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TMI Blog1990 (10) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... ent appeal. 2. Shortly put, the facts of the case are that the appellants are engaged in generating electricity at their various generating stations situated in the State of Madhya Pradesh. Electricity falls under Item No. 11-E CET and chargeable to duty of excise at the rate of 2 paise per KWH under Section 3 of Central Excises and Salt Act, 1944. While assessing RT 12 monthly returns (electricity) submitted by the appellants it was found by the Superintendent, Central Excise concerned that in addition to actual supply of electricity to the auxiliary plants generating station for generation of electricity exempted from whole of the duty of excise under Notification No. 51/78, dated 1-3-1978 the appellants had availed exemption from duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (Appeals), N. Delhi, which was rejected by him vide his impugned Order-in-Appeal No. 389-C/IND/84, dated 12-7-1984 passed in C.No. 215/C/APP/IND/81. Hence the present appeal. The Department has also filed the Cross Objections with no relief except that the appeal be dismissed. 3. We have heard Shri B.L. Nema, learned Counsel for the appellants and Shri Jayanarayanan Nair, learned JDR for the respondent. 4. It was contended by Shri B.L. Nema, learned Counsel for the appellants that the authorities below erred in denying the benefit of transformation loss of 2% on generation in auxiliary plants and also of 65% transmission loss incidental to the sale to agricultural consumers. Elaborating on his arguments, he submitted as follows - (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n it to the tune of 2% should be taken in as the loss in generating itself and permitted to be exempted; and (3) that the exemption level for this purpose of concessions in sale for agricultural purposes be raised by incorporating the transfer losses from the point of generation to the point of consumption. It was pointed out that out of the quantity of 100 units generated only 35 units would be received at the transformers but the concessions would have to be for 100 units, incorporating the 65% losses, as they have been lost in the process itself. 5. In support of his contention, he drew our attention to para 3-5.1 (page 57) of the book Electric Energy System Theory written by Oilei Elgers (1978 Edition) where under the heading Loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... calculations with regard to transmission and distribution in respect of sale to agricultural consumers. He also cited order dated 26-8-1975 passed by the Board of Revenue, Madhya Pradesh, Gwalior in the case of M/s. Heavy Electricals (India) Ltd., Bhopal v. Commissioner of Sales Tax, Madhya Pradesh - a case decided under the M.P. Sales Tax Act and the case of Shree Synthetics Ltd., Ujjain v. U.O.I., 1982 (10) E.L.T. 97 (M.P.) wherein it was held by the Court that the crucial time for levy of duty is time of removal and not the date of manufacture or production of goods in the factory. He also drew our attention to Notification No. 51/78, dated 1-3-1978; Notification No 52/78-C, dated 1-3-1978; Notification No. 53/78-C, dated 1-3-1978 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two conditions namely (a) the electricity is supplied at the rates fixed from time to time by a State Electricity Board or State Electricity Department, or as the case may be, by a licensee under the Indian Electricity Act, 1910 (9 of 1910), for agricultural purposes, and (b) the said Board, Department or licensee, as the case may be, certifies to the satisfaction of the Assistant Collector of Central Excise that such electricity had been supplied for agricultural purposes. 8. It is settled law that electricity is goods. In the case of Commissioner of Sales Tax V.M.P. Electricity Board, AIR 1970 S.C. 732, it was held by the Apex Court that merely because electricity was not tangible it would not cease to be moveable property, because it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onverting the electrical energy received at one voltage to electrical energy at a different voltage. Hence, such transformers cannot be treated as auxiliary plant for the purpose of exemption contained in Notification No. 51/78. It may be stated that with regard to transformation loss concession up to 10% has already been extended to the generating stations in a blanket manner under Notification No. 105/78 and therefore, in the face of the language of the said Notification no additional concession on account of transformation losses is permissible. As regards the claim of the appellants with respect to 65% transmission losses while computing concession under Notification No. 106/78, relating to agricultural purposes, it may be stated that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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