Customs and Excise v Ebbcliff Ltd.

Section 43C of the Finance Act 1996 exempts qualifying material used in restoring a licensed landfill site, but the exemption begins only after waste-disposal or infilling operations have ended. Material used to fill or re-contour the site before capping is not restoration merely because planning consent or a waste-management licence requires it as part of an overall scheme. The statutory reference to restoring the site to use, the exclusion of capping waste, ordinary landfill-industry usage and the separate quarry exemption support this distinction. Restoration ordinarily follows three stages: filling, capping and final restoration. At sites where no cap is required, the point at which filling ends and restoration begins is a question of fact.

Ebbcliff operated a former quarry subject to planning consent and a waste-management licence. The approved scheme required inert material to be deposited for re-contouring below a clay cap, followed by topsoil and landscaping. Ebbcliff claimed that these disposals qualified for the site-restoration exemption in section 43C of the Finance Act 1996. The Commissioners refused the claim.

The VAT and Duties Tribunal allowed Ebbcliff’s appeal on the restoration issue but rejected its alternative quarry-exemption case. Etherton J allowed the Commissioners’ appeal and adopted a narrower construction of restoration. Ebbcliff appealed to the Court of Appeal. The central issue was whether qualifying material deposited below the capping layer, as part of the re-contouring operation, was used in restoration for the purposes of section 43C.

Appeal dismissed. Peter Gibson LJ delivered the judgment, with Jonathan Parker LJ and Laddie J agreeing.

1. Meaning of restoration. Section 43C applies to an extant licensed landfill site and recognises a distinct stage at which restoration begins. Restoration under section 43C(2) means work, other than capping waste, required by a relevant instrument to restore the site to use on completion of waste-disposal operations. The relevant use is a use other than disposal of waste by landfill.
2. Infilling and re-contouring excluded. Qualifying material deposited below the cap was not exempt. Although the planning consent and licence required the material as part of the overall scheme, the evidence showed the ordinary sequence of filling or re-contouring, capping and final restoration. The large-scale re-contouring operation was waste disposal which brought the operational landfill site into existence or filled it to the required level. It was not the later restoration phase.
3. Industry usage and statutory context. The undefined expression capping waste could properly be construed by reference to landfill-industry practice. The documents and evidence consistently identified filling, capping and restoration as separate operations. The reference in section 62(7)(a)(iii) to restoration on completion of waste-disposal operations supported the same temporal sequence. The separate quarry exemption in section 44A was an additional pointer against construing section 43C to cover all quarry refilling.
4. Sites without capping. Where no cap is required, the point at which filling ends and restoration begins is a question of fact determined from the evidence.

The High Court’s construction was upheld, and Ebbcliff’s appeal was dismissed.

• Court of Appeal (Civil Division): dismissed Ebbcliff’s appeal and upheld the High Court’s construction of section 43C.
• High Court, Chancery Division: Etherton J, by order dated 19 December 2003, allowed the Commissioners’ appeal from the Tribunal on the restoration exemption and held that material deposited below the capping layer was not restoration.
• VAT and Duties Tribunal: by decision dated 4 April 2003, allowed Ebbcliff’s appeal on the restoration exemption but rejected its alternative quarry-exemption case.