Court Upholds Industrial Tariff for Manufacturing Activity in Electricity Tariff Dispute. Appellate Authority's Decision Affirmed; R&D Activity Categorized as Manufacturing, No Unauthorized Use of Electricity Found

Case Note & Summary

The petition challenges an order from the Appellate Authority under the Electricity Act which determined the tariff category for the respondent’s activities. The petitioner claimed the respondent's activities were research and development (R&D) and therefore subject to commercial tariff, while the Appellate Authority deemed the activities as manufacturing, thus subject to industrial tariff. The court upheld the Appellate Authority's decision, determining that the respondent's activities constituted manufacturing and thus were correctly categorized under the industrial tariff. The petitioner's argument that the respondent's use of electricity was unauthorized was also rejected.

1. Hearing of Counsels Counsels Involved: Mr. Rahul Sinha (petitioner), Mr. Navroz Seervai (respondent) 2. Background of the Petition Order in Question: Appellate Authority's order dated 18.09.2017 Issue: Whether respondent's activities are categorized as research and development (R&D) or manufacturing 3. Petitioner's Arguments Original Consumer: Aviat Healthcare Pvt. Ltd. Unauthorized Use: Premises licensed to respondent without petitioner's permission Activity Type: Claimed R&D activity, thus commercial tariff applicable 4. Respondent's Arguments Inspection Reports: Activities classified as manufacturing Supporting Documents: License from FDA, Factories Act registration, Central Excise Registration Totality of Process: Emphasis on the nature of the process undertaken 5. Tariff Categorization Activity-Based Tariff: Manufacturing (HT-I, industrial tariff) vs. R&D (HT-II, commercial tariff) Court's View: Tariff does not depend on the premises but the activity 6. Illogical Argument Rejected Premises Irrelevance: Tariff categorization should not depend on whether R&D is within industrial premises or not 7. Detailed Activity Description Nature of Respondent's Activities: Developing/manufacturing drug substances 8. Definition of Manufacture Legal Precedents: Various case laws and dictionary definitions explained the term ‘manufacture’ Relevance to Context: Adaptation to modern technologies and processes 9. Inspection Report Joint Inspection Report: Dated 02.09.2016 confirmed manufacturing activities 10. Supporting Licenses and Certificates FDA License: License to manufacture and distribute drugs Central Excise Certificate: Required for manufacturing excisable goods 11. Contextual Understanding D&C Act Definition: Manufacture with a view to sale or distribution 12. Compliance with D&C Rules Manufacturing License: License for manufacturing under Schedule C & C(1) drugs 13. Conclusion Activity Categorization: Respondent’s activities deemed manufacturing 14. Unauthorized Use Argument Explanation of Section 126: Unauthorized use of electricity not applicable as premises remained the same 15. Final Judgment Petition Dismissed: No reason to interfere with the Appellate Authority’s order Costs: No order as to costs