Broad construction of generating station under exemption notification upheld for factory-based power unit, but related electricity use remained ineligible.

For exemption notification purposes, a "generating station" was construed broadly to include any station generating electricity, including a power unit attached to a factory, unless the notification expressly restricts that class of station. On that construction, the factory-based generating unit fell within Notification No. 105/78 and qualified for the uniform reduction of 10% of electricity generated. Electricity consumed in crushing wheat and pumping water did not qualify under Notification No. 52/78 because those uses were outside the exempted industrial unit activity. The order was therefore sustained in substance, with the assessee succeeding on the first issue and failing on the second.

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Issues: (i) Whether a power generating unit attached to a factory is a "generating station" for the purpose of Notification No. 105/78 and entitled to the uniform reduction of 10% of electricity generated. (ii) Whether electricity consumed in crushing wheat and pumping water was eligible for exemption under Notification No. 52/78 as electricity used in an industrial unit.

Issue (i): Whether a power generating unit attached to a factory is a "generating station" for the purpose of Notification No. 105/78 and entitled to the uniform reduction of 10% of electricity generated.

Analysis: The definition of "generating station" was construed broadly to cover any station for generating electricity and was not confined to stations meant for public distribution or consumption. On that construction, the fact that the generating unit was attached to a factory did not exclude it from the scope of the notification.

Conclusion: The factory-based generating unit was held to be a generating station within Notification No. 105/78, and the Revenue's appeal on this point failed.

Issue (ii): Whether electricity consumed in crushing wheat and pumping water was eligible for exemption under Notification No. 52/78 as electricity used in an industrial unit.

Analysis: The respondents were manufacturers of tea, and the electricity was consumed in activities not covered by the exemption. The benefit of the notification was therefore not available to that consumption.

Conclusion: The electricity used in crushing wheat and pumping water was not eligible for exemption under Notification No. 52/78, and the cross-objection failed.

Final Conclusion: The order under appeal was affirmed in substance, with the assessee succeeding on the Revenue's appeal and failing on the cross-objection.

Ratio Decidendi: For exemption notification purposes, a generating station includes any station generating electricity, including one attached to a factory, unless the notification expressly limits the class of stations covered.

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