Electricity Act, 2003 – ss. 63, 125 – Foreign Trade (Development & Regulation) Act, 1992 – s.5 read with Paragraph 1.2 of the FTP – Customs Act, 1962 – Availability of benefits under the Foreign Trade Policy to power plant as of the cut-off date – Claim for Deemed Export Benefits, eligibility – Withdrawal of Foreign Trade Policy Para 8.3 benefits, if constitutes change in law – Appellants-NPL and TSPL, Special Purpose Vehicles formulated to develop Mega Watt coal-fired power project at Rajpura, Punjab, through Tariff-Based Competitive Bidding, entered into a Power Purchase Agreement with Punjab State Power Corporation Limited-PSPCL – NPL sought concessions or exemption from payment of customs duty while importing capital goods – FTP amended that Terminal Excise Duty exemptions under the FTP would not be available for the supplies made to a non-MPP (with cut-off date being 01.10.2009) – Petition by NPL that the Mega Power benefits were factored into the bid and hence did not warrant pass-through to PSPCL, and compensation under Art. 13.1.1(ii) of the PPA for the withdrawal of FTP benefits post the cut off date of 02.10.2009, alternatively – State Commission dismissed the Petition holding that since the NPL had elected to avail benefits under the MPP 2009, it was precluded from claiming concurrent benefits under the FTP and withdrawal of benefits by DGFT did not constitute as a “Change in Law” within the meaning of Art. 13 of the PPA – Appellate tribunal also rejected the claims by the NPL and primarily the challenge to the post-bid withdrawal of fiscal incentives which were allegedly available earlier under the FTP and their classification as a “Change in Law” event under the PPA – Interference with: Held: Not called for – Press Release dated 01.10.2009 would neither amount to “law” within the meaning conceptualized in the PPA, as it would only be the Notifications dated 11.12.2009 and 14.12.2009 that would have amounted to “law”, nor it would thereby amount to “Change in Law” – Essential prerequisites that ought to be satisfied by the appellants in order to be eligible for the deemed export benefits are the claim for Deemed Export Benefits relates exclusively to “goods” and is inapplicable to any other thing which is not “goods”, such goods, though supplied, do not physically exit the territorial boundaries of the country; that the goods to be supplied must be “manufactured in India”; that there must be an act constituting “supply of goods” to the power projects for the project to claim Deemed Export Benefits; that the act of “supply of goods” is either by the main contractor and/or the sub-contractor to the concerned power project; and the supply is undertaken strictly in accordance with the procedural framework prescribed under ICB – Embedded power plant of hundreds of Mega Watts would not be able to qualify as “capital goods” for entitlement of the appellants under the FTP for the deemed export benefits – Para 9.36 of the FTP requires that the manufactured good should have been brought into existence with a distinctive name, character, or use, such a feasibility impossible when it comes to the concerned power plants – Supply of goods” to a power plant, as is contemplated u/Para 8.2(g) of the FTP remains unfulfilled – Even at the time of bidding, the to-be then constructed Power Plant itself was deemed as the concerned capital goods for the deemed export benefits, implying that there was no distinct supply of goods by either a main contractor or a sub-contractor thereof – Such a situation of suo moto acclaimed manufacturing in the Project’s own right shall not stand the instant test – Appellants, failed to establish the procurement of “supply of goods” as per the mandate of ICB either at the stage of Independent Power Producer or Engineering Procurement Contract, owing to the fact that such procurement of the components was done through directly entering into contract with their subsidiaries or joint venture or related companies – Thus, the appellants not entitled to the deemed export benefits under Para 8.3 of the FTP for their inability to fulfil the essentail prerequisites – Plea as to the alleged withdrawal of the said benefits through notifications of DGFT dated 28.12.2011 and 21.03.2012 collectively and whether that would amount to a “Change in Law” as per Art. 13 of the PPA not delved into – Said notifications issued through DGFT mere clarificatory in nature – No interpretation of law was undertaken prior to the cut-off date to the effect that a developer shall be able to import goods to be assembled into a power plant and also claim the deemed export benefits on those, thus, tribunal correctly concluded the said circulars to be merely clarificatory and not as something which has either changed or introduced something new, being allegedly oppressive towards the appellants – In view thereof, appellants not entitled to restitutionary relief in the form of compensation. [Paras 44, 57-62, 67-80]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Nidhi Jain. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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