IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.6942 of 2006 INDIAN OIL CORPORATION LTD., HAVING ITS REGISTERED OFFICE AT INDIAN OIL BHAWAN, G-9, ALI YAVARJUNG MARG, BANDRA (EAST), MUMBAI-400 051, AND ITS BOTTLING PLANT AT VILLAGE GIDDHA IN THE DISTRICT OF BHOJPUR, BIHAR, THROUGH SHRI PRADEEP KUMAR VERMA, MANAGER (LAW) AND CONSTITUTED ATTORNEY :---PETITIONER. Versus 1. THE BIHAR STATE ELECTRICITY BOARD, VIDYUT BHAWAN, BAILEY ROAD, PATNA, THROUGH ITS CHAIRMAN. 2. THE FINANCIAL CONTROLLER, BIHAR STATE ELECTRICITY BOARD, BAILEY ROAD, PATNA. 3. SUPERINTENDING ENGINEER, BIHAR STATE ELECTRICITY BOARD, HOJPUR ELECTRICAL CIRCLE, ARRAH, DISTRICT- BHOJPUR 4. DEPARTMENT OF INDUSTRIES, GOVERNMENT OF BIHAR, NEW SECRETARIAT, PATNA, THROUGH ITS SECRETARY :--- RESPONDENTS. ----------- For the petitioner : Mr. K.D. Chatterjee, Senior Advocate. M/S Anil Kumar Sinha & Amlesh Kumar Verma, Advocates. For the State : Mr. Ram Das Singh, A.C. to S.C.12 For the Board : M/S Vinay Kirti Singh & Vijay Kumar Verma, Advocates. ====== 3. 08.04.2011. Heard learned counsel for the petitioner- Corporation, State and the counsel for the Bihar State Electricity Board, (hereinafter referred to as the “Board”), who has also filed counter affidavit reiterating the stand taken in the impugned orders dated 16.08.2002, Annexure-13, 19.10.2002, 04.02.2005, Annexure- 18, 07.01.2006, Annexure- 20, whereunder the request of the petitioner for grant of remission from payment of Annual Minimum Guarantee Charges in the light of the 2 resolution of the Board dated 11th October, 1996, Annexure-2 has been rejected holding that the bottling plant of the petitioner at Giddha is not a manufacturing unit and further it has failed to satisfy the authorities of the Board that bottling plant came into production between 01.04.1993- 31.08.2000 by obtaining certificate from the General Manager, District Industries Centre or Managing Director, Industrial Area Development Authority. 2. Learned counsel for the petitioner challenged the aforesaid impugned orders on the ground that the same has been passed ignoring the resolution of the Board dated 11th October, 1996, Annexure-2. For ready reference English translation of the operative portion of the resolution of the Board dated 11th October, 1996 is quoted hereinbelow:- “The Board in its 443rd meeting, vide Resolution No. 6917, has decided to implement the directive issued by the State Government under Section 78A of 3 the Electricity Supply Act, 1948 by Resolution No. 3493 dated 3.9.1996 of the Department of Energy. Accordingly, the following benefits will be given to the consumers: 1. Units which came into production during 1.4.1993 to 31.8.2000 and the defined units undertaking expansion/diversification, whose connected load is upto 500 (five hundred) KVA, are exempted from payment of Minimum Guarantee (Minimum Base Charge) for five years from the date of connection.” 3. With reference to the averments made in Paragraph 6-8 of the writ petition it is submitted by the counsel for the petitioner that bulk supply of liquefied petroleum gas is received in tank trucks and subjected to industrial activity for storage in store vessels and then subjected to further industrial activity for its bottling in small cylinders for marketing. It is further submitted that without bottling the Liquefied Petroleum Gas in cylinders the same is not fit for marketing. In this connection counsel candidly submitted that packaging of Liquefied Petroleum Gas in cylinders is also a 4 manufacturing activity. It is further submitted by learned counsel for the petitioner that packaging of the Liquefied Petroleum Gas for commercial purpose at Giddha Unit of the petitioner commenced between 01.04.1993-31.08.2000 and as the load contracted for such packaging vide agreement dated 30th September, 1999, Annexure-4 is less than 500 K.V.A. the petitioner is entitled for grant of remission from payment of the Annual Minimum Guarantee Charges in the light of the resolution dated 11th October, 1996. In this connection it is specifically submitted that petitioner is required to satisfy the Board that packaging of the Liquefied Petroleum Gas at Giddha Unit of the petitioner commenced between 01.04.1993-31.08.2000 but for such satisfaction certificate from the General Manager, District Industries Centre or the Managing Director of the Industrial Area Development Authority is not required as petitioner is not registered either with the District Industries 5 Centre or the Industrial Area Development Authority. Learned counsel for the petitioner further submitted that the claim of the petitioner for grant of remission was initially rejected by the authorities of the Board under letter dated 16.08.2002, Annexure-13, whereunder it was held that the petitioner-Unit engaged in bottling of the Liquefied Petroleum Gas which is not a manufacturing activity, as such, they are not entitled for grant of remission from paying the A.M.G. charges in terms of the Industrial Policy, 1995. In this connection it is further pointed out that while passing the order contained in letter dated 16.08.2002 the authorities of the Board were not even conscious of the fact that in the light of the Industrial Policy, 1995 the Board has issued resolution dated 11th October, 1996 and any unit claiming relief from the Board under the Industrial Policy, 1995 is required to apply in terms of resolution of the Board dated 11th October, 1996 and for such reason even no 6 reference has been made to the said resolution in the impugned order dated 16.08.2002. As regards the contents of the impugned letter dated 19.10.2002, 04.02.2005, Annexure-18, learned counsel for the petitioner submitted that close perusal of the letter dated 19.10.2002 would indicate that thereunder resolution dated 11th October, 1996 has been referred to in Paragraph-1 of the letter dated 19.10.2002 but ignoring the contents of the said resolution it has been stated in the operative portion of the order dated 19.10.2002 that petitioner has failed to produce certificate of production between 01.04.1993-31.08.2000 from the General Manager, District Industries Centre or Managing Director, Industrial Area Development Authority which is not the requirement of the resolution dated 11th October, 1996. In substance learned counsel for the petitioner submitted that for being granted remission under resolution dated 11th October, 1996 unit has to satisfy the authorities of 7 the Board that the Unit came into production between 01.04.1993-31.08.2000 and that the load contracted for such production is less than 500 K.V.A. and submitted that as petitioner-Unit has come into production between the aforesaid period between 01.04.1993-31.08.2000 and the contracted load is less than 500 K.V.A. it is entitled for grant of remission from payment of Annual Minimum Guarantee Charges in terms of the resolution of the Board dated 11th October, 1996. 3. Counsel for the Board on the other hand supported the impugned order dated 16.08.2002, 19.10.2002, 04.02.2005 and 07.01.2006, Annexures- 13,18, 20 and submitted that bottling of the Liquefied Petroleum Gas is not a manufacturing activity, as such, petitioner is not entitled for any remission. He further contended that petitioner also did not satisfy the authorities of the Board that the commercial activity to bottle Liquefied Petroleum Gas in small cylinders at the Giddha Unit of the 8 petitioner commenced between 01.04.1993- 31.08.2000 by producing certificate from the General Manager, District Industries Centre or Managing Director, Industrial Area Development Authority, as such, he is not entitled for such remission. He further contended with reference to the contents of the High Tension Agreement signed by and between the petitioner and the Board that petitioner has been allowed connection for the purpose of bulk storage and bottling of Liquefied Petroleum Gas in cylinders and the activity of bulk storage and bottling of Liquefied Petroleum Gas in cylinders is not manufacturing activity, as such, he is not entitled for remission. Reliance in this connection is placed on the judgment of Hon’ble Supreme Court in the case of State of Maharashtra Vs. The Central Provinces Manganese Ore Co. Ltd., reported in AIR 1977 SC 879 paragraph-28. 4. Having heard counsel for the parties and having perused the operative portion of the 9 resolution dated 11th October, 1996, Annexure-2, I am satisfied that the Board has resolved to grant remission for a period of five years from the date of connection from payment of Annual Minimum Guarantee Charges to such Units which have come into production during the period between 01.04.1993-31.08.2000, provided the contracted load of the Unit is less than 500 K.V.A. The request of the petitioner for grant of remission under the impugned orders has been refused on the ground that unit is not in production of L.P.G. and that it had failed to furnish certificate of production from the General Manager, District Industries Centre or Managing Director, Industrial Area Development Authority. 5. From perusal of the contents of Paragraphs 6,7,8 of the writ petition it is quite evident that petitioner-Unit is receiving bulk supply of Liquefied Petroleum Gas from elsewhere in tank trucks whereafter the Liquefied Petroleum Gas is 10 stored in storage vessels and thereafter subjected to a further process for filling the same into cylinders through Automated Electronic Filling Machine. Production having not been defined in the resolution dated 11.10.1996 its dictionary meaning has to be considered which means process of producing. In view of the ordinary meaning of the word production there is no difficulty in concluding that manufacturing will also include packaging/bottling of L.P.G. Reliance placed by the counsel for the Board over the judgment in the case of State of Maharastra (supra) is also misplaced as thereunder the oriental mixture produced by the assessee was not a new product having separate commercial name. In the case in hand L.P.G. brought in tank trucks and stored in storage vessel is not a marketable commodity and different from bottled L.P.G. in small cylinders. It is, thus, quite evident that packaging/bottling of the Liquefied Petroleum Gas into small cylinders is a 11 manufacturing activity as without bottling L.P.G. into small cylinders L.P.G. cannot be marketed for use by consumers. Petitioner-Unit is, therefore, entitled for remission provided the commercial production/packaging of Liquefied Petroleum Gas into small sylinder has begun between 01.04.1993- 31.08.2000. The direction of the authorities of the Board to produce the certificate for undertaking commercial packaging of Liquefied Petroleum Gas into small cylinders from the General Manager, District Industries Centre or the Managing Director, Industrial Area Development Authority, in my opinion, is beyond the contents of the resolution dated 11th October, 1996. In view of my findings above, I set aside the impugned order dated 16.08.2002, 19.10.2002, 04.02.2005, 07.01.2006, Annexures- 13,18,20 with direction to the petitioner to satisfy the authorities of the Board by producing material/evidence which is available with them that the Unit commenced commercial bottling/packaging 12 of Liquefied Petroleum Gas into small cylinders at Giddha Unit between the period 01.04.1993- 31.08.2000 and if any such material/evidence is produced by the Unit, the authorities of the Board shall consider their case for grant of remission in the light of the resolution of the Board dated 11th October, 1996. In compliance of this order petitioner should produce the evidence, as early as possible, in any case within one month from the date of receipt/production of a copy of this order and thereafter the Board shall pass appropriate order in the matter within another two weeks. In case remission is allowed to the petitioner, necessary consequential reliefs be granted to the petitioner within another two weeks. 6. The writ application is, accordingly, disposed of. P.K.P. (V.N.Sinha,J.)