Madhya Pradesh High Court
Shivco Lpg Bottling Co. Pvt.Ltd vs M.P.Madhya Kshetra Vidyut Vitaran ... on 26 March, 2018
Bench: Hemant Gupta, Vijay Kumar Shukla
HIGH COURT OF MADHYA PRADESH : JABALPUR
Writ Appeal No.550/2017
Shivko LPC Bottling Co.Pvt.Ltd. And Ors.
-Versus-
M.P.Madhya Kshetra Vidyut Vitran Co.Ltd. & Ors.
CORAM :
Hon'ble Shri Justice Hemant Gupta, Chief Justice.
Hon'ble Shri Justice Vijay Kumar Shukla, Judge.
Shri Madhusudan Agrawal, Attorney holder of the appellant.
JUDGMENT
(26.03.2018) Per: Hemant Gupta, C.J.-
The challenge in the present appeal is to an order passed by learned Single Bench on 07.03.2017 whereby the writ petition challenging the levy of commercial charges for the electricity supply to the unit of the Appellant remained unsuccessful.
2. The appellant is a company registered under the Indian Companies Act and was set up in the year 1994 after obtaining license under the Explosive Act and after obtaining a license to work as factory under the provisions of M.P. Factories Rules, 1962. The appellant is also registered as an Industry with the District Industry Center. The appellant was granted 60 Horse Power Industrial connection. On 24.09.1998, the Executive Engineer vigilance carried inspection of the premises of the appellant when it was found that the appellant is running liquefied petroleum gas bottling plant, therefore, the purpose of the plant is commercial, therefore, commercial tariff should be charged.
3. The demand of Rs. 67,323/- was raised for the period from April, 1996 to August, 1998. The appellant submitted a representation that bottling plant run by the appellant is an Industry, therefore, it does not fall in the category of commercial establishment. The petitioner challenged the difference between commercial and Industrial Tariff by filing the writ petition. The Petitioner amended the writ petition so as to include the challenge of claim of minimum guarantee charges when para 5.8 and 5.9 were inserted.
4. The stand of the Board in the return is that the agreement for supply of electricity was executed for domestic light and fan and commercial purposes. It is mentioned that inadvertently the purpose at the end of agreement was mentioned as Industrial but it was inadvertent mistake. The Executive Engineer while checking the plant of the appellant on 24.09.1998 found that the actual purpose of the factory is commercial as it was for refilling of the gas cylinders. The process is not industrial or manufacturing. In respect of certificate issued by the Chief Commissioner Explosives, it was mentioned that such certificate is for refilling the gas cylinder by compressed gas in the cylinders which does not involve any industrial or manufacturing activity. It is also pointed out that the license to work as a factory does not serve the purpose of industry as factory covers many of the subjects under productive and non-productive process. The relevant extract from the return reads as under:
"The agreement executed under commercial light and fan purpose at the rate of 1.10/ units. The petitioner No.2 has quoted the rate at Rs.2.64 per unit which is not correct. The billing done is correct. Further consumer has submitted the test report for his electric installation shows the purpose of use of electricity as commercial such as 2x10 HP motor used for air compressor and 1 HP used for submercible pump motor. The above load used for different purpose comes under commercial light and fan power none of the motor used for Industrial activities. The compressor and water pump comes under commercial power because it is used for commercial activities. The air compressor also comes under commercial power hence the test report submitted by the petitioner No.2 (Enclosed) is purely for commercial use. The billing done under commercial light and fan is correct."
5. In respect of challenge to the minimum guarantee charges, the stand of the Board in its additional return filed on 29.03.2007 is as under:
5.8. In para 5.8 save and except what appears from Annexure P-17A rest is not admitted. It is incorrect to say that the Board was not in a position to make uninterrupted supply. It is submitted that load shedding and other restrictions curtailing power are imposed due to system requirement. The power even when made available for 17 Hrs, in 3 phase and 16 Hrs in one phase, the total number of units availability is much more than the units required to cover minimum charges with the agreement load of 44 KW (60HP) the units available were (44x9x30x17) in a month 20196 units, whereas the units covered for minimum charges are billed at 2700 units (60 units per KW i.e. 60x44.5 KW).
But the petitioner consumed only 1682 units.
The minimum charges are not based on the actual energy consumed. It is chargeable irrespective of the quantum of energy consumed. Minimum charge is part of tariff and the same is payable."
6. On the basis of such pleadings, the learned Single Bench considered the respective contentions and negated firstly the challenge to the minimum guarantee charges by relying upon Supreme Court Judgment reported as M/s Raymond Ltd. And Another Vs. M.P. Electricity Board and Others- AIR 2001 SC 238. The Supreme Court held that minimum guarantee charges can be claimed when the consumer is to honour its commitment undertaken to give a minimum consumption. There should be essentially a corresponding supply by the Board at least to that extent without which consumption of agreed minimum is rendered impossible by the Board. Since the Board has categorically stated that the total number of units available to the appellant was much more than the units required to cover minimum charges with agreement load of 44 KW(60) HP, therefore, minimum guarantee charges are chargeable in respect of quantum of energy consumed. Learned Single Bench found that in view of the judgment in M/s Raymond Ltd. (supra), the challenge to claim of minimum guarantee charges is not tenable.
7. In respect of the argument that the activity of refilling of the liquefied petroleum gas is not a manufacturing activity but a commercial activity, learned Single Bench relied upon an order passed by the Appellate Tribunal for Electricity constituted under the provisions of Electricity Act, 2003 reported as 2016 ELR (APTEL) 1191 Hindustan Petroleum Corporation Ltd Kochi Vs. Kerala State Electricity Regulatory Commission, Kerala. The Appellate Tribunal examined the question whether the State Electricity Regulatory Commission is justified in categorizing LPG bottling plant of the appellant in the commercial category as against industrial category. The Appellate Tribunal relying upon Supreme Court order in Servo-Med Industries Pvt. Ltd.Vs. Commissioner of Central Excise, Mumbai (2015) 6 137 held as under:
k) In light of the above findings in the judgments of the Hon'ble Supreme Court and considering the process of Appellant's LPG Bottling plant and Terminal where in the process/activity performed by the Appellant, the goods (LPG/Petrol/Kerosene) essentially remain the same, we conclude that the process at Appellant's plant is not to be termed as manufacturing process.
(l) The categorization of consumers depends upon the factors which are relevant to the Electricity Act, 2003 particularly, sub section (3) of Section 62 i.e. consumer load factor, power factor, voltage, total consumption of electricity during any specified period or at time at which supplies are required or the geographical position of any area, the nature of supply and the purpose for which the supply is required. This Tribunal in its earlier judgment dated 04.10.2007 in Appeal No. 116 of 2006 has held that under section 62 (3) of the Electricity Act 2003, it is for the State Commission to decide the category in which a consumer should be placed. Even in its other judgment dated 07.08.2014 in Appeal No. 131 of 2013, this Tribunal has held that the categorization of consumer for the purpose of electricity tariff is under the domain of the State Commission.
(m) In view of the above, we find no infirmity in
the decision of the State Commission in
categorizing the Appellant's LPG bottling/filling plants under the commercial category as against the industrial category.
(n) Hence this issue is decided against the
Appellant."
8. Before this Court, the learned attorney of the appellant refers to the judgment of the Hon'ble Supreme Court in Servo-Med Industries Pvt. Ltd.(supra) and also the order passed by the learned Single Judge of Gujarat High Court in Special Civil Application No.373/2001 (Bharat Petroleum Corporation Ldt. Vs. The State of Gujarat and Ors.) and 6220/2001 (Hindustan Petroleum Corporation Ltd. Vs. The State of Gujarat & Ors) and an order passed by the Income Tax Appellate Tribunal, Mumbai Bench Mumbai in ITA.No.2124/MUM/1999 decided on 31.07.2012 (Hindustan Petroleum Corporation Ltd. Vs. Deputy Commissioner of Income Tax) to contend that the bottling plant is a manufacturing activity.
9. The appellant also relies upon Supreme Court order reported as Vadilal Chemicals Ltd. Vs. State of A.P. and Ors.- (2005) 6 SCC 292 in support of the argument that the appellant is engaged in Industrial and manufacturing activity and not the commercial activity. The appellant also relies upon the definition under the Explosive Act as also the definition of "Manufacturing Activities" in the different statutes to support the argument that the appellant is in fact engaged in the manufacturing activity and not in commercial activities.
10. The appellant also refers to the tariff order 2001-02 issued by M.P Electricity Regulatory Commission in September, 2001 which deals with various tariff category including the industrial consumers. The relevant extract from the tariff control order reads as under:
6 Industrial Applicable to power loom consumers and also Consumers: for light and fan consumption of the room in
(a) Power Loom which power looms are installed.
Consumers upto 25 BHP
(b) Flour Mills Light and Fan and Power upto 15 BHP for flour upto 15 BHP mills, hullers and Flour mills with grinders for grinding masala.
(c) Other Light and fan and power for flour mills and Industries hullers above 15 BHP, power looms above 25 dal mills, besan mills, Cold Storage plants, grinders for grinding masalas (excepts in shops), ice candies, other industrial installations and workshops (where manufacturing takes place i.e. conversion from raw material to finished goods) which are registered with Industries Department as industrial units and also covered under the Factories Act, 1948; ITIs, recognised Small Scale Service Institutes (including their L &F) and workshop and laboratories of Engineering colleges and Polytechincs.
11. We have heard Attorney of the appellate and find no merit in the present appeal.
12. The registration of the Appellant under the Gas Cylinder Rules or the Explosive Act or the Factories Act is to satisfy the specific requirement of each of the said Act or the Rules framed there-under. Each of the Act has a different object to be achieved, and has different requirement for the purposes of manufacturing activity. The definition in one statute cannot be used for interpreting the same expression used in another statute. The purpose and meaning of the expression "manufacturing activities" has to be arrived at in view of the language of statute or the rules framed thereunder and the object of such provision. Meaning assigned to certain words in one statute cannot be imported to define the meaning of the same word in a different statute.
13. The judgment in Servo-Med Industries (supra) deals with the provisions of Central Excise Act, 1944, wherein the question was levy of excise on manufacture of excisable goods. The said judgment is for the purpose of levy of excise duty. The said judgment has been considered by the Appellate Tribunal considering the same question as is raised in the present appeal as to whether the bottling of liquefied petroleum gas form the bulk containers to the marketable small containers is a manufacturing activity. It was held that it is not a manufacturing activity.
14. We find that the reasoning given by the Appellate Tribunal is a plausible meaning and with which we respectfully agree. We find that the reasoning recorded by the learned Single Judge of Gujarat High Court is in respect of the definition of Industrial undertaking given in Section 2 (bb) of Bombay Electricity Duty Act, 1958. The said judgment is not applicable to the facts of the present case as the Bombay Electricity Duty Act, 1958 defines the expression "Industrial Undertaking" and the petitioner unit was found to be in such Industrial Undertaking as per the definition under the Act. But admittedly, the expression "Industrial Undertaking" has not been defined under the Electricity Act. The only definition of Industry available is under the tariff order of 2001 which means that the units where conversion from raw material to finished goods takes place is covered by the expression manufacturing.
15. However, in the present case admittedly, the liquefied petroleum gas is bottled into small containers from the bulk containers, therefore, there is no manufacturing process is undertaken though elaborate bottling activities in undertaking so as to facilitate liquefied petroleum gas under
high pressure from the bulk containers to the small cylinders. Therefore, activity undertaken by the appellant is not a manufacturing activity for the purpose of electricity charges as the definition of such expression has to be found out either from the provisions of agreement prior to the tariff order or in terms of the tariff order. The end product in the cylinders is the same as in the bulk containers. There is no change in any of the properties of the product. Therefore, it cannot be said that the Appellant is engaged in the manufacturing activity.
16. The order passed by the Income Tax Appellate Tribunal in ITA.No.2124/MUM/1999 decided on 31.07.2012 (Hindustan Petroleum Corporation Ltd. Vs. Deputy Commissioner of Income Tax) is again dealing with the Section 80 (IA) or Section 80 HH of Income Tax Act, 1961. The definition of manufacturing activity under the Income Tax Act or for considering that when the new industrial units comes in to existence as considered by the Hon'ble Supreme Court in Vadilal Chemicals Ltd. (supra) would not be helpful to examine the expression manufacturing activities for the purpose of levy of electricity duty.
17. Thus, We do not find any merit in the present appeal. Accordingly, the same is dismissed.
(Hemant Gupta) (Vijay Kumar Shukla)
Chief Justice Judge
anu
Digitally signed by
ANUPRIYA SHARMA
Date: 2018.04.03 10:34:45
+05'30'