CASE No. 42 of and. M.A. No. 3 of M.A. No. 4 of 2015

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1 Before the MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai Tel /65/69 Fax Website: CASE No. 42 of 2015 and M.A. No. 3 of 2015 M.A. No. 4 of 2015 In the matter of Petition of Seafood Exporters Association of India regarding wrongful Tariff categorization by Maharashtra State Electricity Distribution Co. Ltd. in violation of Tariff Order dated in Case No. 19 of 2012 Coram Shri. Azeez M. Khan, Member Shri. Deepak Lad, Member The Seafood Exporters Association of India Maharashtra Veej Grahak Sanghatana Petitioner Intervenor V/s Maharashtra Electricity Distribution Co. Ltd. Respondent Appearance For Petitioner: For Respondent: For Intervenor: For Consumer Representative: Ms. Deepa Chawan (Sr. Counsel) Shri. Ashish Singh (Advocate) Shri Pratap Hogade Dr. Ashok Pendse (TBIA) Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 1 of 17

2 ORDER Dated: 13 May, The Seafood Exporters Association of India (SEAOI), whose Regional Office is at 810, Vashi Infotech Park, Sector 30-A, Vashi, Navi Mumbai, has filed a Petition on 25 March, 2015 under Sections 62, 64, 86(1) (a), 142 and 146 of the Electricity Act (EA), 2003 seeking relief on account of wrongful change in tariff category of its Members by the Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL). 2. SEAOI s prayers are as follows: a) The Petitioner Association therefore prays that a this Hon ble Commission be pleased to hold the Respondent, MSEDCL guilty of disobedience of the orders and directions passed by this Hon ble Commission relating to retrospectively. b) This Hon ble Commission be pleased to hold the Respondent liable for disobedience of the tariff order dated by deliberately and willfully ignoring the term non Industrial Premises in the Tariff Entry HT-II Commercial and their by disobeying the said tariff order. c) For declaration that the Respondent has initiated tariff categorization nearly one and the half / two years (11/2 / 2 years) post the passing of the tariff order dated by willfully and deliberately initiating tariff categorization with visits from Vigilance Department / Flying Squad of the Respondent. d) The Respondent be directed to purge the contempt / willfully disobedience of the tariff order dated by withdrawing all actions initiated including all bills issued by re-categorizing the Industry / Factories of the members of the Petitioner Association under the tariff category / tariff head HT-II Commercial. e) Directions be issued to the Respondent, MSEDCL to ensure proper categorization upon passing of a tariff order within a reasonable time as stipulated by the Commission to ensure that the Respondent, MSEDCL are not harassed and subjected to undue hardship. f) Pending hearing and final disposal of the case all the bills including Supplementary bills issued by the Respondent, MSEDCL to the extent of recategorization of the factories / industries of the Members of the Petitioner Association into HT-II Commercial, be stayed and the Respondent, MSEDCL and its officials / agents be restrained from taking any coercive step against the members of the Petitioner Association in respect of the willful and Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 2 of 17

3 deliberate re-categorization of the Industry / Factory of the Members of the Petitioner Association into HT-II Commercial; g) Appropriate refunds in respect of the differential amounts towards the tariff categorization HT Commercial claimed by the MSEDCL from the members of the Petitioner Association be granted with interest at the rate of 12%. h) The Hon ble Commission be pleased to order interim and ad-interim reliefs in terms of prayers (f) above; i) This Hon ble Commission be pleased to award cost for these proceedings against Respondent No.1 and in favour of the Petitioner. j) The Hon ble Commission be pleased to pass such other orders as this Hon ble Commission may deem fit. 3. The Petition states that: a. SEAOI has been established to protect the interests of Companies engaged in the seafood business and to develop the international trade of seafood from India. It is registered as a Company under the Companies Act. The list of its Regional Members is annexed to the Petition. b. The Members of SEAOI are availing electricity supply from MSEDCL on High Tension (HT) voltage and were categorized under the Industrial Tariff category. c. On 20 June, 2008, the Commission issued a Tariff Order in Case No. 72 of 2007 in respect of MSEDCL in which a new category of HT-II Commercial was created. Thereafter, MSEDCL sought to alter the tariff category of some Members of SEAOI from HT-I Industrial to HT-II Commercial. d. SEAOI and its Members made representations to MSEDCL stating that they are functioning in industrial premises and carrying out industrial activity in their factory premises wherein the raw material is fish. e. On 19 January, 2009, an Inspection Report was sought by MSEDCL from the Executive Engineer in whose area the industrial Units of some of the Members of SEAOI were situated. On 17 March, 2009, the Chief Engineer (CE) (Commercial), MSEDCL addressed a communication, referring to the representation made against the change of category by SEAOI, which stated that: Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 3 of 17

4 Accordingly in view of all the facts an office note was put up before the competent authority for consideration of cold storage as HT Industry since the Government has given SSI Certificates for cold storage and allotted the plot of MIDC area as a industry and its activity is of a continuous process Competent authority has accorded approval for categorisation of cold storage as industry in case they have a factory license or SSI certificate or any other equivalent documents from the relevant government authority All field officers are requested to categorize the cold storage as industry having factory license and SSI Certificate or any other equivalent documents from the relevant government authority. f. From 20 June, 2008, when the Commercial category was created for the first time, the Units of the Members of SEAOI continued to be categorized as Industrial and were charged under the HT-I Industrial Tariff category. g. On 16 August, 2012, the Commission issued its Tariff Order ( the Tariff Order ) for MSEDCL in Case No. 19 of The relevant extract of the Order reads as below: HIGH TENSION (HT) TARIFF HT I : HT- Industry Applicability This category includes consumers taking 3-phase electricity supply at High Voltage for industrial purpose. This Tariff shall also be applicable (but not limited to) for use of electricity / power supply for Administrative Office / Time Office, Canteen, Recreation Hall /Sports Club / Health Club / Gymnasium / Swimming Pool exclusively meant for employees of the industry, lifts, water pumps, fire fighting pumps, premises (security) lighting, etc. provided all such Administrative Office / Time Office, Canteen, Recreation Hall / Sports Club / Health Club / Gymnasium / Swimming Pool, lifts, water pumps, fire fighting pumps, etc. are situated within the same industrial premises and supplied power from the same point of supply; This Tariff shall also be applicable for use of electricity / power supply by an establishment covered under IT Industry and IT Enabled Services Policy of Government of Maharashtra as may be prevailing from time to time. This Tariff shall also be applicable to Research & Development units situated in the same premises of an industry and taking supply from the same point of supply. However R&D units situated at other place and taking supply from different point of supply shall be billed as per either HT (II) (A) or HT (II) (B) as the case may be; This Tariff shall also be applicable for use of electricity / power supply for operating: Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 4 of 17

5 Flour Mill, Dal Mill, Rice Mill, Poha Mill, Masala Mills, Saw Mills, Powerlooms including other allied activities like, Warping, Doubling, Twisting, etc. Ice Factory, Ice- cream manufacturing units, Milk Processing / Chilling Plants (Dairy), Engineering workshops, Engineering Goods Manufacturing units, Printing Press, Transformer repairing workshops Mining, Quarry & Stone Crushing units; Garment manufacturing units, Sewage Water Treatment Plant/ Common Effluent Treatment Plant owned, operated and managed by Industrial Association situated within industrial area only. HT II: HT- Commercial Applicability HT II (A): EXPRESS FEEDERS Applicable for use of electricity / power supply at High Tension on Express Feeders in all non-residential, non-industrial premises and/or commercial premises for commercial consumption meant for operating various appliances used for purposes such as lighting, heating, cooling, cooking, washing/cleaning, entertainment/leisure, pumping in following (but not limited to) places: m) Aquaculture, Sericulture, Fisheries, Cattle Breeding Farms; h. On 5 September, 2012, MSEDCL issued Commercial Circular No. 175 for implementation of the Tariff Order. MSEDCL did not give any intimation to SEAOI s Members regarding any change in tariff categorization or otherwise. Even after the Tariff Order, SEAOI s Members were charged under the HT Industrial category. i. In December, 2013, one and half years after the implementation of the Tariff Order, SEAOI s Members were subjected to visits from the Flying Squad unit of MSEDCL. j. In June, 2014, MSEDCL started raising electricity bills under the Commercial category instead of the Industrial category. In February, 2015, MSEDCL issued bills with debit adjustment for the previous period. SEAOI pursued MSEDCL to obey the Tariff Order in its true spirit. k. On 9 July, 2014, SEAOI approached the Bombay High Court for limited relief in respect of the change in category. The High Court disposed of the Writ Petition on 8 January, 2015 and directed MSEDCL to hear the representation of SEAOI. MSEDCL did so, and issued a decision holding the application of Tariff category by MSEDCL in view of the Tariff Order to be Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 5 of 17

6 appropriate, and stating that SEAOI may approach the Commission for clarification or review if it deemed fit. l. Hence, being aggrieved by non-compliance of the Order and directions of the Commission, SEAOI has filed the present Petition. The Commission may consider the disobedience by MSEDCL in terms of retrospective levy pursuant to the change of categorization. MSEDCL is willfully resorting to retrospective levy one and half years after the Tariff Order. In Case No. 24 of 2001, in the matter of Maharashtra Industrial Development Corporation (MIDC), the Commission had held that no retrospective recovery of arrears can be allowed on the basis of any abrupt reclassification of a consumer even though it might have been pointed out by the Auditor. m. MSEDCL has deliberately flouted the Tariff Order by not taking into consideration that the SEAOI s Members are engaged in a manufacturing activity wherein fish is used as raw material. It cannot be equated with as Fisheries. Ignoring the term non industrial premises in the Tariff Entry HT-II C so as to render it otiose and nugatory is a deliberate action of not complying with the Tariff Order dated 16 August, n. Item (m) under the tariff heading HT-II: Commercial Category comprises some other services as well, including: m) Aquaculture, Sericulture, Fisheries, Cattle Breeding Farms; The other words have to be read ejusdem generis. The tariff item (m) reveals a commonality of factors, namely undertaking breeding or rearing in each of the said activities. o. Most of the factories of Members of the Petitioner Association are admittedly situated in an Industrial Area, namely the MIDC Industrial Area at Taloja which are, in fact, notified industrial premises. The term Industrial Area is defined under Maharashtra Industrial Development Act, 1961 as under:- 2. (g) Industrial area means any area declared to be an industrial area by the State Government by notification in the Official Gazette, which is to be developed and where industries are to be accommodated; This aspect of the SEAOI s Members being allocated and functioning from industrial plots by setting up their manufacturing units is admittedly known to MSEDCL as the actions have been initiated after visits by the Flying Squad. Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 6 of 17

7 p. MSEDCL has ignored the fact that the Petitioner s Members are taking 3- phase electricity supply at high voltage for industrial purpose. This aspect is has not been disputed by the Respondent. The activities undertaken by them at their Units in the Industrial Areas involve various machines and include various processes like thawing, washing, blanching, cooking, marinating, flash frying, manufacturing ice for cooling, retorting, drying, cold storage, incubations and testing. The processes set out in the Flow Chart annexed to the Petition clearly indicate the industrial activity carried out at the plants. The list of machinery used in the process is also vital and are not disputed by MSEDCL. q. The Respondent has flouted the Tariff Order by not taking into consideration that a manufacturing activity wherein fish is used as a raw material is not included in the term fisheries. Fisheries mean admittedly the breeding or rearing of fish or cultivation of fish, with fishery being a right to take fish. A free fishery is the exclusive right of fishing in a public river and is a royal franchise in the United Kingdom. Common fishery or common piscary is the right of fishing in another man s quarters. A Several fishery is the exclusive right of fishing in another man s waters, and he that has it, according to Blackstone, must also be the owner of the soil. Exhibit 14 of the Petition sets out the meaning of the term fishery in the Black s Law Dictionary (7 th edition). The HT-II Commercial Tariff Category, which includes fisheries, has to be interpreted accordingly. That the term fisheries denotes the right of fishing is also clear from Entry 57 in List I of Schedule VII to the Constitution of India: 57. Fishing and Fisheries beyond Territorial Waters. Similarly, Item 21 in List II of Schedule VII of the Constitution deals with Fisheries in Inland and Territorial Waters of a State. Thus, the Constitutional provision itself renders the meaning clearly as one which involves the activity of fishing. r. An industry which uses fish as a raw material and subjects the fish to various processes and utilizes different machines for that activity cannot by any stretch of imagination be considered as being fisheries. s. The term Fisheries used in HT-II Commercial Category of the Tariff Order cannot be used in isolation to and independent of the embargo put in that entry, namely non-industrial premises. MSEDCL, in its endeavour to place the industry of the Petitioner Association in HT-II Commercial Category, cannot Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 7 of 17

8 render the words Non-Industrial Premises in that category otiose and nugatory. t. A new article as a food item comes into being after undergoing the various processes in the industry of the Petitioner Association. 4. Maharashtra Veej Grahak Sanghatana (MVGS), Ichalkaranji, Distt. Kolhapur, filed an Intervention Application (Miscellaneous Application (MA) No. 3 of 2015) on 15 April, 2015 through its President, Shri Pratap Ganpatrao Hogade, with the following prayers: 1. The improper categorization and application of Commercial Tariff on all these Seafood products units should be squashed and set aside with retrospective effect i.e. from 1 st August 2012 and the proper Industrial Categorization should be ensured and confirmed. 2. The necessary directions should be issued to the respondent MSEDCL. All the supplementary bills and / or tariff difference bills should be stayed; coercive actions should be stayed, till the final disposal of the case. 3. All other prayers of the Petitioner Association should be considered and the directions should be issued as the Honourable Commission may deem fit. Hearing: Please allow us to appear as an intervener in this case and to put up our views on 16 th April 2015 at the time of hearing and oblige. 5. The Intervention Application states that: a. The Petition is filed by SEAOI due to improper tariff categorization of seafood manufacturing Units in the commercial category instead of the industrial category. This is a generic issue. In the interest of all such Units, MVGS has filed this Intervention Application. b. Seafood manufacturing Units cannot be categorized under the HT-II Commercial category on any ground, because such Units undertake various industrial, processing and manufacturing activities. Seafood products Units are not engaged in any rearing and breeding activities. c. MSEDCL has decided to categorise such Units under HT-II tariff category as Fishery Units on the basis of Flying Squad reports. d. However, there is a big difference between the raw material, i.e. fish, and the final products, i.e. edible and cookable fish / seafood products. The raw fish in the latter case goes through various industrial and engineering processes. Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 8 of 17

9 e. The Commission has included dal mill, rice mill, milk processing, chilling plants in the HT-I Industrial category. Hence, the seafood products also should be considered as being in the Industrial category. f. All these Units are under the head Industrial / Manufacturing Units and are under the obligation of various industrial compliances of Industries Department of Govt. of Maharashtra (GoM) and various authorities, including Ministry of Commerce, Government of India (GoI). It is also binding on these Units to obtain all other industrial licences and/or clearances under the Factories Act, Pollution Control Act, and various such laws. g. The Commercial Tariff has been improperly applied to these Units on the basis of misinterpretation of the Tariff Order. 6. SEAOI submitted an Application (MA No. 4 of 2015) on 21 April, 2015 seeking the following ad-interim reliefs a) The Respondent, MSEDCL be restrained from issuing disconnection notices to the Members of the Petitioner Association listed at Annexure 1, Pg 22 to the above Petition and be further restrained for taking any coercive steps, in respect of the alteration of the tariff categorization of the Members of the Petitioner Association to other than HT-Industrial Category. b) Such further and other orders, as the facts and circumstances so this case may require. c) Cost of this Application be provided for. 7. In its Application, SEAOI submitted as under: a. Many Members of SEAOI have received notices of disconnection from MSEDCL, even though MSEDCL is well aware that the matter is sub judice before the Commission. b. The Commission has been conferred with power to issue interim Orders as per Section 94 of the EA, c. Under these circumstances, SEAOI would be adversely affected and grave hardship would be caused to it, as the industries are continuous process industries and, therefore, urgent ad interim Orders be passed. 8. In its Reply dated 7 May, 2015, MSEDCL has stated as follows : a. As per the Tariff Order in Case No. 19 of 2012, the applicability of the HT II Commercial Tariff is as under: Applicable for use of electricity / power supply at High Tension on Express Feeders in all non-residential, non-industrial premises and/or commercial Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 9 of 17

10 premises for commercial consumption meant for operating various appliances used for purposes such as lighting, heating, cooling, cooking, washing/cleaning, entertainment/leisure, pumping in following (but not limited to) places: m) Aquaculture, Sericulture, Fisheries, Cattle Breeding Farms; b. As part of routine inspection, HT consumers in Vashi and Taloja area were inspected by the Flying Squads in November/ December, During these inspections, it was found that the cold storages in the area were processing fish, in which the raw material and finished goods are fish. As the processing activities did not result in transformation into a new and different article, it does not fall in the category of manufacturing. As per the Tariff Order, the activities such as Aquaculture, Sericulture, Fisheries and Cattle Breeding Farms fall under the Commercial category. c. The word Fisheries has a definite meaning, which includes breeding of fish, fishing and other activities to sell such fish in the market. The flow chart submitted shows that it is a process from receiving the fish into the store and selling, as well as making them presentable for sale. There is no industrial process involved in this activity. Hence, it comes under the concept of Fisheries. d. From reports of the Flying Squad, it was observed that the proper Tariff categorization for activities relating to fisheries was not done by some of the field offices as per the Tariff Order. Hence, guidelines were issued on 13 May, 2014 to apply the Commercial tariff category to pre-cooling and cold storages wherein the power supply is utilized for fisheries, and to recover the difference amount from 1 August, 2012 without any penalty or interest. e. MSEDCL is bound by the Commission s Tariff Order irrespective of any other definition in any other document for that purpose. Thus, changes in MSEDCL s Tariff Order can be made only by way of clarification, interpretation, or review Petition by the Commission or Appellate Tribunal for Electricity (ATE). f. MSEDCL has to apply the tariff as per the Tariff Order. MSEDCL has correctly charged the Tariff in the present case. g. SEAOI had filed a Writ Petition No of 2014 before the Bombay High Court on the issue of applicability of tariff to pre-cooling and cold storages wherein power supply is utilized for fisheries. The High Court, vide its Order dated 3 November, 2014,disposed of the matter and directed MSEDCL as under: Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 10 of 17

11 We direct the Director (Operations) of the first Respondent to consider the representation and in particular the representation dated 17 October, 2014 and to pass an appropriate Order thereon within a period of two months from today. The Director (Operations) of the first Respondent shall give an opportunity of being heard to the representatives of the Petitioner. He shall allow the representatives of the Petitioner to place necessary documents on record concerning the members of the Petitioner. h. As per the High Court directives, Director (Operations), MSEDCL heard SEAOI and decided as under: Considering the tariff Order issued by the Hon ble MERC, the tariff applied in this case of Seafood Association of India is appropriate and it is felt that no direction are required to modify the same. Seafood Exporters Association of India may approach the Hon ble Commission for clarification or review if they deemed fit. As per the Hon ble High Court Order, it will open for any individual Member of the Petitioner to file any other appropriate proceedings in accordance with law. i. MSEDCL has followed the provisions of the Tariff Order. Further, in its Multi Year Tariff (MYT) Petition, MSEDCL has proposed the Industrial category tariff for cold storages for fish / fisheries. 9. At the hearing on 24 November2015, a. SEAOI reiterated the issues raised in its Petition, seeking clarification with regard to proper tariff categorisation as HT Industrial instead of HT Commercial which has now been applied by MSEDCL. SEAOI submitted a detailed explanation on the term Fisheries, to which the HT Commercial tariff is applicable, as against the seafood processing activities, including cold storage, in which its Members are engaged, and which are in industrial premises and recognized as such by the Directorate of Industries and other authorities and statutes. These activities are covered under the Micro, Medium and Small Enterprises Development (MSME) Act, 2006 as industrial. To a query by the Commission, SEAOI stated that it would also provide material regarding the position under the Industries (Development & Regulation) (IDR) Act, Moreover, MSEDCL has re-categorised the activities in question to HT Commercial from June, 2014 and raised the bills retrospectively citing the Commission s Tariff Order 16 August, 2012 in Case No.19 of Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 11 of 17

12 b. MSEDCL submitted that the retrospective charges are levied in accordance with section 56 (2) of the EA, Moreover, as per the High Court Order, MSEDCL had duly considered and rejected SEAOI s representation considering the nature of the activity and the description of the Tariff categories in the Commission s Tariff Order dated 16 August, c. Intervener Shri. Pratap Hogade, on behalf of MVGS, supported SEAOI s submissions. He also cited the ATE Judgement in Appeal No. 131 of 2013 which directs that any recovery of charges is to be levied from the date of detection of the error. d. Dr. Ashok Pendse, on behalf of Thane-Belapur Industries Association (TBIA), an Authorised Consumer Representative, supported this contention with regard to the retrospective recovery of charges in accordance with the ATE Judgment in Appeal No.131 of e. As recorded in its Daily Order, the Commission directed that no coercive action be taken against SEAOI s Members till final disposal of the matter. The Commission noted the statement of MSEDCL that it had already decided not to do so, which was acknowledged by SEAOI. 10. In compliance of the Daily Order, SEAOI filed its additional submission on 4 December, 2015, stating that: a. Fish is the raw material which is used by the Members of SEAOI for food processing. The intricate manufacturing processes, utilizing state of art machinery and equipment in controlled environment of low temperatures with quality control is the core of this food processing industry. The Members of SEAOI have Licences under the Factories Act, Certificate of Directorate of Industries, are situated in Industrial Areas and are within the ambit of the MSME Act, b. The relevant provisions of the Industries (Development and Regulation) Act, 1951 read as follows: (bb) existing industrial undertaking means (a) in the case of an industrial undertaking pertaining to any of the industries specified in the First Schedule as originally enacted, an industrial undertaking which was in existence on the commencement of this Act or for the establishment of which effective steps had been taken before such commencement, and Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 12 of 17

13 (b) in the case of an industrial undertaking pertaining to any of the industries added to the First Schedule by an amendment thereof, an industrial undertaking which is in existence on the coming into force of such amendment or for the establishment of which effective steps had been taken before the coming into force of such amendment; (c) factory means any premises, including the precincts thereof, in any part of which a manufacturing process is being carried on or is ordinarily so carried on- (i) (ii) with the aid of power, provided that fifty or more workers are working or were working thereon on any day of the preceding twelve months; or without the aid of power, provided that on hundred or more workers are working or were working thereon on any day of the preceding twelve months and provided further that in no part of such premises any manufacturing process is being carried on with the aid of power; (d) industrial undertaking means any undertaking pertaining to a scheduled industry carried on in one or more factories by any person or authority including Government; (dd) new article, in relation to an industrial undertaking which is registered or in respect of which a licence or permission has been issued under this Act, means (a) (b) (h) any article which falls under an item in the First Schedule other than the item under which articles ordinarily manufactured or produced in the industrial undertaking at the date of registration or issue of the licence or permission, as the case may be, fall; any article which bears a mark as defined in the Trade Marks Act, 1940 (5 of 1940), or which is the subject of a patent, if at the date of registration or issue of the licence or permission, as the case may be, the industrial undertaking was not manufacturing or producing such article bearing that mark or which is the subject of that patent; Schedule means a Schedule to this Act; THE FIRST SCHEDULE Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 13 of 17

14 Any industry engaged in the manufacture or production of any of the articles mentioned under each of the following heading or subheadings, namely :- 27. FOOD PROCESSING INDUSTRIES : (1) Canned fruits and fruit products. (2) Milk foods. (3) Malted Foods. (4) Flour. (5) Other processed foods. c. Thus, under the provisions of the IDR Act, 1951, food processing industry which deals with other processed foods is clearly within the ambit of the term Industry. d. As per the Free Dictionary by Farlex, the term food means: 1. Material, usually of plant or animal origin, that contains or consists of essential body nutrients, such as carbohydrates, fats, proteins, vitamins, or minerals, and is ingested and assimilated by an organism to produce energy, stimulate growth, and maintain life. 2. A specified kind of nourishment: breakfast food; plant food. 3. Nourishment eaten in solid form: food and drink. 4. Something that nourishes or sustains in a way suggestive of physical nourishment: food for thought. e. The Oxford English Dictionary, Indian Edition defines food as any nutritious substance that people or animals eat or drink or that plants absorb in order to maintain life and growth. f. Accordingly, the industrial processes using fish as a raw material, which is a material of animal origin, and processing it into food ought to be categorized as food processing industry and not as fisheries. Commission s Analysis and Ruling 11. SEAOI is essentially seeking a clarification regarding the tariff category applicable to Units, such as those of its Members, considering the nature of their activities and processes; and the correct interpretation of the terms used in the Tariff Order to define the tariff categories. SEAOI contends that, considering the categorisation set out in the Tariff Order dated 16 August, 2012 in Case No. 19 of 2012, the Industrial category tariff is to be applied to such Units, as against Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 14 of 17

15 the Commercial category tariff which has been applied retrospectively by MSEDCL. 12. In its Tariff Order of 2012, the Commission defined the tariff categories relevant to this Case as follows: HIGH TENSION (HT) TARIFF HT I : HT- Industry Applicability This category includes consumers taking 3-phase electricity supply at High Voltage for industrial purpose This Tariff shall also be applicable for use of electricity / power supply for operating: Flour Mill, Dal Mill, Rice Mill, Poha Mill, Masala Mills, Saw Mills, Powerlooms including other allied activities like, Warping, Doubling, Twisting, etc. Ice Factory, Ice- cream manufacturing units, Milk Processing / Chilling Plants (Dairy) HT II: HT- Commercial Applicability HT II (A): EXPRESS FEEDERS Applicable for use of electricity / power supply at High Tension on Express Feeders in all non-residential, non-industrial premises and/or commercial premises for commercial consumption meant for operating various appliances used for purposes such as lighting, heating, cooling, cooking, washing/cleaning, entertainment/leisure, pumping in following (but not limited to) places: m) Aquaculture, Sericulture, Fisheries, Cattle Breeding Farms; (This also applies to the corresponding HT non-express Feeder category, and there is a broadly similar dispensation for the relevant LT category.) 13. Thus, the applicability of the HT I Industrial tariff is defined in terms of the supply of electricity for industrial purposes (and support or ancillary activities in the same industrial premises), including various activities akin to processing. (It is also applicable to certain otherwise non-industrial activities which are not relevant to the present matter.) In contrast, the HT-II Commercial tariff is Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 15 of 17

16 applicable to lighting, pumping, cooling and other such loads in commercial or non-industrial/non-residential premises. An illustrative list is provided in which, significantly, the activity of fisheries has been clubbed with aquaculture, sericulture and cattle breeding. Thus, the activity of fisheries to which the Commercial tariff is applicable is in the nature of commercial breeding or rearing and associated activities. It does not extend to the further chain of processing, including into essentially different forms, of the raw produce. The Commission is of the view that the latter, for which fish is the raw material, would qualify as activities to which the Industrial tariff would apply. This restricted meaning of the term fisheries, which is clear from the nature of the other activities cited in the same Item (m), as used in the tariff categorization is also in consonance with the common or dictionary meaning of the term fisheries (and the Black s Law Dictionary has also been cited during these proceedings). Moreover, as envisaged in the Commercial tariff category, such rearing, breeding and associated activities would generally not be undertaken in industrial premises. 14. The supply of electricity for industrial purpose to which the Industrial tariff under the Tariff Order of 2012 is to be applied has to be construed in the light of the above. Moreover, industrial purpose would commonly include manufacturing as well as processing, and no contrary dispensation has been set out in the Tariff Order. While different statutes are enacted for different purposes, and the meaning ascribed to a term may differ from one statute to another, the Commission also notes that the IDR Act, 1951 and the MSME Act, 2006, for instance, both include such food processing as an industrial activity; that the Petitioner s Members claim to hold Licences under the Factories Act, 1948, and are said to be located on industrial plots in MIDC areas. The various integrated processing activities said to be undertaken by its Members subsequent to the commercial rearing or breeding of fish and other seafood have been described by SEAOI in its Petition, and illustrated through a flow chart. 15. At paras. 12 and 13 above, the Commission has clarified that such seafood processing activities would attract the relevant HT or LT Industrial tariff and not the Commercial tariff. Obviously, the interpretation of terms clarified by the Commission in this Order shall apply to all such undertakings and not only to the Petitioner s Members. MSEDCL shall, within 2 months: review the tariff applied to the Petitioner s Members and other such Units in the light of this Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 16 of 17

17 clarification; revise (if appropriate) the tariff category sought to be applied to such Units; and refund the consequential excess amount, if any has been recovered. For any subsisting grievance with regard to the tariff applied, the consumer may take recourse to the Consumer Grievance Redressal Forum mechanism specified in the Commission s Regulations, which shall address such grievance considering the clarification given in this Order. 16. As far as retrospective application of a different tariff category is concerned, the Commission s ruling in its Order dated 11 February, 2003 in Case No. 24 of 2001, which is relevant in this Case, was as follows: No retrospective recovery of arrear can be allowed on the basis of any abrupt reclassification of a consumer even though the same might have been pointed out by the Auditor. Any reclassification must follow a definite process and the recovery, if any, would be prospective only The same cannot be categorized as an escaped billing in the strict sense of the term to be recovered retrospectively. While that Order was passed prior to the coming into force of the EA, 2003, the same principle continues to apply: the ATE s more recent Judgment dated 7 August, 2014 in Appeal No. 131 of 2013, for instance, has also been cited in these proceedings. The Petition of Seafood Exporters Association of India in Case No.42 of 2015 and Miscellaneous Applications No. 3 and. 4 of 2015 stand disposed of accordingly. Sd/- (Deepak Lad) Member Sd/- (Azeez M. Khan) Member Order in Case No. 42 of 2015 and MA 3 & 4 of 2015 Page 17 of 17