ends and the restoration of the site commences.

For these reasons, despite Mr. Shadarevian’s well sustained arguments, I would dismiss this appeal.

I agree.

I also agree.