SC defers relief for govt on Rs 200 cr excise issue

A Supreme Court Bench headed by Justice B N Agarwal has refused to give immediate relief to the Government, which challenged the Madras High Court ruling that quashed its notices demanding excise duty from three power firms.      

The Finance Ministry had moved the Supreme Court alleging that three power companies, GMR Power Corporation, Madurai Power Corp and Samalpatti Power Company, had inappropriately availed excise duty exemptions and procured raw material for electricity generation without paying duty.      

It alleged that the companies had made a duty-free procurement of low sulphur heavy stock without licence for electricity generation.      

While GMR Power Corporation Pvt Ltd was asked to pay duty of Rs 152.75 crore on low sulphur heavy stock, Madurai Power Corporation Pvt Ltd and Samalpatti Power Company Pvt Ltd were asked to shell out around Rs 21 crore and Rs 41.87 crore, respectively.      

The Ministry had issued Central Excise notification dated March 1, 2002, providing exemption on residues of petroleum oils obtained from bituminous minerals including heavy petroleum stock, low sulphur heavy stock and other residual fuel oils for use as fuel for electricity generation.      

The exemption was given to firms having licence under the Indian Electricity Act, 1910, except those who produce power only for captive consumption, it added.