TMI Blog2022 (8) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... levy of electricity duty, do not suffer from any illegality or infirmity whatsoever, warranting interference therein. Petition dismissed. - D.B. Civil Writ Petition No. 2486/2018, 1557/2018, 1558/2018, 1559/2018, 2484/2018 - - - Dated:- 20-7-2022 - HON'BLE MR. JUSTICE SANDEEP MEHTA AND HON'BLE MR. JUSTICE KULDEEP MATHUR For Petitioner: Mr. Sanjeev Johari, Senior Advocate assisted by Mr. Lalit Parihar For Respondent: Mr. Hemant Dutt ORDER The instant bunch of writ petitions has been preferred by the petitioner M/s Guljag Industries Ltd. for assailing action of the respondents in demanding electricity duty from the petitioner and to assail the orders passed by the Appellate Authority and the Revisional Authority dated 15.03.2010 and 17.10.2017 respectively, affirming the demand for electricity duty raised against the petitioner by the Commercial Taxes Authority, Jodhpur. Shri Sanjeev Johari, learned Senior Counsel assisted by Shri Lalit Parihar, Advocate, submitted that the petitioner company is involved in various commercial activities and established a captive power plant for the purpose of its own consumption and the consumption of its sister ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Revisional Authority, deserve to be declared invalid and quashed. Per contra, Shri Hemant Dutt, learned counsel representing the respondents Commercial Taxes Department, urged that the view taken by Hon ble the Supreme Court in the case of M/s. Renusagar Power Co. (supra), has been distinguished in the case of A.P. Gas Power Corporation Ltd. Vs. A.P. State Regulatory Commission Anr. reported in (2004) 10 SCC 511. He urged that the circular dated 12.12.1989 issued by the department, makes it clear that the exemption from paying electricity duty on consumption of energy is available only to a person who has generated the same for his /its own use. He urged that it is an admitted position, that the petitioner sold electricity to the company Guljag Gases Pvt. Ltd., and such transaction cannot be covered under the condition consumption of electricity generated for own use and hence, the respondents were absolutely justified in charging electricity duty from the petitioner on the energy sold to Guljag Gases Pvt. Ltd.. He placed reliance on the following judgments in support of his contentions and implored the Court to dismiss the writ petition and affirm th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject to the condition that the exemption under this sub clause shall not be applicable to energy consumed in buildings or part of buildings, used for commercial or residential purposes. (3) where the State Government is of the opinion that it is necessary or expedient in the public interest so to do, it may, by notification in the Official Gazette, exempt fully or partially, whether prospectively or retrospectively, from payment of electricity duty payable on energy consumed by any consumer or class of consumers, without any condition or with such condition as may be specified in the notification.] reduce or remit.- (a) the electricity duty on the energy consumed- (i) by a consumer in any industry in the manufacture, production processing or repair of goods; (i-a) by a person generating energy for his own use or consumption; (ii) by or in respect of any mine as defined in the Mines Act, 1952 (Central Act 35 of 1952); (b) Whether prospectively or retrospectively the electricity duty on the energy consumed by or in respect of any municipal board or council or Panchayat or Panchayat Samiti or other local authority for the purpose of or in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsequently, it was not a case where, the energy generation company i.e. M/s. Renusagar Power Co., was generating and transferring electricity to another company, loosely termed as sister concern. It was held that :- Whenever felt necessary, the State or the Board have themselves lifted the corporate veil and have treated Renusagar and Hindalco as one concern and the generation in Renusagar as the own source of generation of Hindalco. The profits of Renusagar have been treated as the profits of Hindalco. There was no question of evasion of taxes but the manner of treatment of the power plant of Renusagar as the power plant of Hindalco and the Government taking full advantage of the same in the case of power cuts and denial of supply of 100 per cent owner to Hindalco, underline the facts and, as such, imply acceptance and waiver of the postion that Renusagar was a power plant owned by Hindalco. Hindalco and Renusagar are inextricably linked up together. Renusagar has in reality no separate existence apart from and independent of Hindalco. Thus persons generating and consuming energy are the same. Therefore, by lifting the corporate veil Hindalco and Renusagar should be treate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld as below :- In CCE v. Rajasthan State Chemical Works the test laid down by this Court is whether the process and the use are integrally connected. As stated above, electricity generation is more of a process having its own economics. Applying the said test, we hold that when the electricity generation is an input used in the manufacturing activity and the input used in that electricity generation is an input used in the manufacture of final product. However, to the extent the excess electricity is cleared to the grid for distribution or to the joint ventures, vendors, and that too for a price (sale) the process and the use test fails. In such a case, the nexus between the process and the use gets disconnected. In such a case, it cannot be said that electricity generated is used in or in relation to the manufacture of final product, within the factory . Therefore, to the extent of the clearance of excess electricity outside the factory to the joint ventures, vendors, grid, etc. would not be admissible for CENVAT credit as such wheeled out electricity, cleared for a price, would not fall within the definition of input in Rule 2(g) of the CENVAT Credit Rules, 2002. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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