PUNJAB STATE ELECTRICITY REGULATORY COMMISSION
SCO NO. 220-221, SECTOR 34-A, CHANDIGARH
Petition No. 30 of 2012
Date of Order: 12.11.2012
In the matter of :
Petition under Section 86(1)(f) of the Electricity Act, 2003
in relation to disputes arising under the PPA dated
18.01.2010 between the petitioner herein – Nabha Power
Limited and Punjab State Power Corporation Limited
(PSPCL), a successor entity of the Punjab State
Electricity Board (PSEB) - 2x700 MW Rajpura Thermal
Power Project being executed by Nabha Power Limited
under the PPA dated 18.01.2010 - Changes in the Mega
Power Policy, 2006 and the Foreign Trade Policy, 2009 –
2014 and the corresponding claims of the parties under
Article 13.1 of the PPA dealing with „Change in Law‟
provision.
AND
In the matter of
1.
Nabha Power Limited, SCO 32, Sector 26-D, Madhya
Marg, Chandigarh -160019.
2. L & T Power Development Limited, Powai Campus, Gate
No.1, C Building, 1st Floor, Saki Vihar Road, Mumbai –
400072.
Versus
Punjab State Power Corporation Limited, Patiala
Present:
Smt.Romila Dubey, Chairperson
Shri Virinder Singh, Member
Shri Gurinderjit Singh, Member
ORDER
Nabha Power Limited (NPL), the petitioner No.1, is a company
incorporated under the Companies Act, 1956, for
Thermal Power Project (Project) at
developing the Rajpura
village Nalash, near Rajpura, District
Patiala. L & T Power Development Limited and the petitioner No.2 is also a
company, which participated in competitive bidding under Case 2 for
development of the project and emerged as successful bidder. The petitioners
1
have filed this petition under Section 86(1)(f) of the Electricity Act, 2003 (Act)
in relation to disputes arising out of Power Purchase Agreement (PPA) dated
18.01.2010 between NPL and Punjab State Power Corporation Limited
(PSPCL).
2.
The case of the petitioners is that :
(i)
The erstwhile PSEB (now succeeded by PSPCL and PSTCL after
unbundling on 16.4.2010) invited competitive bids on 10.06.2009
under Section 63 of the Electricity Act 2003 through NPL, then a
Special Purpose Vehicle (SPU) as its authorized representative
for development of the project and procurement of power on long
term basis.
(ii)
Pursuant to the bids, petitioner No.2, was the successful bidder.
Petitioner No.2 acquired
NPL, as per terms of the
bid
documents. NPL and PSPCL signed PPA dated 18.01.2010.
(iii)
The petitioners have
submitted that petitioner No.2 had
considered fiscal benefits under two policy regimes i.e. under the
Foreign Trade Policy 2009-14 (“FTP”) and Mega Power Policy
2009 (“Mega Policy, 2009”) before submitting its bid for
development of the Project. Under FTP the following benefits
were available:
(a)
Advance Authorization / Advance Authorization for
annual requirement / Duty free import Authorization
(“DFIA”) ;
(b)
Deemed Export Drawback ;
(c)
Exemption from terminal excise duty (“TED”) where
supplies are made against International Competitive
Bidding (“ICB”). In other cases (supplies not against
ICB), refund of TED is to be given.
As regards Mega Policy, 2009, the petitioner has submitted that
the Union Cabinet‟s decision to
modify Mega Policy
2006,
removing the condition of selling power to two or more states of
Thermal Projects of 1000 MW or more capacity to be eligible for
2
benefits under the policy was taken on 01.10.2009 and was
reported in Press Information Bureau (PIB) on 01.10.2009
whereby the Project became eligible as Mega Power Project
(MPP) for the benefits under Mega Policy 2009.
(iv)
RfP provided that quoted tariff shall be an inclusive tariff and
bidder was to take into account all costs including taxes and
duties.
(v)
The petitioners have further submitted that similar fiscal benefits
were concurrently available under FTP irrespective of the Project
being MPP or Non-MPP.
(vi)
The petitioners have submitted that decision of Union Cabinet
was taken and reported on 01.10.2009, eight (8) days before the
last date for submission of bids which was 09.10.2009. The
petitioner No.2 requested for extension of bid deadline vide letter
dated 02.10.2009 on account of „recent changes‟ in Mega Policy,
2006. The petitioner No.2 again submitted letter dated 06.10.2009
which stated that bid was being submitted in the light of changes
approved by the Union Cabinet. Thereafter Department of
Revenue, Ministry of Finance, Govt. of India, amended the
Principal Customs Notification No.21/2002 dated 01.03.2002 vide
Notification No.137/2009 – Customs dated 11.12.2009 (Custom
Amendment Notification) exercising its powers under Section 25
of the Customs Act, 1962, whereby eligibility criteria for Mega
Power Project under Entry 400 was amended. Prior to the
amendment, a project to qualify as MPP was required to have an
inter-state sale of power, which condition was removed vide
notification dated 11.12.2009 for thermal power plants with
capacity of
1000 MW or more.
Thereupon an office
memorandum dated 14th December 2009 on revised Mega Power
Project policy was issued by Ministry of Power, Govt. of India.
(vii)
The petitioners have further submitted that petitioner No.1 (NPL)
signed a contract with M/s Larsen & Toubro Limited on EPC basis
which included supply of thermal power generation equipment.
3
Larsen & Toubro Limited had in turn entered into a contract with
Larsen & Toubro MHI Boilers Ltd. to import the goods.
For
availing concessional custom duty available for MPP, the order for
the concessional customs duty certificate was required to be
issued to the Customs Authorities at Mundra Port by the Principal
Secretary, Department of Power, Govt. of Punjab. Accordingly,
the
Engineer-in-Chief
No.NPL/SKN/PSPCL-070
PSPCL
dated
was
24.01.2011
requested
enclosing
vide
MPP
certificate for the Project issued by MoP, GoI, vide letter dated
30.07.2010 to recommend the case to GoP for issuance of
necessary orders.
(viii)
The respondent PSPCL replied vide letter dated 04.02.2011 and
requested NPL to provide :
(a)
copies of all the contracts along with their amendments in
terms of which goods for the Project are to be imported ;
(b)
an affidavit indemnifying the Respondent against adverse
consequences arising out of wrong claim of benefits (if
any) by the Petitioner No.1 for the Project in the enclosed
format ; and
(c)
an affidavit stating that the benefits of mega status granted
to the Project will be passed on to the Respondent as per
Article 13.3 of the PPA in the enclosed format.
The petitioner No.1, NPL, replied vide letter dated 17.02.2011 and
provided documents as requested at (a) & (b)
but in relation to
(c) above the NPL stated that it had already factored in the
benefits available to a MPP in its quoted tariff in the bid in view of
Union Cabinet decision dated 01.10.2009 and therefore there was
no basis for submission of affidavit to ensure passing on such
benefits to PSPCL at the future date.
(ix)
The respondent PSPCL again asked NPL vide letter dated
04.03.2011 to submit affidavit mentioned at (c) of para (viii) above
because MPP status was not available to the Project at the time of
4
submission of bids. The petitioner replied vide letter dated
10.03.2011 and submitted relevant contracts as demanded by
PSPCL in its letter dated 04.03.2011 along with the
affidavit
indemnifying PSPCL against adverse consequences but did not
agree to submit the affidavit undertaking to pass on the custom
duty benefits available to MPP. PSPCL refused to accept the
explanation of NPL and reiterated its request vide letter dated
28.03.2011 to furnish the affidavit on the format already supplied.
NPL again requested PSPCL not to hold up the recommendation
to the GoP for issuance of Essentiality Certificate vide letter dated
07.04.2011 as the
consignment of
imported equipment for
project was due by mid April 2011.
(x)
PSPCL vide letter dated
20.05.2011 to NPL conveyed that
Project was granted the mega power status vide Ministry of
Power‟s letter dated 30.07.2010 post issuance of Mega Policy
2009 by way of Office Memorandum dated 14.12.2009 and hence
„Change in Law‟ provision under Article 13 of the PPA was
applicable. The benefits had accrued to the Project after
submission of the bid and as such NPL was required to pass on
the benefits to PSPCL in terms of formula set out at Article 13.2(a)
of the PPA. The petitioner No.1 and respondent reiterated their
position on the issue vide letter No.NPL/CE/PSPCL/022 dated
23.05.2011
and
No.4726/27/DPT-97
dated
23.05.2011
respectively.
(xi)
The Department of Power, Govt. of Punjab vide letter dated
16.06.2011 issued the Essentiality Certificate for first consignment
for the Project. The Department of Power allowed the entry of
goods at concessional customs duty subject to the right of PSPCL
to seek appropriate reduction in tariff on account of decrease in
the capital cost of the Project in terms of Article 13 of the PPA
dated 18.01.2010. After exchange of further correspondence, the
Department of Power, Govt. of Punjab issued Essentiality
Certificate for further consignments to Custom Authorities vide
5
letter dated 13.12.2011 on identical conditions as issued vide
letter dated 16.06.2011 and has allowed the entry of goods at
concessional custom duty subject to the right of PSPCL to seek
reduction in tariff on account of decease in capital cost of the
Project under Article 13 of the PPA.
3.
The petitioners have also submitted an alternative prayer to declare
that the petitioners shall be entitled to claim „Change in Law‟ against
respondent‟s claim under „Change in Law‟ (Article 13 of PPA) due to Mega
Policy 2009, on the basis of withdrawal of fiscal benefits allegedly available o
the petitioners under FTP. Here the case of the petitioner is as under:(i)
Similar fiscal benefits were available to the Project under FTP
at the time of bidding regardless of the status of the Project
under Mega Power Policy, which was withdrawn by relevant GoI
authorities subsequent to change in Mega Policy 2006 vide
Mega Policy 2009. Therefore the petitioners have also a claim
under „Change in Law‟ provision under Article 13 of the PPA.
(ii)
Under the
prevailing FTP effective from 27.8.2009 upto
31.03.2014 the benefits were available to the „Deemed Exports‟
i.e. those transactions in which goods supplied do not leave
India and payment for such supplies is received either in Indian
rupee or in free foreign exchange. Para 8.2 of the FTP specifies
the categories of supply which are regarded „Deemed Exports‟
provided such goods are manufactured in India. Setting up of
power plant is covered under the definition of „manufacture‟.
Accordingly petitioner No.2 has submitted that fiscal benefits
were available to Non-MPP under FTP on the date of bidding in
terms of para 8.3 of FTP, which
provides that any or all of
benefits were available to manufacturer and supply of goods
qualifying as „deemed exports‟ as under :
(a)
Advance Authorization / Advance Authorization for annual
requirement / DFIA ;
(b)
Deemed Export Drawback ;
6
(c)
Exemption from TED where supplies are made against
International Competitive Bidding (ICB). In other cases
(supplies not against ICB), refund of TED is to be given.
(iii)
The petitioners have submitted that following benefits were
available to Non-MPP, in terms of paragraph 8.3 of the FTP:
(i)
Customs duty benefits under para 8.3 (a) or 8.3 (b) were
available as under 8.3 (a) no custom duty was payable whereas
under 8.3 (b) & (c) the TED was refundable.
(iv)
At the time of bidding, the Director General of Foreign Trade
(DGFT) was actually granting refund of Terminal Excise Duty
(TED) both through direct and draw-back routes. On this basis,
Non-MPP developer could have considered that refund of TED
would be available for the Project.
(v)
The petitioner No.1 had sought the opinion from BMR Mumbai
and Ernest & Young Private Ltd. Ahmedabad which had
confirmed that benefits available to MPP and non-MPP on bid
submission date was identical.
(vi)
The petitioner No.1, took up the matter vide letter dated
27.01.2012 with the
respondent stating that at the time of
bidding, the Project was entitled to identical benefits under Mega
Policy 2009 and the FTP 2009-14 as FTP benefits
were
available till the recent changes. „Change in Law‟ claim on basis
of FTP was made by the petitioner No.1 in view of „Change in
Law‟ claim by the respondent on basis of Mega Power Policy
2009. The petitioner No. 1 requested respondent to revisit the
case and consider the claim of the
petitioner No.1
under
„Change in Law‟ provisions on the basis of withdrawal of fiscal
benefits available to the petitioners under FTP against accrual of
claim to the respondent under Mega Power Policy, 2009. The
respondent replied vide letter dated 12.03.2012 stating therein
that there had been no „Change in Law‟ effected by DGFT to the
FTP provisions and that the Project could not have availed TED
or custom duty benefits unless and until the Project qualified to
7
have a MPP status which was actually granted to it by the
Ministry of Power on 30.07.2010.
(vii)
The petitioners have however submitted that after the award of
Project and signing of PPA, Policy Interpretation Committee
(PIC) vide its meeting No.10/AM 11 held on 15.03.2011 issued
clarification regarding application of para 8.3 (b) and 8.3 (c)
regarding draw-back and refund of TED to a non-Mega Power
Project and held that same was not available for non-Mega
Power
Project.
Thereafter
DGFT
circulated
letter
No.01/12/180/AM 05 PC VI PF/18 dated 27/28 April, 2011 to
give effect to the decision of PIC. The petitioners submitted that
benefits to the Project were therefore available prior to
27/28.4.2011.
4.
In view of above submissions made in the petition, the petitioner made
following prayer :
(a)
to declare that the Union Cabinet‟s decision dated 01.10.2009
modifying the Mega Policy 2006 reported vide Press Information
Bureau on the same date does not amount to „Change of Law‟
under Article 13 of the PPA ;
(b)
following the declaratory relief sought by the Petitioners, to hold
that consequential relief as set out under Article 13.2 of the PPA
has not triggered and no consequential benefits under Article 13
have to be passed on to the Respondent by the Petitioner under
the PPA on account of Union Cabinet‟s decision to change the
Mega Policy 2006 dated 01.10.2009;
(c)
In alternative, if reliefs sought under para (a) and (b) above are
not granted, then to direct and allow that the Petitioners shall
be entitled to claim „Change in Law‟ against the Respondent‟s
claim on the basis of withdrawal of fiscal benefits which were
available to the Project under the FTP on the date of bidding on
standalone basis, without considering Mega Policy, 2009 ;
(d)
award cost in favour of the Petitioners ;
8
(e)
pass such other and further
Commission
may
deem
orders / directions as the
appropriate
in
the
facts
and
circumstances of the case.
5.
PSPCL filed reply to the petition vide C.E./ARR & TR memo No.5613
dated 25.07.2012 and submitted that there was no merit in the petition. Brief
submissions of PSPCL were as under:(i)
Cut-off date of bid was 02.10.2009. Notification for Mega Power
Policy, 2009 under which the Project got status as MPP was
issued by
Ministry of Power, Government of India
on
11.12.2009. The fiscal benefits of Mega Power status was not
available on the cut-off date and therefore „Change in Law‟
claim is required to be passed on to PSPCL by way of reduction
in tariff benefiting the consumers at large.
(ii)
PSPCL submitted that the petitioners claim that such „Change
in Law‟ had occurred prior to cut off date on account of Press
Release by PIB dated 01.10.2009, a day before cut off date of
bid and was accounted for in the bid by the petitioner No.2, was
wrong. After statutory Notification was issued on 11.12.2009
when terms and conditions for grant of Mega Power status were
notified, the other notifications giving reduction and remissions
from duties were issued subsequently.
Each of above were
much after the cut off date for bids (i.e.
2.10.2009) hence
benefits under „Change in Law‟ under Article 13 of PPA, were
required to be
passed on
to
PSPCL, by way of
tariff
reduction. As per Notification dated 11.12.2009, a number of
conditions were required to be fulfilled by Govt. of Punjab so as
to make a non-MPP eligible for MPP status under Mega Power
Policy, 2009, These conditions were fulfilled by Government of
Punjab only on 16.4.2010 by unbundling of erstwhile PSEB into
PSPCL and PSTCL. At the time of issue of bid documents and
submission of bids, the proposed Project was under prevalent
legal framework for concessions and
incentives under Mega
9
Power Policy, 2006. Bids were submitted by bidders including
petitioner No.2 on 09.10.2009 when the prevalent policy of
Government of India was Mega Power Policy 2006, notified on
02.08.2006, which
did not recognize the Project of the kind
which was subject matter of the bid to be a Mega Power Project
(MPP).
(iii)
„Law‟ is defined in the PPA as „all Laws including Electricity
Laws in force in India and any statute, ordinance, regulation,
notification or code or rule or any interpretation of any of them
by an Indian Government Instrumentality‟. Clearly „Change in
Law‟ would occur through change in any of these. The press
release by the Government providing for the proposal to amend
Mega Power Policy is not law within the meaning of definition of
law given in PPA. Press release does not even mention the
terms and conditions for Mega Power status. Subsequent to
press
release
dated
01.10.2009
Govt.
of
India
issued
Memorandum dated 14.11.2009 and circulated the same ;
various conditions to be fulfilled, the process to be adopted and
details to claim the
benefits of
Mega Power Policy were
provided for in the Memorandum. Thereupon the Government
of India issued a communication dated 03.12.2009 to all States
and U.Ts specifying the Distribution Reforms required to be
undertaken in order for a generating company selling power to
the State to be eligible for MPP status.
(iv)
The Customs Notification under Section 25 of the Customs Act,
1962
was issued by Govt. of India on 11.12.2009. Only this
Notification has the force of Law. Even on this date Project was
not eligible for benefits under the notified Policy, as the requisite
Distribution reforms which was condition to be fulfilled had not
been yet carried out by the State of Punjab. This condition was
fulfilled through Govt. of Punjab Notification of the Transfer
Scheme Rules, 2010 dated 16.04.2010 under Section 131 of the
10
Electricity Act, 2003, unbundling the erstwhile PSEB into PSPCL
and PSTCL.
(v)
Only after this, petitioner No.1 submitted application dated
11.05.2010 to Ministry of Power, GoI, for granting MPP status
to the Project. Thereafter MPP status was granted by Govt. of
India to the Project on 30.07.2010. As such „Change in Law‟
occurred much later after cut off date of 2.10.2009 (seven days
before last day of submission of bids) under Article 13 of PPA.
(vi)
PSPCL has further submitted that contention of the petitioners
that under Foreign Trade Policy 2009-2014 identical benefits
were available under law de-hors the Mega Power Policy, which
were withdrawn vide clarifications by PIC dated 15.03.2011 and
clarification dated 28.12.2011 issued by the Director General of
Foreign Trade (DGFT) was baseless and misconceived. In the
Policy Interpretation Committee
(PIC) meeting held on
15.03.2011, it was clarified that under FTP 2009-14, the benefits
of refund of Terminal Excise Duty (TED) were not available to
non-Mega Power Projects. The communication of DGFT dated
27/28.04.2011 states as under :“(iii)
Regarding refund of Terminal Excise Duty (TED)
for supplies to non-mega power projects, it was
clarified that para 8.4.4 (iv) of Foreign Trade
Policy, 2009-14 clearly stipulates that benefits of
refund of TED under para 8.3 (c) of the policy is
not available for such supplies. In such cases
excise duty paid at the terminal stage of supply
(last instance of excise duty paid in the chain of
manufacture process in supply) is not to be
refunded in any manner including as drawback
[para 8.3 (b) of Policy]”.
The clarificatory nature of the circular dated 27/28.04.2011 of the
DGFT is evident from para 3 of the same. The reliance of the
11
petitioners on a clarificatory policy circular issued by DGFT to
contend that benefits were earlier available to non-Mega power
placed is totally misplaced.
(vii)
PSPCL denied that the Cabinet Meeting decision and its press
release by PIB on 01.10.2009 by itself amounted to „Change in
Law‟ and Mega Power Policy stood amended on that date.
(viii)
PSPCL submitted in its reply that in view of circumstances
explained in the reply, there was no merit in the petition and
same was liable to be dismissed with exemplary costs. The
respondent, PSPCL, was entitled to the benefits of the Mega
Power Policy being granted to the petitioner No.1, by way of
„Change in Law‟ under Article 13 of the PPA dated 18.1.2010.
6.
(i)
The petitioners filed rejoinder to the reply of the respondent
(PSPCL) vide Reference dated 07.09.2012 and inter-alia
submitted that the powers vested in Govt. of India (GoI) are
exercised by the Union Cabinet through various fiscal policy
formulations such as Mega Power Policy. In case goods are
meant for use in development of particular class of
Power
Projects such as Mega Power Project (MPP), the exercise of
power takes the shape of policy. Once the Mega Power policy
was formulated / amended by the Union Cabinet, the issuance
of consequent notifications under respective Acts to carry out
the mandate of the Mega Power Policy by providing necessary
exemptions / remissions for MPPs,
was only a ministerial job.
Once the Union Cabinet had taken up the decision to approve
modifications and adopt changes in the then existing Mega
Power Policy 2006 on 01.10.2009, the concerned ministries
were bound by that decision and were inevitably required to
effect that decision of the Union Cabinet being final authority to
approve changes. Hence the decision modifying policy so as to
allow projects supplying power to only one State to get all fiscal
benefits taken by the Union Cabinet provided sufficient legal
12
basis for the petitioner No.2 to arrive
at a conclusion that
project shall be eligible for benefits under such modifications in
the Mega power policy. As per the petitioners „adoption‟ of law
is included in term „Change in Law‟ under Article 13.1.1 of the
PPA. The petitioners have submitted decision of Union Cabinet
amounts to adoption of the changes / modifications.
The
petitioners have further submitted in the rejoinder that PSPCL
can not rely on issuance of subsequent instruments to raise
„Change in Law‟ claim since the situation brought into effect by
these subsequent instruments such as notifications by the
Ministries had not altered the legal position. The petitioner No.2
considering the eligibility for exemption available to a MPP in
view of Union Cabinet decision dated 01.10.2009 had factored
in the available benefits under Mega Policy
2009 while
submitting its bid and as such the benefits available to a MPP
had already been passed on to the respondent in the form of
lowest tariff in the bid by the petitioner No.2. RFP provided that
the bidders are required to familiarize with all the acts, laws,
rules and regulations prevailing at the time of bid. The petitioner
No.2 was, therefore, fully justified in taking cognizance of the
decision of the Union Cabinet before submission of the bid.
(ii)
As
regards the availability of benefits under Foreign Trade
Policy (FTP), the petitioner has submitted again in the rejoinder
that identical benefits were available to the Project on the date
of bidding irrespective of the fact whether the Project was a
MPP or non-MPP and the
petitioner No.2 considered the
benefits from the perspective of Mega Power Policy, 2009 The
petitioners have submitted that
benefits available under FTP
were withdrawn after submission of bids by DGFT.
The
petitioners submitted at the first place no benefits have to be
passed on to PSPCL under Article 13 of the PPA as the change
in Mega Power Policy, 2006, took place on 01.10.2009, 8 days
prior to bid deadline ; however, if it is to be held that change in
13
policy amounts to „Change in Law‟ under PPA, then in view of
FTP regime prevailing prior to the submission of bids, there
was no economic impact due to „Change in Law‟. On account
of withdrawal of benefits under FTP, the petitioners have also a
similar claim under „Change in Law‟ as per Article 13 of the
PPA. In the rest of the rejoinder the petitioners have made
submissions in respect of FTP to establish that the fiscal
benefits to the non-MPPs such as this Project were available.
7.
The arguments on behalf of the petitioners and respondent were heard
in detail on 11.09.2012 and after hearing the arguments, both parties were
directed to submit written submissions by 26.09.2012 vide
Order dated
13.09.2012. With regard to Mega Power Policy the petitioners filed written
submissions
vide
Ref:
NPL/PSERC/30/005
dated
26.09.2012.
The
petitioners supported their contention that Union Cabinet decision to amend
Mega Power Policy was conclusive in itself by citing decisions of Hon‟ble
Supreme Court in case of Rai Sahib Ram Jawaya Kapoor and others Vs.
State of Punjab (1955) 2 SCR 225 and R.K.Jain Versus Union of India and
others (1993) 4 SCC 119. They further relied upon the decision of the
Division Bench of the High Court of Gauhati in the case of Union of India
and Ors V. Shree Ganapati Rolling Mills (P) Ltd. and Ors 2006 (4) GLTI,
decision of Hon‟ble Punjab and Haryana High Court in Nestle India Limited
and Anr. Vs State of Punjab and Ors (1998) 120 PLR 367 and Hon‟ble
Supreme Court decision in the case of State of Bihar and Ors V. Suprabhat
Steel Ltd. and Ors. (1999) 1SCC 31 and decision in the case of State of
Jharkhand v. Tata Commins Ltd. and Anr., (2006) 4SCC 57.
8
(i)
PSPCL filed written submissions dated 01.10.2012. PSPCL
reiterated that the project of the petitioners became entitled to
the mega power status only under and after the notification
dated 11.12.2009 of Ministry of Power, Govt. of India well after
dead line for submission of the bids under the bidding
documents
issued
by
erstwhile
PSEB
(now
PSPCL).
14
Respondent PSPCL gave the detail of dates of each event in
chronological order to establish their contention that MPP status
to the Project was granted on later date much after the last date
for submission of bids. PSPCL submitted that the petitioners
made no representation during process of bidding that they
would be entitled to Mega Power status as per revised decision
of Union Cabinet and Press Release dated 01.10.2009.
(ii)
PSPCL also submitted that alternative claim de-hors the Mega
Power Policy under Foreign Trade Policy (FTP) which according
to petitioners was subsequently withdrawn vide PIC clarification
dated 15.03.2011 and DGFT clarification dated 27/28.12.2011
and hence they were entitled to benefits under „Change in Law‟
was baseless and misconceived. PSPCL submitted that as per
clause 8.2, sub-clauses (d), (e), (f) and (g) and clause 8.3 –
sub-clauses (a), (b) and (c) and clause 8.4.4(i)(f) and clause
8.4. 4 (iv), taken together, it was clear that
benefits of
exemption from terminal excise duty (TED) was available only
to the Mega Power Projects and not to the non- Mega Power
Projects. At the time of submission of bids, the petitioners „
project admittedly was not a Mega Power Project and also did
not fulfill the conditions entitling it to the benefits under FTP.
PSPCL submitted in its written submissions dated 01.10.2012
that there was no merit whatsoever in the present petition filed
by the petitioners and the same was liable to be dismissed with
exemplary
costs.
The
respondent
and
consequently
consumers in the State were entitled to the benefits of „Change
in Law‟ namely the Mega Power Project status available to the
petitioners‟ Power Project.
9.
The matter was further argued by the counsels on behalf of the
petitioners and respondent. The counsel for the petitioners filed a copy
of the Judgement dated 30.06.2006 of the High Court of Gauhati in the
case of Union of India and Others Versus Shri Ganpat Rolling Mills (P) Ltd.
15
and Others. A compilation consisting of a copy of chapter 8 (Deemed
Exports) of Handbook of Procedure (Vol 1), copy of one of the Refund
Orders, copy of Minutes of Meeting dated 15.03.2011 of Policy
Interpretation Committee (PIC), copy of DGFT letter dated 27/28.04.2011,
DGFT amendment Notification dated 28.12.2011 and DGFT Notification
dated 21.03.2012 was filed. Counsel for the respondent filed copy of
Judgement dated March 12, 2003 in Civil Appeal No.5982 of 2001 in the
case of J.P.Bansal versus State of Rajasthan and Another in support of
arguments on behalf of respondent. After arguing the case at length on
03.10.2012, the Counsels of the petitioners and respondent submitted that
they would file supplementary written submissions in addition to the written
submissions already filed by them. The Commission vide Order dated
08.10.2012 directed that Comprehensive Written Submissions shall be filed
by the petitioners and respondent by 15.10.2012.
10.
Comprehensive Written Submissions were filed by respondent vide
C.E./Thermal Designs memo No.6773 dated 15.10.2012. After re-iterating
the written submissions dated 01.10.2012 already filed by respondent, it
was further submitted that Section 25(1) of the Custom‟s Act, 1962,
contemplate issuance of specific notification and its publication in the official
Gazette of GoI as the mode for bringing into effect any exemption. In the
present case the notification having been published only on 11.12.2009,
there can be no question of the petitioners claiming any amendment to the
law and any benefit of Customs duty exemption being available under the
law at any time prior to 11.12.2009. The respondent relied upon the
decisions of Hon‟ble Supreme Court in the following cases :
a.
Gujrat Urja Vikas Nigam Limited v. Essar Power Limited (2008)
4 SCC 755.
b.
B.K.Srinivasan v. State of Karnatka (1987) 1SCC 658.
c.
J.P.Bansal v. State of Rajasthan and Another, (2003) 5SCC
134
d.
Bimla Nand Prasad and Others v. State of Bihar & Others 1994
Supp (3) SCC 753.
16
PSPCL further submitted in the Comprehensive Written Submissions
that reliance of the petitioners on the Judgment of Hon‟ble High Court of
Guwahati in Union of India v. Shri Ganpat Rolling Mlls Pvt Limited (2006) 3
GLR 586 does not help the case of the petitioners as the Judgement deal
with a
case of
Promissory Estoppel and
equitable relief stands on
different considerations. PSPCL submitted with regard to applicability of
FTP that the very fact that the petitioners actually claimed benefits under
Mega Power Policy and not under FTP, which according to the petitioners
was in existence prior to the bidding, establishes beyond doubt that
alternate plea under FTP was an after-thought.
PSPCL re-iterated that
PSPCL and consequently consumers of the State are entitled to benefits
under Mega Power Policy, 2009.
11.
The petitioners filed written submissions vide NPL/PSERC/30/007
dated 15.10.2012 and maintained that Union Cabinet‟s Policy decision to
modify Mega Policy 2006 was conclusive and actionable. The petitioners
quoted from Press Information Bureau Manual issued under Right to
Information Act, 2005 regarding sanctity
of the reporting done by PIB,
considering which the petitioner No.2 had all the reasons to have acted
upon the
Union Cabinet‟s policy
decision dated
01.10.2009.
The
petitioners in the written submissions dated 15.10.2012 cited number of
Judgements giving gist of Facts and Judgements of the cases to advance
their arguments.
The
petitioners emphasis remained that
Notification
issued pursuant to an actionable policy decision can not go against such
policy decision.
However if such Notification
is contrary to the policy
decision, same is liable to be set aside.
The petitioner re-iterated that identical benefits were available to the
Project under Mega Power Policy and Foreign Trade Policy.
After considering the written submissions filed by the petitioners and
respondent, the Commission decided to close further hearing of the petition
vide Order dated 01.11.2012. The Order was reserved.
17
12.
After going through the petition, reply, rejoinder, written submissions
and arguments filed by the petitioners and the respondent and hearing the
parties on their respective submissions, the Commission, with regard to the
prayer of the petitioners, proceeds to give its observations, findings and
decision in the matter hereunder:
Prayer:
The petitioners have prayed as under:
(a) declare that the decision of the Union Cabinet dated 01.10.2009
modifying the Mega Power Policy 2006 reported vide Press Information
Bureau on the same date does not amount to „Change in Law‟ under
Article 13 of the PPA;
(b) following the declaratory relief sought by the petitioners, hold that
consequential relief as set out under Article 13.2 of the PPA has not
triggered and no consequential benefits under Article 13 have to be
passed on to the respondent by the petitioner under the PPA on
account of Union Cabinet‟s decision dated 01.10.2009 to change the
Mega Power Policy 2006;
(c) in alternative, if reliefs sought under para (i) and (ii) above are not
granted, then to direct and allow that the petitioners shall be entitled to
claim „Change in Law‟ against the respondent‟s claim on the basis of
withdrawal of fiscal benefits which were available to the Project under
the Foreign Trade Policy on the date of bidding on standalone basis,
without considering Mega Power Policy, 2009;
(d) award cost in favour of the petitioners;
(e) pass such other and further order/directions as the Commission may
deem appropriate in the facts and circumstances of the case.
13.
Mega Power Policy
Observations:
i) The erstwhile PSEB (predecessor of the respondent) intending to
procure power through competitive bidding under section 63 of the
Electricity Act, 2003 and the “Guidelines for Determination of Tariff by
Bidding Process for Procurement of Power by Distribution Licensees”,
18
issued by the Ministry of Power, Government of India in 2005 decided
to invite bids (under Case-2) from power project developers for setting
up the Project (2x700MW) at village Nalash near Rajpura Distt. Patiala,
Punjab. In terms of the Guidelines, the PSEB incorporated a special
purpose vehicle (SPV) in the name of Nabha Power Ltd. (NPL) to act
as its authorised representative for carrying out pre-bid activities on
behalf of PSEB in relation to the Project. Accordingly, on 10.6.2009,
NPL on behalf of PSEB issued Request for Qualification (RfQ) and
Request for Proposal (RfP) for selection of a developer through Tariff
based competitive bidding process for procurement of power on long
term basis from the above Project.
ii) Pursuant to the bid process, petitioner no. 2 was selected as the
successful bidder and on acquisition of the SPV NPL by it as per the
RfP, the PPA was signed on 18.01.2010 between NPL, as the Seller,
on behalf of petitioner no. 2 and the then PSEB, as the Procurer.
iii) As per the petitioners, while preparing the bid for the Project, the
petitioner no.2 considered various fiscal benefits and concessions
available to an entity executing a thermal power project of capacity
above 1000 MW. Two policies regimes i.e. the Foreign Trade Policy,
2009-2014 and the Mega Power Policy, 2009 were stated to be in
vogue at the time of bidding which provided for various benefits for a
Project of this nature.
iv) As per the pleadings, the petitioner no.2 took note of the
announcement made in press release of the Press Information Bureau,
Govt. of India on 01.10.2009 under the heading „Modifications to the
Mega Power Policy‟ (Annexure-P/1 of the petition) with respect to the
modifications approved by the Union Cabinet on that day. Perusal of
the same indicates that the said modifications were with regard to the
Mega Power Policy introduced in November 1995 for providing impetus
to development of large size power projects in the country which had
earlier been modified in 1998 and 2002 and last amended in April,
2006 to rationalise the same to bring it in consonance with the National
19
Electricity Policy 2005 and Tariff Policy 2006. The following
modifications were envisaged:
(a) The existing condition of privatization of distribution by power
purchasing states would be replaced by the condition that power
purchasing states shall undertake to carry out distribution reforms
as laid down by the Ministry of Power.
(b) The conditions requiring inter-state sale of power for getting mega
power status would be removed.
(c) The present dispensation of 15% price preference available to the
domestic bidders in case of cost plus projects of PSUs would
continue. However, the price preference will not apply to tariff based
competitively bid projects of PSUs. A Committee would be set up
under the Planning Commission, with DHI, MoP and DoR as
members which would suggest options and modalities to take care
of the disadvantages suffered by the domestic industry related to
power sector keeping all factors in view.
(d) The benefits of Mega Power Policy will also be extended to
supercritical projects to be awarded through ICB with the mandatory
condition of setting up indigenous manufacturing facility provided
they meet the eligibility criteria.
(e) The requirement of undertaking international competitive bidding
(ICB) by the developers for procurement of equipment for mega
power projects would not be mandatory, if the requisite quantum of
power has been tied up through tariff based competitive bidding or
the project has been awarded through tariff based competitive
bidding.
(f) A basic custom duty of 2.5% only would be applicable on brown
field expansion of existing mega projects. All other benefits under
mega power policy available to Greenfield projects would also be
available to expansion unit(s) (brownfield projects) even if the total
capacity of expansion unit(s) is less than the threshold qualifying
capacity, provided the size of the unit(s) is not less than that
provided in the earlier phase of the project granted mega power
project certificate. All other conditions for grant of the mega power
status shall remain the same.
(g) Mega Power Projects would be required to tie up power supply to
the distribution companies/utilities through long term PPA(s) and
may also sell power outside long term PPA(s) in accordance with
the National Electricity Policy 2005 and Tariff Policy 2006 of
Government of India, (as amended from time to time)..
20
v) The petitioner no.2 vide its letter dated 02.10.2009 (Annexure P/2 of
the
petition)
while
intimating
the
Procurer
regarding
recent
development on Mega Power Policy requested to extend the bid
deadline by one month, to enable it to go through the changes and
ascertain the impact on the bid, to give a level playing field to all
bidders. Further vide letter dated 06.10.2009, the petitioner no.2
informed the Procurer that, in view of the modifications in the Mega
Power Policy announced on 01.10.2009 in respect of scrapping of the
conditions with regard to (i) the Projects (with Mega Power Status)
requiring the sale of electricity to more than one State and (ii) the
States purchasing power from such Projects not required to privatize
distribution sector, it has taken into consideration, the benefits
associated with the Mega Power Status in its evaluation of the Project.
As per the petition, the letter dated 06.10.2009 was withdrawn by the
petitioner no.2 at the instance of the Procurer who informed that the
said letter was extraneous to the requirements of the bid documents
and hence would not be entertained.
vi) Vide letter dated 03.12.2009 (Annexure A of PSPCL‟s reply dated
25.07.2012), the Ministry of Power, Government of India notified to all
the States and Union Territories, the Distribution Reforms required
under the modified Mega Power Policy. The condition specified by the
Ministry of Power inter alia, included
(a) timely release of subsidy as per Section 65 of the Electricity Act
2003.
(b) ensure that Discoms (Distribution companies) approach the State
Electricity Regulatory Commissions for approval of annual revenue
requirement/tariff
determination
in
time
according
to
the
Regulations.
(c) setting up special courts as provided in the Electricity Act, 2003 to
tackle theft related cases.
(d) ring fencing of State Load Despatch Centres.
21
vii) The Ministry of Power, issued the Office Memorandum No. A118/2003-IPC dated 14.12.2009 (Annexure P/5 of the petition) in this
regard stating
“Policy guidelines for setting up of mega power projects were last
revised and issued vide this Ministry‟s letter of even number dated
2nd August, 2006. The Government of India has modified the Mega
Power Policy to smoothen the procedures further. The modified
Mega Power Policy is as follows:
(i)The power projects with the following threshold capacity shall
be eligible for the benefit of mega power policy:
(a) A thermal power plant of capacity 1000 MW or more; or
…………….
(ii) Mandatory condition of Inter-State sale of power for getting
mega power status has been removed.
(iii)Goods required for setting up a mega power project, would
qualify for the fiscal benefits after it is certified by an officer
not below the rank of a Joint Secretary to the Govt. of India in
the Ministry of Power that (i) the power purchasing States
have constituted the Regulatory Commissions with full powers
to fix tariffs and (ii) power purchasing states shall undertake to
carry out distribution reforms as laid down by Ministry of
Power.
(iv) Mega Power Projects would be required to tie up power
supply to the distribution companies/utilities through long term
PPA(s) in accordance with the National Electricity Policy 2005
and Tariff Policy 2006, as amended from time to time, of
Government of India.
(v) There shall be no further requirement of ICB for procurement
of equipment for mega projects if the requisite quantum of
power has been tied up or the project has been awarded
through tariff based competitive bidding as the requirements
of ICB for the purpose of availing deemed export benefits
under Chapter 8 of the Foreign Trade Policy would be
presumed to have been satisfied. In all other cases, ICB for
equipments shall be mandatory.
(vi)The present dispensation of 15% price preference available to
the domestic bidders in case of cost plus projects of PSUs
would continue. However, the price preference will not apply
to tariff based competitively bid project/s of PSUs.
…………”
22
viii) As per the petition, Department of Revenue, Ministry of Finance, Govt.
of India, in order to implement the decision of the Union Cabinet, while
exercising the power under section 25 of the Customs Act, 1962 vide
its Notification No. 137/2009-Customs dated 11.12.2009 (Annexure P/4
of the petition) amended its Notification No.21/2002-Customs dated
01.03.2002 in respect of Entry at S. No. 400 of the Table which was
substituted as “Goods required for setting up of any Mega Power
Project, so certified by an officer not below the rank of a Joint Secretary
to the Government of India in the Ministry of Power, that is to say(a)
a thermal power plant of a capacity of 700 MW or more, located
in the States of Jammu & Kashmir, Sikkim, Arunachal Pradesh,
Assam, Meghalaya, Manipur, Mizoram, Nagaland and Tripura; or
(b)
a thermal power plant of a capacity of 1000 MW or more,
located in States other than those specified in clause (a) above; or
……………….”
Further in the Annexure, in Condition no. 86, for sub-clause (ii) of
clause (a), the following was substituted:
“(ii) the power purchasing states shall undertake to carry out
distribution reforms as laid down by Ministry of Power.”
ix) The Government of Punjab, by virtue of Notification dated 16.04.2010
(Annexure-B of the respondent‟s reply dated 25.07.2012) unbundled
the erstwhile Punjab State Electricity Board into separate companies
including the respondent PSPCL under Section 131 of the Electricity
Act, 2003.
x) On 30.04.2010, the Department of Power, Government of Punjab
informed Ministry of Power, Government of India in regard to the
distribution reforms undertaken, as laid down by the Ministry of Power
in its communication dated 03.12.2009.
xi) The petitioner no.1 vide letter dated 11.05.2010 (Annexure-C of the
respondent‟s reply dated 25.07.2012) applied for grant for Mega Power
Status for the 2x700MW Rajpura Thermal Power Project to the Ministry
of Power, GOI and while providing all the details of the Project stated
23
“We eagerly look forward to the issuance of Mega Power Status for the
Project at the earliest.”
xii) In response to the application of NPL dated 11.05.2010, the Ministry of
Power,
vide
its
letter
dated
30.07.2010
(Annexure-D
of
the
respondent‟s reply dated 25.07.2012) forwarded the mega status
certificate for the said Project. The certificate dated 30.07.2010, issued
on the basis of PPA dated 18.01.2010 and undertaking from the State
Government that they would carry out the distribution reforms
measures in accordance with Govt. of India‟s letter no. A-118/2003IPC(Vol.II) dated 03.12.2009, certifies that (a) the Project is a thermal
power plant of capacity 1400(2x700MW) and (b) the power purchasing
States have constituted the Regulatory Commissions with full powers
to fix Tariff and shall undertake to carry out distribution reforms as laid
down by Ministry of Power.
xiii)The
petitioner
no.1
vide
its
letter
NPL/CE/PSPCL/022
dated
23.05.2011(Annexure P/19 of the petition) submitted the undertaking to
pass on the fiscal benefits attached to the mega power status with
regard to exemption of Customs duties to the respondent as per
provisions of the PPA due to Change in Law (i.e. grant of aforesaid
mega status) as desired by respondent as a pre-condition for
recommending to the Government of Punjab for granting „Essentiality
Certificate‟ required for clearance of capital goods for the Project at
concessional duty. It has been stated that the said undertaking was
given by petitioner no.1 under protest and without prejudice to its legal
rights and contentions.
xiv)The Secretary to Government of Punjab, Department of Power, vide its
letter no. 10/5/2011-PE2/2238 dated 16.06.2011(Annexure P/23 of the
petition) addressed to the Commissioner of Customs recommended
for allowing duty concessions as admissible for import of goods
required for the Project. In the endorsement to the said letter
addressed to the petitioner no. 1, it was informed that the
recommendation for the concessional duties has been made subject to
PSPCL‟s right for the appropriate decrease in tariff on account of
24
reduction in the capital cost of the Project due to concessional
Customs duties in term of Article 13 of the PPA. The said letter was
further endorsed to the respondent for taking necessary action as per
provisions in the PPA with respect to Change in Law.
xv) The petitioner no.1 vide its letter dated 23.11.2011 (Annexure P/32 of
the petition) again submitted a similar undertaking for the goods to be
imported in the second round as required by the respondent.
Subsequently, the Secretary to Government of Punjab, Department of
Power,
vide
its
13.12.2011(Annexure
Commissioner
of
letter
P/33
no.
of
Customs
the
10/5/2011-PE2/4116
petition)
recommended
addressed
for
dated
to
allowing
the
duty
concessions as admissible for import of goods required for the Project.
Again, in the endorsement to the said letter addressed to the petitioner
no. 1, it was informed that the recommendation for the concessional
duties has been made subject to PSPCL‟s right for the appropriate
decrease in tariff on account of reduction in the capital cost of the
Project due to concessional Customs duties in term of Article 13 of the
PPA. Also, the said letter was further endorsed to the respondent for
taking necessary action as per provisions in the PPA with respect to
Change in Law.
14.
Findings:
The contention of the petitioners is that Article 13 of the PPA executed
between the petitioner no.1 and the respondent dealing with Change in Law
has no application in the present case as the amendment to the Mega Power
Policy was announced by the Union Cabinet in the press release dated
01.10.2009.
However, The contention of the respondent is that the Change in Law
in the form of amendment to the Mega Power Policy came into force not on
the date of the press release on 01.10.2009 but much after the cut-off date of
02.10.2009, being 7 days prior to date for submission of bids i.e. 09.10.2009
and therefore, Article 13 applies to the respondent for getting the benefit
accruing due to concessional duties etc.
25
Considering the aforementioned observations, the Commission finds
that irrespective of the difference in opinion regarding the date of availability of
the Mega Power Status to the Project under the Mega Power Policy of the
Ministry of Power, Government of India i.e. date of the decision of the Union
Cabinet (01.10.2009) or the date of the notification(s) by Government of India,
through Ministry of Power dated 14.12.2009 and Ministry of Finance dated
11.12.2009, the Mega Power Status was to be made available to the Project
subject to, the State in which the Project was being set up, undertaking the
reforms intimated vide Ministry of Power‟s letter dated 03.12.2009. The
Commission notes that the same were undertaken by the Government of
Punjab on 16.04.2010 and intimated to the Central Government vide its letter
dated 30.04.2012. The Commission further notes that the respondent no.1,
thereafter, made an application, vide its letter dated 11.05.2010, to the
Ministry of Power specifically informing that as per its understanding, the
Government of Punjab vide letter dated 30.04.2010 has fulfilled the conditions
required in respect of carrying out the necessary reforms for enabling a
Project being set up in the State for grant of Mega Power Status and has
carried out the requisite reforms, and therefore, the Project is eligible for grant
of Mega Power Status, which was granted by the Ministry on 30.07.2010. This
clearly establishes that the Project became eligible for grant of Mega Power
Status and acquired the same only after the State Government carried out the
requisite reforms and thereafter the Mega Power Status was granted to the
Project. The grant of Mega Power Status under the Mega Power Policy was
contingent upon the concerned State carrying out the reforms which was done
by the Government of Punjab on 16.04.2010. Rightly so, the petitioner no.1,
applied for the Mega Power Status on 11.05.2010 i.e. after the date of reforms
carried out by the Government of Punjab on 16.04.2010 and not immediately
after the decision of Union Cabinet on 01.10.2009 or the notifications of the
Ministry of Finance dated 11.12.2009 and Ministry of Power dated
14.12.2009. Even the recommendations by the Government of Punjab to the
Customs authorities for custom duties concession/exemption, in view of the
Mega Power Status of the Project, were subject to PSPCL‟s right for
appropriate decrease in Tariff on account of reduced capital cost of the
26
Project in terms of Article 13 of the PPA with respect to provision of Change in
Law. Furthermore, the Commission is of the view that the benefit of Mega
Power Status can not be granted w.e.f. 01.10.2009 considering that it is only
after the gazette notification that public at large is informed of the decisions of
the Government. As submitted by the respondent, the Commission notes that
all the detailing in respect of the amendment in the Mega Power Policy was
not available in the press release dated 01.10.2009. The same was covered
in the letter dated 03.12.2009 of the Ministry of Power to the States and in the
notification of the Ministry of Power dated 14.12.2009. The Commission also
notes the submission of the respondent that the press release itself provided
for the disclaimer that though all efforts have been made to ensure the
accuracy and currency of the content on the website of the Press Information
Bureau, Government of India, the same should not be construed as a
statement of Law or used for any legal purposes. Also, the Commission notes
that as submitted by the respondent, Section 25 of the Customs Act, 1962
provides that, unless otherwise provided, every notification issued under subsection(1) or (2A) shall come into force on the date of its issue by the Central
Government for publication in the Official Gazette.
In view of the above findings, the Commission holds that since the
Mega Power Status was granted to the Project under the Mega Power Policy
by the Ministry of Power on 30.07.2010 on the application dated 11.05.2010
filed by the respondent no.1, having become eligible on 16.04.2010, the
benefits, if any, accruing thereunder to the Project would be applicable only
from 30.07.2010 and not from any prior date, notwithstanding that the
decision for granting the Mega Power Status was taken/announced on
01.10.2009 or the notifications in respect of the said decision of the Union
Cabinet were issued by the concerned Ministries of the Government of India
on 11.12.2009 and 14.12.2009. Accordingly, the Commission is unable to
grant the aforementioned prayers (a) and (b) in this petition.
15.
Foreign Trade policy
Observations and Findings:
With regard to the aforementioned prayer (c) in this petition, the
Commission notes that the petitioners have stated that before 01.10.2009, the
27
petitioner no.2 was considering fiscal benefits available to the Project under
the Foreign Trade Policy (FTP). It has been submitted that pursuant to the
revision in the Mega Power Policy 2006 by the Union Cabinet on 01.10.2009,
the petitioner no.2 considered the benefits available to the Project from the
prospective of this Policy since the benefits were identical to that under the
FTP. The petitioners have further submitted that without prejudice, if in terms
of the PPA, the change in the Mega Power Policy amounts to Change in Law,
in view of the prevailing FTP prior to the submission of the bids, there is no
economic impact on account of such Change in Law as the benefits under the
FTP would in any case be available to the Project regardless of the status of
Mega Power Project. The petitioners have further submitted that the benefits
under the FTP which were available to the Project at the time of bidding,
irrespective of it being having the Mega Power Status have since been
withdrawn by the relevant authorities of the Government of India. The
petitioners have averred that, therefore, the petitioners have a claim under the
Change in Law provision under Article 13 of PPA for withdrawal of benefits
available to the Project without considering its status under the Mega Power
Policy as on the date of bidding.
16.
The Commission notes that a holistic reading of the relevant extracts of
the Foreign Trade Policy 2009-14 as prevalent at the time of bidding, the
decision of the Policy Interpretation Committee (PIC) dated 15.03.2011 and
subsequent clarifications issued by the Director General of Foreign Trade
(DGFT) vide letter/circular dated 27/28.04.2011 and notifications of the
Ministry of Commerce and Industry dated 28.12.2011 and 21.03.2012 make it
clear that the benefits under FTP were not available to the Project. Probably
for this very reason, the petitioners did not rely upon FTP for claiming the
benefits and opted for the identical benefits purported to be available under
the Mega Power Policy on the date of bidding. The Commission opines that if
the benefits under the FTP were available to the petitioners on the date of
bidding, there was no necessity for the petitioner no.2 to inform the Procurer
vide letter dated 06.09.2009 stating that benefits associated with the Mega
Power Status have also been taken into consideration in its evaluation of the
Project and take further actions to apply and obtain the Mega Power Status as
28
also to request for the essentiality certificate from the Government of Punjab.
Furthermore, the Commission notes that the Mega Power Status was granted
to the Project on 30.07.2010 and the alleged change in the FTP was
announced in 2011. The Commission opines that if the FTP in the year 2010
provided the benefits to the petitioners, there was no occasion for the
petitioner no.1 to claim the benefit under the Mega Power Policy and obtain
the essentiality certificate from the Government of Punjab and claim the
benefit of Customs duty concession/exemption under the notification dated
11.12.2009 of the Government of India. The Commission is of the considered
opinion that the petitioners claiming the benefits under Mega Power Policy
itself sufficiently establishes that the benefits under the FTP were not
applicable to the petitioners‟ Project. Notwithstanding the discussion above,
the Commission is of the opinion that even if it is assumed for the sake of
argument, that benefits were available to the Project under the FTP on the
date of bidding, the petitioners forfeited their right to subsequently claim the
benefits under the FTP by opting out of the same having claimed the benefits
under the Mega Power Policy. Accordingly, the Commission decides that the
prayer (c) of the petitioner also cannot be granted.
The petition is accordingly disposed of without any cost.
Sd/(Gurinderjit Singh)
Member
Sd/(Virinder Singh)
Member
Sd/(Romila Dubey)
Chairperson
Chandigarh
Dated: 12.11.2012
29