(dissenting).
The district court held that the movements of crude petroleum from wharves to the appellee’s refinery and movements of ■refined petroleum from the refinery to the wharves are exempt from the federal transportation tax as movements within the premises of a refinery. The reason given in the majority opinion for affirming the judgment is that “The appellant has not ■convinced us that on the facts of this case the conclusion of the district court should be set aside as clearly wrong.”
The court below decided as a matter of law that the definition of the word “premises” in the exemption from the taxing statute was dependent upon Texas law; that under Texas law the easements in question were part of appellee’s refinery premises; that those premises extended to and onto the docks and that “Under Section 3460(c), therefore, the movements of oil over these easements appurtenant are within the premises of the refinery and *165exempt from taxation.”1 (Emphasis supplied). 98 F.Supp. 921, 940-941.
The majority opinion holds that whether the easement controlled lands through which the pipe lines ran were part of the refinery premises was a question of fact. The opinion then implies that the fact question was decided by the district judge. On this the opinion reads: “ * * * all combine to make reasonable a conclusion of the fact finder which identifies it [the easement] with the premises of the refinery.” But the conclusion of the fact finder was the above conclusion of law. He never did find as a fact that the easement land was within the refinery premises. With “loading” out of the case2 the judgment below rests solely on the above quoted conclusion of law. That conclusion is wrong. The pertinent federal statute, Section 3460 of the Internal Revenue Code3 neither requires resort to state law nor gives the slightest reason expressly or impliedly for so doing. Under those circumstances the federal tax question presented by this appeal is a matter of federal law. It is definitely not subj ect to whatever the law of Texas may be as to the nature of easements.4
The “blending” referred to in the majority opinion is the physical mixing of two or more kinds of crude petroleum or of refined petroleum products. This can be accomplished -by pumping the products from tank to tank; during transportation by pipe line and in loading tankers by pouring the desired products into the same compartment and permitting the motion of the vessel to take care of the necessary mixing. The district court held that blending was a distinct and inherent step in the refining process. Such blending, as decided by the district court, did not take place in the pipe lines more than 20% of the time the incoming crude oil • and the outgoing refined products were present in the lines. It follows that, on the district court’s own finding, during four-fifths of the time the oil and oil products were in the pipe lines there was no blending whatsoever. The court also found that it was impossible to determine when the blending starts in the pipe lines and when it ends, and the court went no further than to say that 1500 feet, the distance from the docks to appellee’s nearest tanks, was “ * * * long enough to allow the blending to take place.” On those findings, which were based on appellee’s contention, the blending process had been completed and transportation of the blended product begun while its movement continued in the pipe line. And I think it plain that the mixing or blending in the pipe lines for the 20% of the time as found by the district court was, with reference to the incoming crude oil, a collateral result obtained during the transportation of such oil from the ships across the leased territory in the pipe lines to the refinery. As to the petroleum products en route to tankers at the wharves, *166the blending was an incident in the operation of moving those products to market. Even if the pipes were used for blending throughout their full length and during the entire time the oil and its .products were in them, as said in McKeever v. Fontenot, 5 Cir., 104 F.2d 326, 329, certio-rari denied 308 U.S. 588, 60 S.Ct. 113, 84 L.Ed. 492, “ * * * the tax is laid upon transportation, and, when this function is exercised, the fact that other results are accomplished simultaneously does not defeat the tax.”
Appellee had the burden of proving that its claimed exemption was clearly within the statute. United States v. Stewart, 311 U.S. 60, 71, 61 S.Ct. 102, 85 L.Ed. 40; Helvering v. Northwest Steel Rolling Mills, 311 U.S. 46, 49, 61 S.Ct. 109, 85 L.Ed. 29; Heiner v. Colonial Trust Co., 275 U.S. 232, 235, 48 S.Ct. 65, 72 L.Ed. 256. To be absolved from the tax it had to show that the movement of the crude oil into the refinery from the ships through the pipe lines and the movements of the refined products from the refinery to the dock side tankers were “ * * * movements within the premises of the refinery.” The appellee has failed in that task. The district court judgment should be reversed.
. As to this the district judge said in his opinion, 98 F.Supp. at page 932, “ * * it is my considered judgment that under the law of Texas the said easements are part of the ‘premises.’ ”
. The district court also found that the movement of oil was purely a loading movement not in connection with taxable transportation of oil by pipe line and “ * * * therefore, exempt from tax under Treasury Regulation 42, Sections 130.21 and 130.22.” Since no effort is made to sustain that conclusion in the majority opinion it need not he here discussed at length. It is enough to say that loading under Treasury Regulation 42, Section 130.22 does not include the movement to or from the point where, the loading takes place. Loading is the operation over the “loading wharves” or “loading racks” as detailed in the Reggulation. Cf. Magnolia Petroleum Co. v. United States, 53 F.Supp. 231, 101 Ct.Cl. 1, certiorari denied 323 U.S. 721, 65 S.Ct. 53, 89 L.Ed. 580.
. As amended by the Revenue Act of11941, c. 412, 55 Stat. 687, Sections 502 and 521(a) (22), and by the Revenue Act of 1942, e. 619, 56 Stat. 798, Section 616.
. Burnet v. Harmel, 287 U.S. 103, 110, 53 S.Ct. 74, 77 L.Ed. 199; Lyeth v. Hoey, 305 U.S. 188, 193, 59 S.Ct. 155, 83 L.Ed. 119; Morgan v. Commissioner, 309 U.S. 78, 626, 60 S.Ct. 424, 84 L.Ed. 585, 1035; Koppers Coal & Transportation Co. v. United States, 3 Cir., 107 F.2d 708, 708.