CENTRAL ELECTRICITY REGULATORY COMMISSION

NEW DELHI

Petition No. 619/MP/2020

Coram:

Shri Jishnu Barua, Chairperson

Shri I.S. Jha, Member
Shri Arun Goyal, Member
Shri P.K. Singh, Member

Date of Order: 28th June, 2023

In the matter of

Petition under Section 79 of the Electricity Act, 2003 for execution of orders dated
19.12.2017 and 14.3.2018 passed by this Commission in Petition No. 101/MP/2017 and
13/SM/2017 respectively and initiation of proceedings/appropriate action under Section
142 read with Section 149 of the Electricity, Act, 2003 and Regulation 111 of the Central
Electricity Regulatory Commission (Conduct of Business) Regulations, 1999 against
the Respondents for non-compliance of the orders dated 19.12.2017 and 14.3.2018
passed by this Commission in Petition No. 101/MP/2017 and 13/SM/2017 respectively.

And
In the Matter of:

DB Power Limited,
3rd Floor, Naman Corporate Link,
Opp. Dena Bank, C-31, G-Block,
Bandra- Kurla Complex, Bandra (E),
Mumbai- 400051 …... Petitioner

VERSUS
1. Rajasthan Urja Vikas Nigam Limited,
Vidyut Bhawan, Janpat, Jyothi Nagar,
Jaipur-302005

2. The Managing Director,

Rajasthan Urja Vikas Nigam Limited
Vidyut Bhawan, Janpat,
Jyothi Nagar,
Jaipur – 302005

Order in Petition No. 619/MP/2020 Page 1 of 29

3. Jaipur Vidyut Vitran Nigam Limited,
Vidyut Bhawan, Jyothi Nagar,
Near New Vidhan Sabha Bhawan,
Jaipur – 302005

4. The Managing Director

Jaipur Vidyut Vitran Nigam Limited,
Vidyut Bhawan, Jyothi Nagar,
Near New Vidhan Sabha Bhawan,
Jaipur – 302005

5. Ajmer Vidyut Vitran Nigam Limited,

Vidyut Bhawan, Makarwali Road,
Panchsheel Nagar, Ajmer
Rajasthan – 305004

6. The Managing Director

Ajmer Vidyut Vitran Nigam Limited,
Vidyut Bhawan,
Makarwali Road,
Panchsheel Nagar, Ajmer
Rajasthan – 305004

7. Jodhpur Vidyut Vitran Nigam Limited,

New Power House,
Industrial Area,
Jodhpur- 342003

8. The Managing Director

Jodhpur Vidyut Vitran Nigam Limited,
New Power House,
Industrial Area,
Jodhpur- 342003

9. PTC India Limited,

2nd Floor, NBCC Tower,
15, Bhikaji Cama Place,
New Delhi-110066.

10. The Chairman and Managing Director

PTC India Limited
2nd Floor, NBCC Tower,
15, Bhikaji Cama Place, New Delhi 110 066

11. The Vice President (Commercial)

PTC India Limited
2nd Floor, NBCC Tower,

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 15 Bhikaji Cama Place, New Delhi 110 066 …Respondents

Parties present:

Shri Deepak Khurana, Advocate, DBPL

Shri Ashwini Kumar Tak, Advocate, DBPL
Shri Amal Nair, Advocate, Rajasthan Discoms
Ms. Shivani Verma, Advocate, Rajasthan Discoms
Shri Ravi Kishore, Advocate, PTCIL
Shri Keshav Singh, Advocate, PTCIL
Shri Dhruv Tripathi, Advocate, PTCIL

ORDER

The Petitioner, DB Power Limited, has filed the present Petition seeking execution

of the Commission’s orders dated 19.12.2017 and 14.3.2018 in Petition No. 101/MP/2017

(DB Power Ltd. v. PTC Ltd. and Ors.) and Petition No. 13/SM/2017 respectively, and the

initiation of proceedings/appropriate actions against the Respondents under Section 142

read with Section 149 of the Electricity Act, 2003 ('the Act') for non-compliance of the

aforesaid orders. The Petitioner has made the following prayers:

“(a) Direct the Respondents to comply with the Orders dated 19.12.2017 and
14.03.2018 passed in Petition No. 101/MP/2017 and 13/SM/2017 respectively as
regards the claim of service tax / GST on transportation of coal by road and
Auxiliary Consumption as per CERC Tariff Regulations 2019, and to forthwith pay
the pending aggregate amounts to the Petitioner i.e. an amount of Rs.
7,62,33,386/- as set out in paragraphs 20, 30 and 31 along with carrying
cost/interest;

(b) Issue appropriate directions for execution of the Orders dated 19.12.2017 and
14.03.2018 passed in Petition No. 101/MP/2017 and 13/SM/2017 respectively with
respect to payment of service tax /GST on transportation of coal through road as
well as Auxiliary Consumption parameters;

(c) Initiate appropriate action against the Respondents, jointly and severally, under
Section 142 of the Electricity Act, 2003 and/or any other appropriate provision/s of
the Electricity Act, 2003, for contravention and disobedience of the directions
issued by the Commission in Orders dated 19.12.2017 and 14.03.2018 passed in
Petition No. 101/MP/2017 and 13/SM/2017 respectively; and

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 (d) Pass an ad-interim Order directing the Respondents to forthwith discharge
their liability to paying the aforesaid amount of Rs. 7,62,33,386/- to the Petitioner.”

Background

2. The Petitioner, DB Power Limited (DBPL) has set up a 1200 MW coal based

Thermal Power Plant (2 units x 600 MW each) at village Badadarha, Janjgir Champa, in

the State of Chhattisgarh. The Petitioner has entered into an arrangement on a long-term

basis for the supply of power to the Respondents, namely (i) Agreement to sell dated

1.11.2013 between PTC India Limited (PTC) and the Petitioner; (ii) Power Purchase

Agreement (PPA) dated 1.11.2013 between PTC and Respondent Nos. 3 to 5 (‘Rajasthan

Discoms’) for the supply of power from the Petitioner’s Project to Respondent Nos. 3 to

5. The Petitioner had filed the petition No. 101/MP/2017, inter-alia, seeking compensation

on account of the occurrence of Change in law events. The said Petition was decided by

the Commission vide its order dated 19.12.2017 whereby the Commission had allowed

the claims of the Petitioner partly. The Commission has allowed the claim of the Petitioner

for the introduction and enhancement of Service Tax on the transportation of coal by rail

as well as by road. Further, upon promulgation of the GST Act, the service tax on the

transportation of coal was subsumed in GST, and that the Commission vide its order

dated 14.3.2018 in Petition No. 13/SM/2017 had held that the subsuming of taxes/levies

in GST is a Change in Law event. Accordingly, service tax/GST on the transportation of

coal (by rail as well as by road) is a Change in Law event in terms of the Commission’s

orders dated 19.12.2017 and dated 14.3.2018 in Petition No. 101/MP/2017 and Petition

No. 13/SM/2017 and the Respondents are liable to compensate the Petitioner for the

same.

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Submissions of the Petitioner

3. The Petitioner has mainly submitted as under:

(a) In terms of the above orders, on 8.8.2019 the Petitioner issued the
Provisional Supplementary invoices for supply of power to the Respondents
towards the Change in Law claims allowed by the Commission including the claim
of Service Tax/GST on transportation of coal through rail and road along with
requisite certificate/documents. However, Respondent No.1, Rajasthan Urja
Vikas Nigam Limited vide its letters dated 2.9.2019, 12.12.2019 and 28.4.2020
denied the claim of the Petitioner towards service tax/GST on transportation of
coal by road on the basis that the Commission in its order dated 19.12.2017 has
only allowed the Change in Law claim towards Service Tax on transportation of
coal through rail and not by road.

(b) Despite the orders dated 19.12.2017 and dated 14.3.2018, the
Respondents have failed to pay the compensation against the various invoices
raised by the Petitioner towards service tax/GST on transportation of coal through
road for supply of power from 30.11.2016 to 31.5.2020. Therefore, the Petitioner
has been constrained to approach the Commission for execution of the said
orders as regards the claim of service tax / GST on the transportation of coal by
road and for the initiation of proceedings/ appropriate action under Section 142
read with Section 149 of the Act.

(c) Further, in its order dated 19.12.2017, the Commission had determined the
operational parameters for auxiliary consumption for computation of relief in
terms of the Tariff Regulations, 2014, more specifically Regulation 36, which
provided for auxiliary @ 5.25%. However, w.e.f. 1.4.2019, the Commission, in
exercise of its power conferred under Section 178 read with Section 61 of the Act,
notified Tariff Regulations, 2019, whereby at Regulation 49(E), the auxiliary for
coal based generating station of 300 MW and above was specified @ 5.75%.

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 (d) Accordingly, the Petitioner vide its letter dated 30.4.2020 pointed out to the
Respondents that the computation of relief towards Change in Law claims shall
be considering auxiliary consumption @ 5.75% w.e.f. 1.4.2019 in terms of the
Tariff Regulations, 2019. The Petitioner also raised its supplementary invoices for
the claim of differential amount towards impact of increase of the auxiliary power
consumption for the period from April 2019 to March 2020 in terms of the Tariff
Regulations, 2019. However, while the Respondent No. 1 in its letters dated
15.7.2020 and dated 11.8.2020 agreed to clear the invoices based on the
auxiliary consumption of 5.75% from 30.4.2020, it refused to accept similar
invoices for the period prior to 30.4.2020.

(e) The total dues of the Petitioner, which the Respondents have failed to pay
as per the orders dated 19.12.2017 and 14.3.2018 of amount to Rs. 7,62,33,386/-
comprising of Rs. 5,65,83,731/- towards service tax/GST on transportation of coal
through road and Rs. 1,96,49,655/- towards auxiliary consumption.

(f) The Respondents are not inclined to implement the Commission’s orders
dated 19.12.2017 and dated 14.3.2018 in so far as the service tax on
transportation of coal by road and auxiliary consumption as per CERC Tariff
Regulations 2019 are concerned as clear from their conduct of having failed to
pay the pending dues.

(g) The Respondents are clearly guilty of disobedience of the Commission’s

orders dated 19.12.2017 and dated 14.3.2018 and thus are liable to be
proceeded against under Section 142 and Section 149 of the Act. The
Commission may also pass appropriate directions for execution and enforcement
of the said orders.

(h) The Commission vide its order dated 19.12.2017 in Petition No.
101/MP/2017 had disallowed the carrying cost. The Hon’ble Supreme Court in
the case of Uttar Haryan Bijili Vitran Nigam Limited & other Vs. Adani Power
Limited & others [(2019) 5 SCC 325] has held that carrying cost in similar Change
in Law Petitions is payable.

Order in Petition No. 619/MP/2020 Page 6 of 29

Hearing dated 20.4.2021

4. The Petition was admitted on 20.4.2021 and notices were issued to the parties to

complete their respective pleadings. Pursuant to the above direction, replies and

rejoinders have been filed by the Respondent Nos. 1 to 8 (i.e. Rajasthan Discoms) and

the Petitioner respectively.

Reply of Rajasthan Discoms

5. Rajasthan Discoms, in their joint reply dated 19.5.2021, have submitted that

Respondents have already cleared the dues to the Petitioner with respect to auxiliary

consumption parameters, and as on date, there are no dues payable regarding Auxiliary

Consumption. On the issue of Service Tax and GST on the transportation of coal through

road, the Respondents, Rajasthan Discoms have mainly submitted as under:

Service Tax on transportation of Coal by Road

(a) The Commission, in its order dated 19.12.20217 in Petition No.

101/MP/2017 has not considered the claim of the Petitioner with regard to an
increase in service tax on the transportation of coal through road. On the contrary,
the Commission has specifically and expressly allowed the change in service tax
on the transportation of coal through railways. Therefore, without there being a
clear order of the Commission in this regard, no payment can be demanded from
the Respondents on this count.

(b) In relation to the levy of service tax on rail transportation, the Commission
in the impugned order has clearly traced the history of the exemption granted and
thereafter the levy, which is clearly a subsequent event. The service tax on railway
transportation has been made effective from 1.10.2012, vide Notification No.
26/2012-ST dated 20.6.2022. However, in relation to the levy of service tax on road
transportation, the same was never exempted. Transportation of goods through

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 road was included in purview of service tax from 1.1.2005, which were imposed
vide Notifications No. 32 and 35/2004 dated 3.4.2004. Unlike the case of railway
transportation, there was also no exemption granted for the levy of service tax on
road transportation.

(c) The Commission, while deciding the issue, has relied upon its order in
Petition No. 8/MP/2014, wherein again the issue was limited to the claim for a
change in service tax on the transportation of coal through rail only. Thereafter, the
Commission has also expressly held that “the claim of the Petitioner for relief under
Change in Law on account of service tax on transportation of goods by Indian
Railways is admissible”. However, there is no finding in the above order, with
regard to the change in service tax on the transportation of coal through road.

(d) It is a settled principle of interpretation based on the maxim Expressio Unius

Est Exclusio Alterius, which means the express mention of one thing excludes all
other things. Out of two claims, if one has been specifically and expressly allowed,
the only interpretation to be drawn is that the other claim stands rejected.
Otherwise, there was no reason to expressly allow one.

(e) The Petitioner has tried to mislead the Commission by quoting para 83 of
the order. The said paragraph only records the submissions of the Petitioner in the
matter, and does not record any finding of the Commission.

(f) On the other hand, when the Petitioner had raised the issue and the same
was not granted by the Commission, the only remedy open to the Petitioner was
to challenge the said decision. That having not been done, the question of raising
the very same issue in the present Petition does not arise.

Order dated 14.3.2018 in Petition No. 13/SM/2017

(g) In the order of the Commission dated 14.3.2018 in Petition No. 13/SM/2017
there is no mention of any tax on the transportation of coal through road. On the

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 other hand, there is clearly a benefit available to the Petitioner on account of GST
being introduced, on account of the service tax on road transportation, which the
Petitioner has failed to pass on the benefit. Moreover, the understanding of the
Respondents is further fortified by the fact, that the Commission, under the head
“Taxes, duties and cess levied (wherever applicable)”, has only indicated “GST of
5 per cent on transportation of coal by rail”. This was against the Change in Law
benefit earlier granted. Again, GST on the transportation of coal by road has not
been mentioned anywhere, as the same was not to be granted as a Change in
Law. Therefore, it can certainly not be argued by the Petitioner that there is a clear
finding of the Commission on the issue.

(h) In Para 33 of the order dated 14.3.2018 in Petition No. 13/SM/2017, the
Commission has in fact held that the generators had not transparently disclosed
the taxes and duties that were abolished or subsumed. Accordingly, at para 35,
the Commission had directed the details of such taxes introduced/abolished/
subsumed to be worked out between the generators and beneficiaries. In case of
any disputes in this regard, the Commission had granted liberty to the parties to
approach the Commission. The Petitioner has neither filed the present Petition in
terms of the said liberty, nor disclosed the benefit obtained on account of the GST.

(i) At no point of time has the claim of the Petitioner with regard to service tax
and GST on the transportation of coal through road been considered by the
Commission. This being the case, it is unfair on the part of the Petitioner to
approach the Commission by way of a Petition under Section 142 read with Section
149 of the Act.

(j) While the Petitioner had raised a “Provisional Supplementary Invoice” on

8.8.2019 with regard to its claim for Change in Law compensation, the
Respondents vide letter dated 2.9.2019 had objected to the claim for service tax
on transportation of coal through road, as the same has not been specifically
allowed by the Commission.

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 (k) The Petitioner has raised an invoice on 5.12.2019 towards service tax/GST
on the transportation of coal by rail as well as road. Moreover, the invoices had
been raised without any proof of payment and supporting documents. The
Respondents vide letter dated 12.12.2019 communicated to the Petitioner that
apart from its claim being without submission of proof of payment and supporting
documents, the claim for service tax/GST on the transportation of coal through
road was inadmissible. The Respondent in its letter dated 28.4.2020 informed the
Petitioner that since there was no clarity on the issue of clarification regarding
service tax/GST on transportation of coal through road may be sought from the
Commission.

(l) The Respondents are not responsible for the financial position of the
Petitioner, which is more so on account of its mis-management. The Petitioner has
a 1200 MW power plant, out of which only 311MW is supplied to the Respondents.
While more than half of its capacity is being sold to other beneficiaries or is left
stranded, it is not correct on the part of the Petitioner to contend that its financial
stress is on account of the Respondents.

(m) The present Petition being filed under Section 142 read with Section 149 of
the Act, is an abuse of process, and the Commission ought not to allow litigants to
loosely file such Petitions.

Rejoinder of the Petitioner:

6. The Petitioner, in its rejoinder dated 16.7.2021, has mainly submitted as under:

(a) Subsequent to the filing of the Petition, it has received an amount of Rs.
1,36,65,144.37 (Rs. 75,52,777.43 on 22.10.2020 and Rs 61,12,366.94 on
25.2.2021) from the Respondents out of the total invoiced amount of Rs.
1,88,38,861.00 for the period from April 2019 to May 2020. Therefore, the claim
of the Petitioner towards auxiliary consumption has been partly paid, and Rs

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 50,90,200.63 is still outstanding. However, the Respondents have not cleared the
dues of the Petitioner towards auxiliary consumption parameters. The
Respondents have not paid the Late Payment Surcharge (LPS) of Rs.
17,84,585.19 as on 30.6.2021, on the aforesaid claim of auxiliary consumption,
for which the Petitioner has already raised an invoice.

Service Tax on transportation of Coal by Road

(b) The Commission, in para 140 (summary) of the Order dated 19.12.2017 in
Petition No. 101/MP/2017, has clearly and unambiguously allowed the Change
in Law claim, namely, the introduction and enhancement of service tax on
transportation of coal by rail and road.

(c) The issue pertaining to the introduction and enhancement of service tax on
transportation of coal by rail and road, being a Change in Law event, is no more
res integra and the same has been allowed by the Commission in various orders
pertaining to Change in Law Petitions under similar PPAs.

(d) The Notifications dated 17.3.2012, 19.5.2015, 6.11.2015 and 26.5.2016

issued by the Ministry of Finance, Government of India, by way of which Service
Tax on transportation was increased, are not confined to transportation by rail
and are applicable to service tax on transportation by road. Thus, the increase in
service tax on transportation by road is on account of Notifications issued by the
Ministry of Finance, Government of India, and the same qualifies as a Change
in Law event within the meaning of Article 10 of the PPAs dated 1.11.2013, as
held by the Commission. In this regard, as on the cut-off date (11.9.2012) in the
present case, the applicable service tax on transportation by road was 12%.
However, it is an admitted position that, vide i Notification No. 14/2015-ST dated
19.5.2015 issued by the Ministry of Finance, Government of India, the rate of tax
was enhanced from 12% to 14% due to the promulgation of some of the
provisions of the Finance Act, 2015. Further, vide Notification No. 21/2015-ST
dated 6.11.2015 issued by the Ministry of Finance, Government of India, the rate

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 of tax was further enhanced from 14% to 14.5% due to promulgation of provisions
related to the Swachh Bharat Cess on taxable services. Further, vide notification
No. 31/2016-ST dated 26.6.2016 issued by the Ministry of Finance, Government
of India, the rate of service tax increased from 14.5% to 15% due to the
promulgation of provisions related to Krishi Kalyan Cess on taxable services. In
view of the aforementioned, the applicable service tax on transportation by road
has increased from 12% to 15%, on account of the Notifications issued by the
Ministry of Finance, Government of India, and therefore, the aforementioned
increase in the service tax on transportation by road is a Change in Law event as
held by this Commission. In view of the above, the increase in the service tax on
transportation by road is a Change in Law event in terms of the PPA between the
parties.

(e) Reliance placed by the Respondents on the Order dated 1.2.2017 in

Petition No. 8/MP/2014 is erroneous as in the said order, there was neither any
claim for service tax on transportation by road, nor was any finding rendered by
this Commission on the same.

(f) Reliance placed by the Respondents on the principle/ maxim “expressio

unius est exclusio alterius”, is erroneous and misplaced. The above principle is
not applicable or relevant inasmuch as in the Order dated 19.12.2017, the claim
of the Petitioner pertaining to service tax on the transportation of coal by rail as
well as by road has been allowed.

Re: Order dated 14.3.2018 in Petition No. 13/SM/2017

(g) In the order dated 14.3.2018 in Petition No. 13/SM/2017, ‘Service Tax’
forms a part of the list pertaining to taxes and duties subsumed. There is no
segregation of service tax on road and service tax on rail, thereby fortifying that
increases in service tax on rail as well as road are Change in Law events within
the meaning of ‘Change in Law’ Clause under the PPA.

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 (h) As admitted by the Respondents, the list in the Order dated 14.3.2018 is
indicative and not exhaustive. Even as per the Respondent’s own
understanding, the service tax on transportation of coal by road is a Change in
Law event and the same was subsumed later into GST. Thus, even as per the
own averments/ understanding of the Respondents, the contention that there is
no discussion pertaining to service tax on road in the Order dated 14.3.2018, is
wholly misconceived.

(i) Pertinently, on the one hand, the Respondents have contended in the reply
that the increase on service tax for transportation of coal through road is not a
Change in Law event, and thus, the Petitioner is not entitled to any claim towards
the same. However, on the other hand, the Respondents have further contended
in the reply that the Petitioner is liable to pass on the purported benefits on
account of GST (because of the subsuming of service tax on transportation of
coal by road). Thus, the reply of the Respondents is self-contradictory.

Re: Appeal filed on behalf of the Respondents

(j) The Respondents have challenged the Order dated 19.12.2017 passed by
the Commission in Petition No. 101/MP/2017 before the Appellate Tribunal for
Electricity (APTEL) in Appeal No. 148 of 2018. In the said Appeal, ‘Service Tax
on transportation of Coal by Rail and Road allowed by the Commission, has
also been challenged before the APTEL. Thus, it is impermissible for them to now
contend that the Petitioner’s claim for enhancement of service tax on
transportation of coal by road has been rejected as Change in Law by this
Commission.

Re: Financial Stress of the Petitioner

(k) LPS is duly payable inasmuch as the principal amount towards the said
claim is payable, as brought above. In addition, huge outstanding amounts are

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 due & payable from the Respondents to the Petitioner. However, the same do not
form part of the present Petition before this Commission.

Hearing dated 24.4.2023

7. During the course of the hearing, learned counsels for the parties argued at length.

Based on the request, the parties were allowed to file their respective written submissions.

Written submissions have been filled by the Rajasthan Discoms and the Petitioner on

16.5.2023 and 17.6.2023 respectively wherein parties have reiterated their submissions

already made in their replies and rejoinders and the same is not repeated for the sake of

brevity.

Analysis and Decision

8. The Petitioner had filed Petition No. 101/MP/2017 seeking compensation on

account of the occurrence of various Change in Law and Force Majeure events, which,

inter-alia, included the Change in Law claim towards ‘Increase in Service Tax on

transportation of coal by rail and road’. The said Petition was decided by the Commission

vide order dated 19.12.2017. As regards the Petitioner’s Change in Law claim towards

‘Increase in Service Tax on transportation of coal by rail and road’, the Commission in the

said order dated 19.12.2017 observed as under:

“(J) Increase in Service Tax transportation of coal by rail and road

83. The Petitioner has submitted that as on 11.09.2012, the rate of service tax on
transportation of coal as per the provisions of the Finance Act, 2010 was 12% and the
Education Cess on the said Service Tax was 2% and Higher Education Cess on the said
Service Tax was 1%. As such the total applicable service tax was 12.36%. Vide Notification
no. 26 of 2012 dated 20.06.2012 issued by the Ministry of Finance, GoI an abatement of 70%
on rail and 75% on road has been permitted on freight for the taxable commodities i.e. coal
and as such the Service Tax on transportation of coal by rail and road was 3.708%
(Abatement at 70% of applicable 12.36% of Service Tax) on the total freight inclusive of all
charges on coal as per the provisions of the Finance Act, 2010, which is evident from the rate
circular no. 29 of 2012 dated 28.09.2012 issued by the Railway Board, Ministry of Railway,

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 GoI. By way of notification bearing no. 14/2015-ST, dated 19.05.2015 issued by the Ministry
of Finance, GoI the rate of service tax was enhanced from 12% to 14% due to promulgation
of some of the provisions of the Finance Act, 2015. By notification bearing no. 21/2015-
Service Tax dated 06.11.2015 issued by the Ministry of Finance, GoI, the rate of service tax
was further enhanced from 14% to 14.5% due to promulgation of provision relating to Swachh
Bharat cess on taxable service. The rate of Service Tax was further increased from 14.5% to
15% by way of notification bearing no. 31/2016-Service Tax dated 26.05.2016 issued by the
Ministry of Finance, GoI. The revision of rate of service tax was due to promulgation of
provision relating to Krishi Kalyan cess on taxable service. The abatement of 70% permitted
on freight for the taxable commodities i.e. coal vide notification no. 26 of 2012 dated
20.06.2012 issued by the Ministry of Finance, GoI is still continuing and resultantly the
enhancement of Service Tax on transportation of coal is 4.2%, 4.35% and 4.5% from 3.708%.
As such evidently there is an increase in the service tax on the transportation of coal by rail
and road due to revision of rate of Service Tax by the Ministry of Finance, GoI leading to
increase in cost of supply of power by the Petitioner to the Respondent. The enhancement
of the Service Tax on transportation of coal by rail and road from 12% to 14% to 14.5% and
then to 15% as stated above is a Change in Law within the meaning of Article 10.1.1 of the
PPA. Due to the said increase in the Service Tax on the transportation of coal by rail and
road, the cost of supply of power by the Petitioner to the Respondent under the PPA has
increased and thus the Petitioner needs to be compensated for it as per Article 10.3 read with
Article 10.5 of the PPA. The increase in Service Tax on transportation of coal by rail and road
vide notifications dated 19.05.2015, 06.11.2015 and 26.05.2016 are Change in Law events
within the meaning of Article 10.1.1 of the PPA. Due to the said increase in the rate of Service
Tax on transportation of coal by rail, the cost of supply of power by the Petitioner to the
Respondent under the PPA has increased and thus the Petitioner needs to be compensated
for it as per Article 10.3 read with Article 10.5 of the PPA. Further, the said increase is not
within the direct or indirect reasonable control of the petitioner and such events could not
have been avoided by the petitioner, the said event hinders and impairs the performance of
obligations under the PPA‘s in as much as petitioner is incurring additional cost on the
purchase of coal for the generation of electricity from the project. Therefore, the above said
event is a Force Majeure event within the meaning of Article 9.3 of the PPA‘s. The claim of
the Petitioner on account of levy and increase in Service Tax on transportation of coal by
road and rail from 30.11.2016 to 31.03.2017 is Rs.0.32 Cr.

84. The Respondents i.e. Discoms of Rajasthan State vide its affidavit dated 12.09.2017 have
stated that the service tax on the transportation of coal should not be covered under change
in law. The said tax does not constitute a tax on supply of power and therefore, the
reimbursement of such tax is not by virtue of statutory provisions, but under the terms of the
contract. The respondents and the beneficiaries cannot be allowed to suffer as a result of a
commercial arrangement between the petitioner and railways. Further, the event cited by the
petitioner is not a Force Majeure as the intent of Force Majeure clause is not to give any
monetary compensation to the petitioner.

85. The Respondent No. 6, Prayas vide its affidavit dated 25.09.2017 has submitted that the
increase in service tax is not pursuant to the Ministry of Railway Notifications but Ministry of
Finance. The Petitioner has not annexed the appropriate Notifications. The Annexure P25 is
a Notification rescinding the Notification dated 24.02.2009; however the Petitioner has not
annexed the said Notification dated 24.02.2009. Further the Annexure P-26 refers to an
option granted for liability of krishi kalyan cess. In case, such option results in any benefit or
reduction of liability of service tax of the Petitioner, the said benefits is to be passed on to the

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 Procurers and consumers. In the absence of the submissions of the appropriate Notification,
there cannot be any relief of Change in Law to the Petitioner.

86. We have considered the submissions of the Petitioner, Rajasthan Discoms and Prayas.
The Petitioner has placed on record the concerned notifications. The Commission in the order
dated 1.2.2017 in Petition No. 8/MP/2014 has held that service tax on transportation of goods
by Indian Railways qualifies as Change in Law. Relevant Para of the said order is extracted
as under:

“89. ... By Finance Act of 2006, though service tax on transportation of goods by rail was
introduced, an exception was made in case of Government Railways. By Finance Act of
2009, this restriction was removed by providing that service tax is leviable ―to any person
by another person, in relation to transport of goods by rail in any manner. Therefore,
transport of goods by Indian Railways became subject to service tax by Finance Act of
2009. Actual levy of service tax on transportation of goods by railways was exempted by
Notification No. 33 of 2009 dated 1.9.2009. By Notification no. 26 of 2012 dated 20.6.2012,
Ministry of Finance issued notification by exempting transport of goods by rail over and
above 30% of the service tax chargeable with effect from 1.7.2012. By a Notification No.
43 of 2012 dated 2.7.2012, service tax on transportation of goods by Indian Railways was
fully exempted till 30.9.2012. With effect from 1.10.2012, service tax on 30% of the
transport of goods by rail is chargeable. Therefore, the basis of the service tax on transport
of goods by Indian Railways is traceable to the Finance Act of 2009 which was enacted
after the cut-off date in case of MSEDCL PPA. The rate Circular No. 27 of 2012 dated
26.9.2012 issued by Railway Board implemented the provisions of the Finance Act, 2009
at the ground level. In our view, since the imposition of service tax on transport of goods
by Indian Railways is on the basis of the Finance Act, 2009 which has come into force
after the cut-off date, the expenditure incurred by the Petitioner on payment of service tax
on transport of goods by the Indian Railways is covered under change in law and the
Petitioner is entitled for compensation in terms of the MSEDCL PPA. As on cut-off date in
case of DNH PPA (i.e.1.6.2012), the service tax was on transportation of goods by
Railways was in existence but was under exemption. Therefore, as on cut-off date in case
of DNH PPA, the Petitioner could not have factored service tax on transportation of goods
by Indian Railways which was under exemption. With effect from 1.10.2012, service tax
on 30% of the transport of goods by rail became chargeable. This date being after the cut-
off date in case of DNH PPA, the same shall be admissible under DNH PPA. Subsequent
changes in service tax shall be admissible under change in law.”

In the light of the above decision, the claim of the Petitioner for relief under Change in Law
on account of service tax on transportation of goods by Indian Railways is admissible.
Further, it is noted that w.e.f. 1.10.2012, service tax on 30% of the transport of goods by rail
is chargeable which is after the cut-off date i.e. 11.09.2012. Therefore, the Petitioner has not
accounted for this levy at the time of submission of Bid. In view of the above, the Petitioner
is eligible for the relief as suggested below;

Service tax on
Rate of Admissible rate of
transportation of
Applicability date Service service tax under
goods @ 30% of
tax Change in law
Service tax
11.09.2012 (cut-off 12.36% 0.00% 0% (Petitioner has
date)

Order in Petition No. 619/MP/2020 Page 16 of 29

 accounted 0.00% in its
bid)
1.10.2012 12.36% 3.708% 3.708%
01.06.2015 14.00% 4.200% 4.20%
15.11.2015 14.50% 4.350% 4.35%
01.06.2016 15.00% 4.500% 4.50%

The Petitioner shall be entitled to recover on account of change in service tax on

transportation of coal in proportion to the actual coal consumed, corresponding to the
scheduled generation for supply of electricity to Rajasthan Discoms. If the actual generation
is less than the scheduled generation, the coal consumed for actual generation shall be
considered for the purpose of computation of impact of service tax on transportation of coal.
The Petitioner is directed to furnish along with its monthly bill, the proof of payment and
computations duly certified by the auditor to Rajasthan Discoms. The Petitioner and
Rajasthan Discoms are further directed to carry out reconciliation on account of these claims
annually.
……

Summary of Decision:

140. Based on the above analysis and decisions, the summary of our decision under Change
in Law during the operating period of the project is as under:

S. No. Change in Law events Decision

12 Introduction and Enhancement of Service Tax Allowed
on transportation of coal by rail and road

…………………….”

9. Thereafter, upon coming into effect the Goods and Service Tax (GST) regime

w.e.f. 1.7.2017, the Commission on its own motion, initiated the proceedings in relation

to ‘Abolition of Clean Energy Cess’ and the ‘Introduction of Goods and Service Tax’ vide

Petition No. 13/SM/2017. In its order dated 14.3.2018, the Commission recognized that

the various duties and taxes, which were admissible under the Change in Law provisions

of the PPAs, have been replaced by either Central GST or State GST. Moreover, the

Commission also observed that the introduction of GST and subsuming/abolition of

specific taxes, duties and cess, etc. in the GST is in the nature of Change in Law event

and consequently directed that the details thereof should be worked out between the

Order in Petition No. 619/MP/2020 Page 17 of 29

generators and Discoms/beneficiaries. The relevant extract of the order dated 14.3.2018

is reproduced below:

“4. The Parliament has enacted the following Acts in order to introduce a unified indirect tax
structure in the form of Goods and Services Tax (GST) which has replaced various Central
and State level taxes:
(a) Central Goods and Services Tax, Act, 2017
(b) Integrated Goods and Services Tax Act, 2017
(c) Union Territories Goods and Services Act, 2017
(d) Goods and Services Tax (Compensation to States) Act, 2017
The respective State Legislatures have enacted the States Goods and Services Act, 2017.
5. These Acts have come into effect from 1st July 2017. Therefore, the taxes and duties
which were admissible under Change in Law provisions of the PPAs have been replaced
by either Central GST or State GST. In addition, certain existing taxes have been abolished
and certain new taxes have been introduced.
6. In terms of the above Acts, the following taxes have been merged either in Central GST
or State GST:
(A) Central GST
…
(d) Service Tax
…
26. The above suo-motu petition was initiated to assess the impact of Abolition of Clean
Energy Cess, introduction of goods & services tax in place of host of indirect taxes and
Introduction of Goods and Services Tax Compensation Cess effective from 01.07.2017.
These events are change in law events as already noted above….
27. The Commission in the past, prior to introduction of GST, in cases covered under section
63 and having composite scheme has allowed/disallowed impact of various events of
change in law on tariff. These were decided in terms of provisions of PPA and keeping the
cut-off date of each individual case/petition in sight. There are certain events of change in
laws which are still under consideration of the Commission.
…
29. Keeping in view the above point and earlier decisions of this Commission
allowing/disallowing as change in law, the submissions made by Generator/s and
Distribution Company/ies have been analyzed. From the analysis done on the submissions,
the Commission finds that apart from the GST compensation cess, following taxes,
duties, cess etc. are change in law events as a result of enactment of various
legislations as indicated in paragraph 4, 7 and 8 of this order. The list in not exhaustive
and is only indicative:
i. Taxes, duties and cess levied (wherever applicable):
a) IGST at the rate of 5 per cent,
b) GST of 5 per cent on transportation of coal by rail,
c) GST compensation Cess of Rs.400 per tonne
ii. Taxes and duties subsumed:
a. …….
g. Service tax,

Order in Petition No. 619/MP/2020 Page 18 of 29

 …..
35.…In order to balance the interests of the generators as well as
discoms/beneficiary States, the introduction of GST and subsuming/abolition of
specific taxes, duties, cess etc.in the GST is in the nature of change in law events.
We direct that the details thereof should be worked out between generators and
discoms/beneficiary States. The generators should furnish the requisite details
backed by auditor certificate and relevant documents to the discoms/ beneficiary
States in this regard and refund the amount which is payable to the Discoms/
Beneficiaries as a result of subsuming of various indirect taxes in the Central and
State GST. In case of any dispute on any of the taxes, duties and cess, the
respondents have liberty to approach this Commission."

10. In view of the above, the Petitioner has submitted that its claims towards ‘Service

Tax/GST on transportation of coal through road’ have clearly been allowed by the

Commission as per the order dated 19.12.2017 in Petition No. 101/MP/2017 (increase in

service tax on transportation of coal by road) and the order dated 14.3.2018 in Petition

No. 13/SM/2017 (GST on transportation of coal by road in lieu of service tax), and

accordingly, it had raised the various invoices towards Change in Law event of ‘Service

Tax/GST on transportation of coal through road’ along with the requisite certificates/

documents on PTC for the period from 30.11.2016 to 31.5.2020. However, the

Respondents have not paid the said amounts till date. Accordingly, the Petitioner has filed

the present Petition, inter alia, for execution of the order dated 19.12.2017 in Petition No.

101/MP/2017 and the order dated 14.3.2018 in Petition No. 13/SM/2017.

11. The Respondents 1 to 8, Rajasthan Discoms have, however, submitted that the

Commission, in order dated 19.12.2017, has not considered the claim of the Petitioner

with regard to the increase in service tax on transportation of coal through road and has

specifically & expressly allowed the change in service tax on transportation of coal

through railways only. Thus, without there being a clear order of the Commission, no

payment can be demanded from the Respondents on this count. The Respondents have

Order in Petition No. 619/MP/2020 Page 19 of 29

submitted that the Commission in the said order has clearly traced the history of the

exemption granted and thereafter, the levy, which was a subsequent event. However, in

relation to the levy of service tax on the transportation of coal through road, the same was

never exempted. The transportation of goods through road was in the purview of service

tax from 1.1.2005, which was imposed vide Notification No.32 and 35 of 2004 dated

3.12.2004. However, suppressing the above, and despite the Commission having not

granted the claims of the service tax on road transportation, the Petitioner had claimed

the same, which was correctly rejected. The Respondents have contended that, as per

the legal maxim Expressio Unius Est Exclusio Alterius, it is a settled principle of

interpretation that the express mention of one thing excludes all other things. Thus, out

of the two claims, if one has been specifically and expressly allowed, the only

interpretation to be drawn is that the other claim stands rejected. With regard to the order

dated 14.3.2018 in Petition No. 13/SM/2017, the Respondents have submitted that at

paragraph 29 of the said order, there is again no mention of any tax on the transportation

of coal through road and under the head “Taxes, Duties and Cess levied (wherever

applicable)”, the Commission has only indicated “GST of 5 per cent on transportation of

coal by rail” and that GST on transportation of coal by road has not been mentioned

anywhere as the same was not to be granted as Change in Law. The Respondents have

also relied upon the settled principle that in execution proceedings, the Court cannot go

beyond the decree.

12. We have considered the submissions made by the parties and find it appropriate

to first deal with the question as to whether the order dated 19.12.2017 in Petition No.

101/MP/2017 allows the Petitioner to raise the claims of service tax on the transportation

Order in Petition No. 619/MP/2020 Page 20 of 29

of coal through road. Because, if the answer to this is found to be in the positive, then the

Petitioner’s entitlement to GST on transportation of coal through road under the order

dated 14.3.2018 in Petition No.13/SM/2017 might be rendered as a consequential issue,

albeit, of course, subject to examining the scope of the said order in allowing the GST

impact on transportation of coal through a road.

13. Undeniably, the Petitioner, in Petition No. 101/MP/2017, had prayed for the

Change in Law relief for an increase in the service tax on the transportation of coal

through rail as well as road. The pleadings of the Petitioner to the above effect have also

been clearly captured in the order dated 19.12.2017, at paragraph 83, as already

reproduced above. Moreover, it is pertinent to note that while considering the above claim

of the Petitioner, the order dated 19.12.2017 relied upon and quoted the Commission’s

earlier order dated 1.2.2017 in Petition No. 8/MP/2014, which pertained only to service

tax on transportation of coal by railway mode, and consequently, the order dated

19.12.2017 goes on to expressly deal with and allow the Petitioner’s Change in Law claim

on account of an increase in service tax on transportation of goods by railway. However,

it is equally important to note that the concluding paragraph of the said issue held the

Petitioner entitled to recover the compensation on account of the change in service tax

on transportation of coal in proportion to the actual coal consumed corresponding to the

scheduled generation for supply to the Respondents, without any restriction to the mode

of transportation. At the cost of repetition, we may again reproduce the relevant extract

of the said order quoted in para 8 above as under:

“86…………..The Petitioner shall be entitled to recover on account of change in

service tax on transportation of coal in proportion to the actual coal consumed,

Order in Petition No. 619/MP/2020 Page 21 of 29

 corresponding to the scheduled generation of supply of electricity to Rajasthan
Discoms…..”

Besides the above, the summary of decision, at paragraph 140 (as already quoted

above) of the order also expressly indicates that the Petitioner’s Change in Law claim

towards increase in service tax on transportation of coal by rail as well as road has been

‘allowed’.

14. The above position, therefore, requires us, at this execution stage, to find out the

true effect and the proper interpretation of the order dated 19.12.2017. In this regard, we

may gainfully refer to the ratio laid down by the Hon’ble Supreme Court in the cases of

Bhavan Vaja & Ors. v. Solanki Hanuji Khodaji Mansang & Anr. [(1973) 2 SCC 40], Deep

Change v. Mohal Lal [(2000) 6 SCC 259] and Meenakshi Saxena v. ECGC Ltd. [(2018) 7

SCC 479]. The relevant extracts of the said judgements are reproduced hereunder:

(i) Bhavan Vaja & Ors. v. Solanki Hanuji Khodaji Mansang & Anr., (1973)
2 SCC 40
“20. It is true that an executing court cannot go behind the decree under execution.
But that does not mean that it has no duty to find out the true effect of that decree.
For construing a decree it can and in appropriate cases, it ought to take into
consideration the pleadings as well as the proceedings leading up to the decree.
In order to find out the meaning of the words employed in a decree the Court, often
has to ascertain the circumstances under which those words came to be used.
That is the plain duty of the execution Court and if that Court fails to discharge that
duty it has plainly failed to exercise the jurisdiction vested in it. Evidently the
execution court in this case thought that its jurisdiction began and ended with
merely looking at the decree as it was finally drafted. Despite the fact that the
pleadings as well as the earlier judgments rendered by the Board as well as by the
appellate court had been placed before it, the execution Court does not appear to
have considered those documents. If one reads the order of that Court, it is clear
that it failed to construe the decree though it purported to have construed the
decree. In its order there is no reference to the documents to which we have made
reference earlier. It appears to have been unduly influenced by the words of the
decree under execution. The appellate court fell into the same error. When the
matter was taken up in revision to the High Court, the High Court declined to go

Order in Petition No. 619/MP/2020 Page 22 of 29

 into the question of the construction of the decree on the ground that a wrong
construction of a decree merely raises a question of law and it involves no question
of jurisdiction to bring the case within Section 115, Civil Procedure Code. As seen
earlier in this case the executing Court and the appellate court had not construed
the decree at all. They had not even referred to the relevant documents. They had
merely gone by the words used in the decree under execution. It is clear that they
had failed to construe the decree. Their omission to construe the decree is really
an omission to exercise the jurisdiction vested in them.”

In the above judgement, the Hon’ble Supreme Court has held that while it is true

that an executing court cannot go behind the decree under execution, that does not

mean that it does not have a duty to find out the true effect of the decree and for construing

a decree, it can and, in appropriate cases, it ought to take into consideration of the

pleadings as well as the proceedings leading up to the decree. Also, in order to find out

the meaning of words employed in the decree, the Court often has to ascertain the

circumstances under which those words came to be used.

(ii) Deep Chand & Ors. v. Mohan Lal, [(2000) 6 SCC 259]

“5. …A perusal of the article shows that the period of limitation prescribed by it
starts to run from the date when the decree becomes enforceable provided the
case does not fall within the scope of the latter part of the provision in the third
column. Generally a decree or order becomes enforceable from its date, but in
appropriate cases the court passing the decree may prescribe the time wherefrom
the decree becomes enforceable on a future date. It must, however, be
remembered that the purpose of an execution proceeding is to enable the decree-
holder to obtain the fruits of his decree. In case where the language of the decree
is capable of two interpretations, one of which assists the decree-holder to obtain
the fruits of the decree and the other prevents him from taking the benefits of the
decree, the interpretation which assists the decree-holder should be accepted. The
execution of the decree should not be made futile on mere technicalities which
does not, however, mean that where a decree is incapable of being executed under
any provision of law it should, in all cases, be executed notwithstanding such bar
or prohibition. A rational approach is necessitated keeping in view the prolonged
factum of litigation resulting in the passing of a decree in favour of a litigant. The
policy of law is to give a fair and liberal and not a technical construction enabling
the decree-holder to reap the fruits of his decree.”

Order in Petition No. 619/MP/2020 Page 23 of 29

 In the above judgement, the Hon’ble Supreme Court has held that the purpose of

an execution proceeding is to enable the decree holder to obtain the fruits of the decree,

and in cases where the language of the decree is capable of two interpretations, one

which assists the decree holder to obtain the fruits of the decree and the other which

prevents him from taking the benefits of the decree, the interpretation which assist the

decree-holder should be accepted.

(iii) Meenakshi Saxena v. ECGC Ltd. [(2018) 7 SCC 479]

“The whole purpose of Execution proceedings is to enforce the verdict of the

court. Executing court while executing the decree is only concerned with the
execution part of it but nothing else. The court has to take the judgment in its face
value. It is settled law that executing court cannot go beyond the decree. But the
difficulty arises when there is ambiguity in the decree with regard to the material
aspects. Then it becomes the bounden duty of the court to interpret the decree in
the process of giving a true effect to the decree. At that juncture the executing court
has to be very cautious in supplementing its interpretation and conscious of the
fact that it cannot draw a new decree. The executing court shall strike a fine
balance between the two while exercising this jurisdiction in the process of giving
effect to the decree.”

In the aforesaid judgement, the Hon’ble Supreme Court has held that while it is a

settled law that the executing court cannot go beyond the decree, the difficulty arises

when there is ambiguity in the decree with regard to the material aspects, and in such

cases, it becomes the bounden duty of the court to interpret the decree in the process of

giving a true effect to the decree. Hon’ble Supreme Court has also observed that the

executing court has to be very cautious in supplementing its interpretation and conscious

of the fact that it cannot draw a new decree.

15. Applying the above ratios to the present case leaves no doubt in our mind that the

order dated 19.12.2017 has to be construed in a manner that allows the Petitioner to

Order in Petition No. 619/MP/2020 Page 24 of 29

claim the Change in Law relief in respect of the increase in service tax on the

transportation of coal by road as well. As already noted above, the Petitioner had

specifically prayed for the Change in Law relief on the above aspect - its pleading having

also been captured in the order - and though the prevailing rates of service tax in the

context of the transportation of coal through road have not been expressly dealt with in

the order, the order goes on to allow the Petitioner to claim the compensation for the

increase in service tax for the transportation of coal without restricting the mode of

transportation. Summary of decision, as recorded in the order dated 19.12.2017, also

records the Petitioner’s Change in Law claim towards an increase in service tax on

transportation of coal through rail as well as road as ‘allowed’. Once the Commission

having already held that the increase in service tax, in terms of notifications issued by the

Ministry of Finance, Govt. of India is a Change in Law events, this is the only logical

interpretation of the order dated 19.12.2017, which permits the Petitioner to obtain the

fruits of the said order, especially the findings as recorded in the concluding paragraph of

paragraph 86 and the Summary of decision at paragraph 140 of the order. The above

interpretation of the order dated 19.12.2017 does not, in our view, in any way amount to

the drawing up of a new decree between the parties and, at the best, could only be

considered a proper construction of the order for the removal of the ambiguity therein.

16. It is also pertinent to note that in the Appeal No. 148 of 2018 filed by the Rajasthan

Discoms before the APTEL against the order dated 19.12.2017, the Respondents

themselves challenged the decision of the Commission on allowing the service tax on the

transportation of coal by rail and road. The relevant extract of the said appeal of memo,

as brought on record by the Petitioner, reads as under:

Order in Petition No. 619/MP/2020 Page 25 of 29

 8(ii) Question of Law
The following question of law arise in the present appeal:
(a) ……………
(f) Whether introduction and enhancement of Service Tax on transportation of coal
by rail and road amounts to Change in Law in terms of Article 10 of the PPA?

9(T) SERVICE TAX ON TRANSPORTATION OF COAL BY RAIL AND ROAD

The Central Commission has failed to appreciate that the service tax on the
transportation of coal could have been covered under the Change in Law clause
of the PPA. Apart from the fact that the said tax does not constitute a tax on supply
of power, the reimbursement of such tax by the generator to the transporter is not
by virtue of a statutory provisions, but under the terms of the Contract between the
parties.”

Thus, the Respondents themselves have challenged the order dated 19.12.2017,

inter alia, on the ground that it erroneously allows the service tax on the transportation of

coal by rail and road. This, in our view, is completely contrary to their stand in the present

proceedings in contending that the order dated 19.12.2017 disallows the Petitioner’s

Change in Law claim towards an increase in service tax on the transportation of coal

through road, because if that had been the case, we do not see any reason as to why the

Respondents would go on to challenge such a finding.

17. It is pertinent to take note of the stand taken by Rajasthan’s Discoms prior to the

filing of the present Petition. When the Petitioner was demanding its dues towards service

tax on transportation of coal through road, the Rajasthan Discoms did not dispute the said

claim, and in fact, vide its letter dated 28.4.2020, stated ‘In this regard you are requested

to get a clarification from the CERC’. This, as brought out above, is within the ambit of the

interpretation of the Order, as done by the Commission. Further, even at the time of

hearing of Petition No. 101/MP/2017, the Rajasthan Discoms did not raise any specific

objection with regard to the claim of service tax on the transportation of coal through road

Order in Petition No. 619/MP/2020 Page 26 of 29

and the objection with regard to both rail and road was common, which is so evident from

Para 84 of the order quoted in para 8 above.

18. Insofar as the impact of GST on transportation of coal through road is concerned,

we observe that, as such, the Respondents do not appear to have contested their liability

to compensate the Petitioner for the GST impact on transportation of coal through rail

under the order dated 14.3.2018 in Petition No. 13/SM/2017. However, their objection to

the impact of GST on the transportation of coal through road appears to be on the ground

that there is no mention of any tax on transportation of coal through road, whereas a GST

of 5% on the transportation of coal by rail has been specifically noted therein. However,

the above objection, in our view, is unfounded for the fact that, in the said order, the

Commission has recognized that the introduction of GST and the subsuming/abolition of

specific taxes, duties, cess, etc. are in the nature of Change in Law events. Moreover,

there does not appear to be any issue between the parties with regard to the passing-on

of the net GST impact on the transportation of coal by rail under the said order. The

reliance of the Respondents on paragraph 29(i)(b) to contend that the said order

specifically observes “GST of 5% on transportation of coal by rail” under “Taxes, duties

and cess levied (wherever applicable)” may also not come to any aid to the Respondents

as the said order specifically notes that the list therein is not exhaustive but only indicative.

Thus, keeping in view that the Commission has already held that the Petitioner is entitled

to the Change in Law relief towards an increase in service tax for transportation of coal

by road under order dated 19.12.2017, we do not see any reason as to why the net impact

of GST (upon various taxes/levies having been subsumed thereunder) on the

Order in Petition No. 619/MP/2020 Page 27 of 29

transportation of coal through road ought not to be passed on under the order dated

14.3.2018.

19. In view of the foregoing observations, we hold that the Petitioner is entitled to

compensation on account of Change in Law relief towards service tax and GST on the

transportation of coal by road under the order dated 19.12.2017 in Petition No.

101/MP/2017 and the order dated 14.3.2018 in Petition No. 13/SM/2017. Keeping in view

that the Petitioner has already raised the invoices upon the Respondents for the above

impact for the past period, the Respondents shall clear such past arrears within a month

from the date of this order.

20. With regard to payment of auxiliary consumption, the Petitioner has submitted that,

subsequent to the filing of the Petition, the Respondents have paid Rs 1,16,65,144,37 out

of the total invoiced amount of Rs. 1,88,38,861/-. The Respondents have submitted that

they have paid Rs. 1,94,012,37/- towards auxiliary consumption and no payment is

outstanding against the Respondent on this count. Since the Respondents have already

paid the entire amount towards auxiliary consumption, no direction is required to be

issued in this regard.

21. With regard to the Petitioner’s claim pertaining to Late Payment

Surcharge/carrying cost, the Respondents have submitted that when the principal claim

is misconceived, the question of LPS/carrying cost does not arise. Moreover, the

Commission, in its impugned order, has already disallowed the carrying cost in the instant

Petition and the issue has been challenged by the Petitioner before APTEL which is still

pending. We have considered the submissions of the parties. The claims of the Petitioner

Order in Petition No. 619/MP/2020 Page 28 of 29

with regard to interest/LPS have not been examined in the present proceedings, since

the scope of the present petition is limited only to the implementation of the orders dated

19.12.2017 and 14.3.2018 in Petition No. 101/MP/2017 and 13/SM/2017 respectively,

and not beyond.

22. The Petitioner has prayed for initiation of actions against the Respondents under

Section 142 read with Section 149 of the Act for the non-compliance with the

Commission’s orders dated 19.12.2017 and 14.3.2018. Admittedly, in the present case,

the Respondents have made the payment of outstanding amounts towards auxiliary

consumption to the Petitioner but the amount with regard to service tax on transportation

of coal by road has not been paid, purportedly in the absence of a clarity. Keeping in view

the peculiar facts & circumstances of the present case, we do not find any reason to

initiate proceedings against the Respondents in terms of Section 142 of the Act.

23. In light of the above discussion, the Petition No. 619/MP/2020 is disposed of.

Sd/- sd/- sd/- sd/-

(P.K. Singh) (Arun Goyal) (I.S. Jha) (Jishnu Barua)
Member Member Member Chairperson

Order in Petition No. 619/MP/2020 CERC Website S. No. 268/2023 Page 29 of 29