TMI Blog1985 (2) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Bihar State Electricity Board, respondent No. 2. 2. The petitioner is a public limited company running a small factory engaged in the production of steel ingots from steel scraps with the help of electric arc furnace. The energy is supplied by the respondent-Electricity Board. Prior to the passing of the Finance Act, 1978, no excise duty was payable for electricity. By section 36 of the Finance Act, the Excise Act was amended by inclusion of tariff item 11E, which reads as follows : "11E. Electricity 2 paise per kilo watt hour." Pursuant to the amendment, the respondent-Electricity Board issued a notification dated 13th May, 1978 as contained in the impugned Annexure I stating about imposition of the excise duty and levying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hedule indicates that "electricity" is not included in the expression "goods", for, Otherwise entry No. 54 by itself would have served the purpose. Reliance was placed on the observations in paragraphs 16 to 18 of the judgment in Union of India v. Delhi Cloth General Mills Co. Ltd. AIR 1963 SC 791 = 1977 E.L.T. (J 199). Mr, Aftab Alam, Standing Counsel, Central Government, representing the Union of India and Mr. Advocate General, the learned Counsel for the Electricity Board, defended the validity of the impugned tariff item and Annexure I. 5. The entry 84 in List I of Schedule 7 of the Constitution uses not only the word "manufacture" but also "produce". The expression "produce" is of a very wide connotation and, to my mind, it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in the present case as the same was given in relation to another Act but the observations made therein are certainly relevant for testing the general argument addressed before me. The argument of Mr. Chatterjee based on entries 53 and 54 of the second List mentioned above was also pressed before the Madhya Pradesh High Court and was accepted but the Supreme Court rejected it in the following terms (see para 9 of the judgment) : "The reasoning which prevailed with the High Court was that a well defined distinction existed between the sale or purchase of goods and consumption or sale of electricity, otherwise there was no necessity of having entry No. 53, but under entry 53 tax can be levied not only on sale of electricity but also on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consumed for one hour, a unit of kilowatt hour cannot be reckoned. 8. The learned Standing Counsel, Central Government, challenged the proposition by relying on statements extracted from the books. (i) The Electrical Engineers Reference Book (ii) Electrical Technology by H. Cotton (iii) Standard Hand Book for Electrical Engineers as contained in Annexures A, B and C respectively to the supplementary counter-affidavit of the respondent No. 1. A counter-affidavit on behalf of the Electricity Board was also filed in which it was asserted that the kilowatt hour is unit of measurement of technical (sic) energy whether it is generated or consumed. The three affidavits have attempted to discuss the question from a scientific point of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immediate effect under the Act." The section 4 of the Act further directs that "a declared provision shall have the force of law immediately on the expiry of the day on which the Bill containing it is introduced." In the last counter-affidavit of the respondent No. 2, it has been stated that the necessary notification containing the required declaration had been made at the appropriate time so as to bring the new provisions in force with effect from 1st March, 1978. In view of this counter-affidavit, Mr. Chatterjee did not pursue the point. 10. Lastly, it was urged that since the additional burden of the Electricity Board was raised by only 2 paise per unit, it cannot be permitted to raise the charges by 3 paise per unit. The Electrici ..... X X X X Extracts X X X X X X X X Extracts X X X X
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