A bench led by Justice MR Shah whereas upholding the Appellate Tribunal for Electrical energy’s March 2019 choice mentioned that after it’s held that the captive shoppers/captive customers should not liable to pay the extra surcharge leviable underneath Part 42(4) of the Electrical energy Act 2003, MERC has to refund the extra surcharge collected from the captive shoppers like JSW.

In a serious reduction to captive shoppers of electrical energy just like the JSW group of firms, the Supreme Court docket on Friday held {that a} group of customers of captive energy crops should not liable to pay a further surcharge of Rs 1.25 per unit, as directed by the Maharashtra Electrical energy Regulatory Fee (MERC).

A bench led by Justice MR Shah whereas upholding the Appellate Tribunal for Electrical energy’s March 2019 choice mentioned that after it’s held that the captive shoppers/captive customers should not liable to pay the extra surcharge leviable underneath Part 42(4) of the Electrical energy Act 2003, MERC has to refund the extra surcharge collected from the captive shoppers like JSW.

Nevertheless, it mentioned that since “there shall be an enormous legal responsibility on the Fee if it has to now refund the quantity of extra surcharge recovered at a stretch, we direct that the extra surcharge already recovered from the captive shoppers/captive customers shall be adjusted sooner or later wheeling prices payments.”

The levy of a further surcharge underneath sub-section (4) of Part 42 will be justified as compensatory in nature solely the place the state fee permits a client or class of shoppers to obtain a provide of electrical energy from an individual apart from the distribution licensee supplying of its space topic to fee of extra surcharge on the fees of wheeling as could also be specified by the state fee to fulfill the fastened price of such distribution licensee arising out of his obligation to provide. Ordinarily, a client or class of shoppers receives electrical energy provide from the distribution licensee in its space of provide.

As far as captive shoppers/captive customers are involved, no such permission of the state fee is required, thus no extra surcharge is payable by them, the SC mentioned, including that the captive shoppers/captive customers being a definite and separate class by themselves have additionally to incur the expenditure and/or make investments the cash for setting up, sustaining or working a captive producing plant and devoted transmission strains.

“… in that case, will probably be discriminatory and it may be mentioned that unequals are handled equally,” the judgment said.
The Fee in September 2018 had held that the extra surcharge leviable underneath Part 42(4) of the Electrical energy Act, 2003 doesn’t apply to captive customers to the extent of their self-consumption from such crops, however applies to all shoppers who’ve availed open entry to obtain provide from sources apart from the distribution licensee to which they’re related.

JSW Metal, JSW Power, JSW Cement and different group firms had challenged MERC’s choice within the Aptel, saying that the Fee had ignored the idea of non-discriminatory open entry when it comes to the Act in addition to Nationwide Electrical energy Coverage which eliminates competitors and offers a provide of energy on to the shoppers by open entry.

The tribunal additionally held that there can’t be any distinction between a person captive client and group captive shoppers or authentic captive shoppers and transformed captive shoppers.

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https://www.financialexpress.com/trade/sc-asks-maharashtra-regulator-to-refund-surcharge-collected-from-captive-power-users/2386358/