Case: Bharat Coking Coal Ltd.  Vs. Steel Abrasers &amp; Allied Prodcuts

as laid down by ISI, the appellant could legitimately demand handling charges besides the notified price, in terms of Note 14, argued Mr. Salve. To bring home his contention Mr. Salve relied upon the following averments made in the counter-affidavit filed on behalf of the appellant in the High Court : "It is stated that after in direct heating of coal in Beehive Oven (B.H.) and B.P. Plants coke is produced. After manufacture of coke further handling is required for sale of coke. It is stated that Pit Head Haru Coke is an assorted sizes of coke having various size ranges. Coke below 1/2" size of 12 M.M. size constitutes upto 6 to 8 per cent of total Pit Head coke. As per Indian Standard Specification (I.S.) under size tolerance is 10 per cent. Further Indian Standards Specification for Foundry Coke is 4" (-100). This constitute about 80 per cent of the total product.It is stated that loading is not possible at Pit-Head. Therefore shifting, sizing either by manual or by fork-lifting and storing in different loading points is under taken either manually or by vehicles. The colliery owners are spending substantial money to carry out despatch of coke according to specification as improper handing of coke may result in breaking. The operation required before despatch to suit Indian Standard Specification generates substantial rejection. The expenditures incurred in screening, stacking, loading and transportation into despatchable container is termed as handling charges. 10. While dealing with the contentions of Mr. Salve, Mr. Sanyal, appearing for the respondent, did not dispute that as regards coke pit heads as referred to in Note 10(1) would mean coke even plants. He, however, contended that besides the prices as notified, the appellant could claim only transportation charge if the coke was transported beyond a distance of 3 Kms to the loading point under Note 10(2) and the duties and levies referred to in Note 12. According to Mr. Sanyal Mr. Salves reliance on Note 14 to justify the impugned demand was wholly misplaced for the simple reason that neither did the respondent ask for special size of coke nor did the appellant undertake any process for its benefication. In other words, according to Mr. Sanyal, the appellant sold to the respondent coke of `specified size as mentioned in the table and not of special size so as to attract the provision of Note 14. While on this point he referred to the note as appearing in the table to contend that if the appellant had supplied coal of special size in terms of the note it might have laid any claim under Note 14. 11. Having carefully considered the respective contentions of the learned counsel in the light of the material on record we are inclined to accept the contentions of Mr. Salve in preference to those of Mr. Sanyal. From a combined reading of the relevant clauses of the Order and the notes appended to the notification referred to earlier we may draw the following conclusion : (i) The Central Government may, by Gazette Notification, fix the sale price of different grades and sizes of coal and coke and for different collieries, including plants for the production of coke.(ii) The prices so fixed are applicable to sale of coal at pit heads and of coke at coke oven plants.(iii) Prices given in table V of the notification for hard coke shall not apply to small sized hardcoke and other types of cokes as mentioned.(iv) No colliery owner shall sell and no person shall purchase coal or coke at a price which is in excess of the notified price.(v) However, besides the price so fixed, the colliery owner is entitled to realise (a) costs for transportation beyond a distance of 3 Kms to the loading point at the specific rates, (b) excise duty, royalty, cess, sales tax and other taxes/levies if any and (c) additional charges as may be negotiated between the producer and the purchaser for undertaking special sizing or benefication. 12. Terminological coal as mined is known as run of the mine and taking a cue from the same we may conveniently describe the coke as initially produced in the plant as run-of-the plant. The run-of the plant has been categorised as hard coke of different classes and grades in Table I and their prices fixed accordingly in Table V of the notification depending upon its ash content. That the coke so produced has to be suitably handled to segregate those required for foundries according to ISI specification is evident not only from the statements made in the counter affidavit of the appellant, but also from the foreword of the ISI report as quoted earlier. The Exercise so undertaken by the appellant to screen the run-of-the plant which has an unspecified size distribution to get the extra large size, specially earmarked for foundry would certainly be one for special sizing within the meaning of Note 14. The contention of Mr. Sanyal that since the respondent has not contracted for supply of special size it was not bound to pay for the same cannot be accepted as, in view of the definition of size under the Order, the appellant is obligated to sell only according to specifications of ISI. The note referred to in the table of ISI notification does not come in aid of Mr. Sanyal as it only empowers the ISI to specify different size ranges for special use besides those specified in the table and has no bearing to the issue involved in this appeal.13. Coming now to impugned judgment we find that in negativing the contention of the appellant based on Note 14, the High Court observed that the said Note had no manner of application to the facts of the case as the respondent did not purchase special size of coal. Unfortunately in taking the above observation the High Court failed to notice the definition of size under the Order and the report of the ISI in this regard.

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

Explanation:
1[ds]11. Having carefully considered the respective contentions of the learned counsel in the light of the material on record we are inclined to accept the contentions of Mr. Salve in preference to those of Mr. Sanyal. From a combined reading of the relevant clauses of the Order and the notes appended to the notification referred to earlier we may draw the following conclusionThe Central Government may, by Gazette Notification, fix the sale price of different grades and sizes of coal and coke and for different collieries, including plants for the production of coke.(ii) The prices so fixed are applicable to sale of coal at pit heads and of coke at coke oven plants.(iii) Prices given in table V of the notification for hard coke shall not apply to small sized hardcoke and other types of cokes as mentioned.(iv) No colliery owner shall sell and no person shall purchase coal or coke at a price which is in excess of the notified price.(v) However, besides the price so fixed, the colliery owner is entitled to realise (a) costs for transportation beyond a distance of 3 Kms to the loading point at the specific rates, (b) excise duty, royalty, cess, sales tax and other taxes/levies if any and (c) additional charges as may be negotiated between the producer and the purchaser for undertaking special sizing or benefication.Terminological coal as mined is known as run of the mine and taking a cue from the same we may conveniently describe the coke as initially produced in the plant as run-of-the plant. The run-of the plant has been categorised as hard coke of different classes and grades in Table I and their prices fixed accordingly in Table V of the notification depending upon its ash content. That the coke so produced has to be suitably handled to segregate those required for foundries according to ISI specification is evident not only from the statements made in the counter affidavit of the appellant, but also from the foreword of the ISI report as quoted earlier. The Exercise so undertaken by the appellant to screen the run-of-the plant which has an unspecified size distribution to get the extra large size, specially earmarked for foundry would certainly be one for special sizing within the meaning of Note 14. The contention of Mr. Sanyal that since the respondent has not contracted for supply of special size it was not bound to pay for the same cannot be accepted as, in view of the definition of size under the Order, the appellant is obligated to sell only according to specifications of ISI. The note referred to in the table of ISI notification does not come in aid of Mr. Sanyal as it only empowers the ISI to specify different size ranges for special use besides those specified in the table and has no bearing to the issue involved in this appeal.13. Coming now to impugned judgment we find that in negativing the contention of the appellant based on Note 14, the High Court observed that the said Note had no manner of application to the facts of the case as the respondent did not purchase special size of coal. Unfortunately in taking the above observation the High Court failed to notice the definition of size under the Order and the report of the ISI in this regard.