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of <h1>Court rules in favor of petitioners on electricity duty reclassification for LPG plants, orders refund and future adjustments.</h1> The Court ruled in favor of the petitioners in the case concerning the reclassification of electricity duty for LPG Bottling Plants. It found the ... Whether the determination by the respondent No.2 that the Industrial Undertaking of the petitioner at Hariyala is liable to be assessed at 60% of the consumption charges of electricity and for which no reason have been given and hence the said determination is void, illegal and have no legal effect? Held that:- The respondent authorities are not justified in collecting/adjusting and/or enforcing the recovery of electricity duty at the rate of 60% by reclassifying the electrical energy consumed by the petitioners for their activities. As per the definition of “industrial undertaking” given in Section 2(bb) of the Act, the petitioners' activities fall within the ambit of this definition. The Government of India in exercise of power conferred by Sections 5 and 7 of the Indian Explosives Act, 1884 has made Rules known as Gas Cylinder Rules, 1981. The Rule-2, Sub-clause-xxv defines the expression 'manufacturing of gas' which means filling of a cylinder with any compressed gas and also includes transfer of compressed gas from one cylinder to any other cylinder.” Thus, filling of LPG Gas Cylinder is evidently a process of manufacture and, therefore, the petitioners are Industrial Undertakings consuming high tension energy as provided by Section-3(1) and Clause 5(a) of the Schedule to the Act and as such the respondents had initially correctly levied duty at 20% of the consumption charges. Appeal allowed. Issues Involved:1. Validity of reclassification of electricity duty for LPG Bottling Plants.2. Whether LPG Bottling Plants qualify as 'Industrial Undertakings' under the Bombay Electricity Duty Act.3. Legality of retrospective application of revised electricity duty.4. Entitlement to refund of excess electricity duty paid.Detailed Analysis:1. Validity of Reclassification of Electricity Duty for LPG Bottling Plants:The petitioner contested the reclassification of their LPG Bottling Plant from an industrial undertaking subject to 20% electricity duty to one subject to 60% duty. The Court found that the respondent authorities were not justified in reclassifying the electrical energy consumed by the petitioners. The Court emphasized that the reclassification was arbitrary and opposed to the principles of natural justice, as the Assessing Officer cannot change the classification retrospectively once it has been made and duty has been paid accordingly.2. Whether LPG Bottling Plants Qualify as 'Industrial Undertakings':The petitioners argued that their LPG Bottling Plants should be classified as 'Industrial Undertakings' under Section 2(bb) of the Bombay Electricity Duty Act. They highlighted that the manufacturing process, as defined under the Gas Cylinder Rules, 1981, includes filling a cylinder with compressed gas, which qualifies as a manufacturing activity. The Court agreed, stating that filling LPG gas cylinders is evidently a process of manufacture, thus the petitioners' plants qualify as Industrial Undertakings. This classification justified the initial levy of 20% duty.3. Legality of Retrospective Application of Revised Electricity Duty:The petitioners challenged the retrospective application of the revised electricity duty, arguing that it was illegal and unjust. The Court supported this view, stating that the Assessing Officer's action of changing the classification retrospectively was arbitrary and illegal. The Court held that once the classification was made and duty collected accordingly, it could not be altered retrospectively.4. Entitlement to Refund of Excess Electricity Duty Paid:The petitioners sought a refund of the excess electricity duty paid under protest. The Court directed the respondent authorities to refund the amount paid by the petitioners against the differential duty, with 9% interest per annum. The Court also allowed the possibility for the respondent authorities to adjust the refund amount against the petitioners' future electricity duty liabilities.Conclusion:The Court quashed the communications and orders demanding the higher duty and directed the respondent authorities to refund the excess amount paid by the petitioners with interest. The Court affirmed that the petitioners' LPG Bottling Plants qualify as Industrial Undertakings, and thus, the initial levy of 20% duty was correct. The Court ruled that the retrospective reclassification and demand for higher duty were illegal and unjust.
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