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Singareni Collieries Co. Ltd. Vs. Collector of Central Excise - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Delhi
Decided On
Reported in(1984)(18)ELT524TriDel
AppellantSingareni Collieries Co. Ltd.
RespondentCollector of Central Excise
Excerpt:
.....in the relevant notification. notification 52/78 exempts electricity generated in an industrial unit, generating station or in establishment including the railways. the limitation is that it should be proved to the satisfaction of the central excise authorities that the electricity produced by a generating station or industrial unit or establishment has been used in such station, unit or establishment, as the case may be. the appellants being an industrial unit, they can seek the benefit of that exemption also.5. notification 105/78 contemplates a concessional rate of duty on electricity generated by generating station. the term generating station has not been defined in the central excise act, so it is relevant to advert to the definition in the electricity act. applying that test it.....
Judgment:
1. These appeals arise out of the Order-in-Appeal passed by the Collector (Appeals) in 208-211/ 82 dated 7-6-82 and Order-in-Original No. 38/83 (Adjn. No. 76/83) dated 31-10-83 passed by the Addl.

Collector of Central Excise, Hyderabad, respectively. M/s. Singareni Collieries Company Ltd. is a Government Company carrying on business of coal mining in Andhra Pradesh. They have three generating stations mainly to supply power to the mines to produce coal at Kothagudem, Belampalli and Ramagundam. The power generated in the three generating stations is mainly used for producing coal in the mines. Electricity has been brought under the purview of the Central Excise Act with effect from 1-3-78 as Tariff Item HE. The appellants have been submitting monthly returns in RT-12 giving particulars of the electricity generated and distributed. According to the appellants they are entitled to certain concession in regard to the quantity of electricity consumed under Notification 105/78 dated 27-4-78. They also claim exemption under Notifications 51/78 and 52/78 both dated 1-3-78.

On 9-2-82 the Supdt. of Central Excise issued a show cause notice stating that the appellants being an industrial unit were not eligible for the exemption under Notification 105/78. He also demanded the differential duty. The amount involved in the respective appeals is as follows :- The appellants sent a reply to the show cause notice and the Assistant Collector passed orders holding that the appellants are not entitled to avail the exemption under Notification 105/78. The Appellate Collector also held in favour of the Department.

2. Shri V.K. Durgaprasad, Controller of Accounts, represented the appellants and stated that the identical question was considered by the Tribunal in Appeal Nos. 2008/83 and connected matters on 18-1-84 and it was held that the appellants were entitled to the benefit of the Notification 105/78-C.E. besides the one allowed by means of Notification 52/78-C.E. In the light of the prior decision he submitted that the appeals may be allowed.

3. Shri K.D. Tayal, the learned SDR, said that the said decision required re-consideration because the appellants cannot claim to be an industrial unit and at the same time seeks the benefit arising under Notification 105/78. Reliance was placed on the intention of the Government when the duty on electricity was sought to be levied. In para 2.2 of the Explanatory Memorandum circulated separately in connection with the Finance Bill for 1978 it is stated as follows :- "It is the intention of the Government to confine the levy to such current as is produced by the various generating stations, both in the Public and Private Sectors, and meant for supply to different classes of consumers." 4. On careful consideration of the contentions, we are of the view that there are no grounds made out to re-consider the earlier decision. In the prior case, the Tribunal has held that the appellants would be entitled to the benefit of Notification 105/78 because they have to be treated as "generating station" in the general sense of the terms as used in the Electricity Act particularly when no special or restrictive meaning has been assigned to this expression in the relevant Notification. Notification 52/78 exempts electricity generated in an industrial unit, generating station or in establishment including the railways. The limitation is that it should be proved to the satisfaction of the Central Excise authorities that the electricity produced by a generating station or industrial unit or establishment has been used in such station, unit or establishment, as the case may be. The appellants being an industrial unit, they can seek the benefit of that exemption also.

5. Notification 105/78 contemplates a concessional rate of duty on electricity generated by generating station. The term generating station has not been defined in the Central Excise Act, so it is relevant to advert to the definition in the Electricity Act. Applying that test it is reasonable to conclude that the appellants would be a generating station. But it must be stated that the exemption under Notification 52/78 is restricted to the use of electricity in the generating station, Notification 105/78 contemplates a different and distinct basis of exemption. This exemption has been granted with a view to compensate the transmission and other losses. Thus while the appellants could claim the benefit of Notification of 52/78 as an industrial unit, they could also claim the benefit of the concession under Notification 105/78. In other words, Notification 52/78 covers cases of captive consumption in an industrial unit while the concessional rate of duty provided under Notification 105/78 envisages partial exemption to all units where electricity is generated. There is nothing in the Rules or the Acts to hold that the appellants should be denied the benefit of a concessional rate of duly because they avail the exemption under a different Notification intended for a different purpose. In 1983-ECR-1021 (Collector of Customs v. BHEL) the Tribunal has held that there is no bar to avail of more than one benefit unless it is barred categorically.

6. The Explanatory Memorandum indicates the intention of the Government when they introduced the Tariff Item. It could not be said that the subsequent Notification 105/78 would apply only to generating stations in the public and private sectors where current is produced for supply to different classes and consumers.

7. Shri Durga Prasad also rightly argued that the concession was accorded to the appellants on former occasions (March 1981) and the show cause notice was issued only subsequently. According to him the mines are situated within 100 kms in different directions and the transmission losses could be resonably expected. The power produced is exclusively used in the mines. We agree with the contention of Shri Durga Prasad and hold that the appellants are entitled to the benefit of Notification 52/78 and also 105/78. Appeals are therefore allowed.


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