Case: Essar Steel India Ltd.  Vs. State Of Gujarat

the capacity available and the dispatch instructions were to be issued on the basis of the said declaration. It could not thus be said that EPL had no obligation to declare the capacity and the obligation of GUVNL to issue dispatch instructions was not dependent on declaration of the available capacity by EPL. Contrary view of the Tribunal is clearly erroneous. In para 45 and 46 and elsewhere in its judgment, the Tribunal erred in holding that there was no obligation to declare available capacity on proportionate basis. The finding of the Commission in paras 9.5 to 9.12 of its order quoted above is the correct interpretation of the agreement. We hold accordingly." 29. In the above case the question of exemption in excise duty within meaning of Section 3(2) of 1958 Act had not arisen nor the question was considered whether EPL can be held to be generating energy jointly with appellant no.1 and Gujarat Electricity Board. For the issues which have arisen in the present case, the above judgment does not render any help.30. Learned Counsel for the appellant has submitted that the High Court had rejected the claim of payment only on the ground that there is no such Memorandum of Understanding between EPL and ECL as was found in A.P. Gas Power Limited (Supra). The High Court although has noted the fact that in the present case there is no such Memorandum of Understanding between EPL and ECL but the judgment of the High Court is not based only on the above premise rather High Court has clearly found that conditions stipulating under Section 3(2)(vii)(a)(i) of 1958 Act are not satisfied, hence, appellant no.1 is not entitled for exemption. High Court has elaborately considered all the submission raised by the appellant and rightly came to the conclusion that conditions as enumerated in Section 3(2)(vii) (a) are not fulfilled. We do not find any error in the aforesaid finding of the High Court. Claim under notification dated 27.02.1992 31. The notification dated 27.02.1992 was issued in exercise of power conferred by Section 3(3) of Bombay Electricity Act, 1958. The relevant part of the notification dated 27.02.1992, is as follows:- "NOTIFICATIONSachivalaya Gandhinagar27th February, 1992BOMBAY ELECTRICITY DUTY ACT, 1958No. GHC/92/10/JCP/1188/2594/KIn exercise of the powers conferred by Sub Section (3) of the Section 3 of the Bombay Electricity Duty Act,1958(Bom. XL of 1958), the Government of Gujarat hereby remitted with effect on and from the date of publication of this notification in the Official Gazette. In the whole of the State of Gujarat, the Electricity Duty payable under item (6) of Part I of Schedule II to the said Act, on the energy consumed for motive power and lighting for Industrial purposes by industrial under takings which generate energy jointly for their own use either by establishing an independent joint company solely for this purpose or on pro-rata cost sharing basis, for a period of ten years from the date of commissioning of the generating sets subject to the following terms and conditions namely:-(a) The generating set or sets shall have been purchased and installed or commissioned during the period beginning from 1st January, 1991 and ending on 31st December, 1992. Providing that such generating act or sets shall not have been previously used in the State.****** ******" 32. The claim raised by the appellant under the above said notification was specifically dealt by the High Court and the Government. The condition which was found lacking for applicability of the notification was that generating sets were not purchased or installed or commissioned during the period from 01.01.1991 to 31.12.1992. The High Court has recorded categorical finding that the generating sets have been commissioned in the month of August 1995. It is useful to refer to paragraph 12.0 of the judgment of Division Bench which is to the following effect:- "12.0. Now, so far as the alternative claim of the appellants to grant the exemption for a period of 10 years under the Notification dated 27.02.1992 is concerned, on considering Notification dated 27.02.1992, it appears that the conditions precedent laid down in the said notification cannot be said to have been compiled by the appellants more particularly appellant No.1 - ESL. For claiming the benefit of notification dated 27.02.1992 it is to be established that the generating set or sets have been purchased/installed or commissioned during the period beginning from 01.01.1991 and ending on 31.12.1992. From the record it appears that the generating sets have been commissioned in the month of August 1995, the appellants have failed to establish that the generating sets were even purchased during the aforesaid period. It cannot be disputed that in a taxing statute more particularly with respect to the exemption from payment of duty, all the conditions which can be said to be statutory are required to be fulfilled and unless and until all the conditions stipulated in the exemption notification are satisfied and/or compiled with, there shall not be any exemption under the notification. In the present case, admittedly, the generating sets in question have been commissioned in the month of August 1995. The appellants have failed to establish that they even purchased the generating sets during the period beginning from 01.01.1991 to 31.12.1992. More placement of order for purchase cannot amount to actual purchase of the generating sets." 33. Another reason given by the High Court was that no application was made within 180 days of application of the notification dated 27.02.1992 or even from the date of installation of generating sets i.e. August 1995. Even if the second reason given by the High Court is ignored, nonfulfillment of condition no.(a) of notification dated 27.02.1992 clearly entailed rejection of claim under notification dated 27.02.1992. There is no foundation or basis laid down even in this appeal to assail the finding recorded by the High Court that generating set was not purchased from 01.01.1991 to 31.12.1992.34. We thus do not find any error in rejection of claim of appellant under the notification dated 27.02.1992.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]12. From the facts which have come on the record it is clear that appellant no.1 had claimed exemption from duty under the provisions of Section 3(2)(vii) as well as under the notification issued under Section 3(3) of 1958 Act for different period which exemption was earlier granted. Details of benefit of exemption availed by appellant no.1 has been extracted by Division Bench of High Court in Para 5.4 of the judgment.13. In the present case, no application in the prescribed form as per Rule 11 of the Rules was filed by the appellant no.1 and for the first time the appellant had come up with an application dated 15.03.2001 seeking an exemption under notification dated 27.02.1992 and subsequently on 12.04.2001 has again claimed exemption under Section 3(2)(vii)(a) (i) of 1958 Act. The exemption from payment of duty as claimed by the appellant is in two parts. Firstly, under Section 3(2)(vii)(a)(i) of 1958 Act and secondly, under the notification dated 27.02.1992.In the present case, there is no dispute to the fact that appellant No.2 was created as a Special Purpose Vehicle by appellant No.1 itself. Had appellant No.2 would have been supplying energy to appellant No.1 only, the claim deserved consideration. But present is a case where the appellant no.2 is supplying energy to industrial undertakings with whom it is not jointly generating the energy. Judgment of this Court in State of U.P. and Renusagar Company, thus, has no application in the facts of present case.The judgment of Andhra Pradesh Gas Power Corporation Limited is clearly distinguishable and does not help the appellant in present case. In the aforesaid case the energy was utilized by the participating industries and the concerned holding shares of A.P.GPCL but supply of energy to the sister concerned was required to have license. Present is a case where Gujarat Electricity Board who has been allocated 300 MW is not a participating industry nor appellant no.2 is jointly generating the energy with Gujarat Electricity Board, even if it is held that the appellant no.1 to the extent it holds 42% equity shares of appellant no.2 is jointly generating the energy. The Gujarat Electricity Board which has been allocated 58% of electricity generated can not be said as the industrial undertaking jointly generating the energy.In the above case the question of exemption in excise duty within meaning of Section 3(2) of 1958 Act had not arisen nor the question was considered whether EPL can be held to be generating energy jointly with appellant no.1 and Gujarat Electricity Board. For the issues which have arisen in the present case, the above judgment does not render any help.30.Learned Counsel for the appellant has submitted that the High Court had rejected the claim of payment only on the ground that there is no such Memorandum of Understanding between EPL and ECL as was found in A.P. Gas Power Limited (Supra). The High Court although has noted the fact that in the present case there is no such Memorandum of Understanding between EPL and ECL but the judgment of the High Court is not based only on the above premise rather High Court has clearly found that conditions stipulating under Section 3(2)(vii)(a)(i) of 1958 Act are not satisfied, hence, appellant no.1 is not entitled for exemption.High Court has elaborately considered all the submission raised by the appellant and rightly came to the conclusion that conditions as enumerated in Section 3(2)(vii) (a) are not fulfilled. We do not find any error in the aforesaid finding of the High Court.Another reason given by the High Court was that no application was made within 180 days of application of the notification dated 27.02.1992 or even from the date of installation of generating sets i.e. August 1995. Even if the second reason given by the High Court is ignored, nonfulfillment of condition no.(a) of notification dated 27.02.1992 clearly entailed rejection of claim under notification dated 27.02.1992. There is no foundation or basis laid down even in this appeal to assail the finding recorded by the High Court that generating set was not purchased from 01.01.1991 to 31.12.1992.34. We thus do not find any error in rejection of claim of appellant under the notification dated 27.02.1992.