Southwestern Portland Cement Company, a Corporation v. United States

This is an appeal from a judgment denying the appellant a refund of corporate income and excess profits taxes levied for the years 1952 through 1956.

In November of 1960, the appellant elected to have the provisions of Section 613(e) (2) and (4) (F) of the Internal Revenue Code of 1954 applied to its taxable years of 1952 through 1956. Section 613(c) (4) (F) provides that the cost of mining in the case of calcium carbonates shall include the cost of treatment processes applied prior to the introduction of the kiln feed into the kiln. This section establishes the “prekiln cut off point” and excludes from mining costs any subsequent process, including the kiln burning process. The appellant, in pressing his claim for a refund, contends that certain manufacturing and marketing expenses were wrongfully denied treatment as mining costs.

FACTUAL BACKGROUND

Appellant is a West Virginia corporation engaged in the business of producing and selling finished Portland cement. During the years in question, it owned three quarries of calcium carbonate rock deposits and operated a cement manufacturing plant within 50 miles of each location.

Appellant, in its integrated operation, extracts…