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TMI Blog2010 (5) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... i S. Murugappan, Advocate, for the Respondent. [Order per : Chittaranjan Satapathy, Member (T)]. - Heard both sides. 2. Shri C. Dhanasekaran, learned SDR appearing on behalf of the Department states that the respondents are seeking concessional rate @ 5% applicable to power generation projects whereas they have imported a captive power plant which is chargeable to duty @ 20%. He takes us through the Power Purchase Agreement, the respondents have made with the India Cements Ltd. (ICL), under which the latter is required to purchase the entire electrical energy generated by the respondents (CECL). He also takes us through the Electricity Act, 2003 and the Electricity Rules, 2005 and states that since M/s. ICL and its subsidiary M/s. IC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the time of finalization of the assessment. He also states that both the units, M/s. ICL and. M/s. CECL, are two separate legal entities and the power plant belonging to one entity cannot be taken as a captive power plant of another entity. He also refers to Notification No. 21/2002-Cus., dated 1-3-2002 (Sl. No. 399) and states that the captive power plant should be such as set up by projects engaged in activity other than in power generation whereas M/s. CECL had no other activities. The learned counsel states that both the cited decisions relate to cases of non-registration under project import whereas in the present case the registration has already been done under Project Import Regulations. 4. We have considered the submissions fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion project which generates and supplies power to consumers in general and a captive power plant set up for supply of power to a dedicated manufacturing unit is very clear. In the instant case, the respondent's power plant has been set up particularly to cater to M/s. ICL who are the sole consumer of the power produced and who hold more than 49% of the share in the respondent-company. Further, as demonstrated in the detailed order passed by the original authority, they control the entire affairs of the respondent-company. Under Rule 3 of the Electricity Rules, 2005 also, the impugned power plant has to be considered as captive power plant since the captive user namely M/s. ICL has more than 26% of the ownership of the respondent-company and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before any appeal can be preferred against the assessment. Hence, the submission of the learned counsel that the Department should have gone in appeal against the project registration is without any merit. Moreover, the terms of the agreement make it very clear that the impugned power project has been specially put up for generating and supplying power to M/s. ICL who have total control over the functioning of the respondent-company. As such, the order passed by the lower appellate authority allowing 5% duty benefit applicable to power generation project in respect of the impugned captive power plant can not be sustained. Hence, we set aside the impugned order passed by the lower appellate authority and restore the order passed by the adj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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