2013 (9) TMI 223 - HC - Indian Laws

Categorization of the LPG Gas Bottling Plant Period of Limitation - According to the Petitioner, the activity of LPG Gas Bottling Plant is a manufacturing activity and, therefore, the Petitioner should be charged under category HTI Industrial. According to the Respondent, however, the aforesaid activity of the Petitioner is not a manufacturing activity and, hence, they are entitled to levy and charge electricity at HTII i..e commercial category. Since, the bill for HTII Commercial Category was received by the Petitioner - Whether the activity of running a gas bottling plant was a Commercial activity or a manufacture activity - Department was of the view that the activity of the assesse was not a manufacturing activity and they were entitled to levy and charge electricity - Held that - The grievances made by the assesse was within limitation - The activity will contribute a Manufacturing Activity - Neither the CGRF nor the Ombudsman had considered the relevant provisions of the Explosives Act, 1884 and the Gas Cylinder Rules 2004 - The assesse had elaborately explained before the Authority below that the process of the industry was not simple refilling LPG Cylinder - It was explained that the activity comprises of LPG suction, vapour distribution, degassification, compression of LPG vapour, external and internal cleaning, hydro pressure test, refilling, sealing, quality control etc. Whether the assesse carried on a manufacturing activity when it was running its Gas Bottling Plant, the matter deserves to be remanded to the Electricity Ombudsman - Held that - The Ombudsman had not considered all the Judgments and had dismissed the representation of the assesse - Rule was made partly absolute by setting aside the Judgment and Order passed by the Electricity Ombudsman in Representation No.82 of 2011 and the matter was remanded back to the Electricity Ombudsman for a de novo hearing - the Ombudsman shall apply his mind to the Provisions of the definition of the word manufacture under the Explosives Act, 1884 and the term manufacture of Gas under the Gas Cylinder Rules, 2004 .

Issues Involved:
1. Categorization of the LPG Gas Bottling Plant for tariff purposes.
2. Limitation period for filing grievances.
3. Whether the activity of the LPG Gas Bottling Plant constitutes a manufacturing activity.

Detailed Analysis:

Issue 1: Categorization of the LPG Gas Bottling Plant for Tariff Purposes
The dispute centers around whether the LPG Gas Bottling Plant should be charged under the HTI Industrial category or the HTII Commercial category. The Petitioner argues that the activity of the LPG Gas Bottling Plant is a manufacturing activity and should be categorized under HTI Industrial. Conversely, the Respondent contends that the activity does not constitute manufacturing and should be categorized under HTII Commercial. The Superintending Engineer, MSEDC Limited, Sangli Circle, sought guidance from the Chief Engineer (Commercial), who confirmed that HTII Commercial is the appropriate tariff for such depots, as per the MERC guidelines.

Issue 2: Limitation Period for Filing Grievances
The Consumer Grievance Redressal Forum (CGRF) and the Electricity Ombudsman dismissed the Petitioner's grievance on the ground that it was filed beyond the two-year limitation period stipulated under Regulation 6.6 of the MERC Regulations, 2006. The CGRF held that the cause of action arose on 1st July 2008, making the grievance filed on 14th October 2010 untimely. However, the Court found this reasoning erroneous, stating that the cause of action arose when the Internal Consumer Grievance Cell (IGR Cell) rejected the grievance on 27th October 2010. Thus, the grievance was within the limitation period.

Issue 3: Whether the Activity of the LPG Gas Bottling Plant Constitutes a Manufacturing Activity
The Petitioner argued that the LPG Gas Bottling Plant's activities, including LPG suction, vapour distribution, degassification, compression, cleaning, hydro pressure testing, refilling, sealing, and quality control, constitute a manufacturing activity. The CGRF and the Ombudsman, however, concluded that the activity is not manufacturing. The Court noted that the relevant provisions of the Explosives Act, 1884, and the Gas Cylinder Rules, 2004, were not adequately considered by the lower authorities. The Court highlighted Section 4(h) of the Explosives Act, which defines "manufacture" and Rule 2(xxxiii) of the Gas Cylinder Rules, which includes filling cylinders with compressed gas as manufacturing. The Court referenced the Gujarat High Court's judgment in Bharat Petroleum Corporation Ltd v/s. State of Gujarat, which held that a Gas Bottling Plant's activities are manufacturing activities.

Conclusion:
The Court found that the Petitioner's grievance was within the limitation period and that the CGRF and the Ombudsman erred in dismissing it on this ground. The issue of whether the LPG Gas Bottling Plant's activities constitute manufacturing was remanded to the Electricity Ombudsman for reconsideration. The Ombudsman is directed to consider the definitions under the Explosives Act, 1884, and the Gas Cylinder Rules, 2004, as well as relevant judgments from other High Courts.

Order:
The impugned judgment and order dated 17th August 2011 passed by the Electricity Ombudsman in Representation No.82 of 2011 are set aside. The matter is remanded back to the Electricity Ombudsman for a de novo hearing on whether the activity of the Gas Bottling Plant is a manufacturing activity. The Ombudsman is instructed to apply the definitions under the Explosives Act, 1884, and the Gas Cylinder Rules, 2004, and consider relevant judgments. The rule is made partly absolute with no order as to costs.

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