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2016 Supreme(SC) 884
SUPREME COURT OF INDIA
DIPAK MISRA, SHIVA KIRTI SINGH, JJ.
MANGANESE ORE INDIA LTD. - APPELLANTS
VERSUS
STATE OF M.P. & ORS. - RESPONDENTS
Civil Appeal No. 2464 of 2016 (Arising out of S.L.P. (Civil) No. 9246 of 2012) With Civil Appeal Nos.2465-2467 of 2016 (Arising out of S.L.P. (Civil) Nos. 10643-10645 of 2012)
Decided On : 10-11-2016SUPREME COURT OF INDIA
DIPAK MISRA, SHIVA KIRTI SINGH, JJ.
MANGANESE ORE INDIA LTD. - APPELLANTS
VERSUS
STATE OF M.P. & ORS. - RESPONDENTS
Civil Appeal No. 2464 of 2016 (Arising out of S.L.P. (Civil) No. 9246 of 2012) With Civil Appeal Nos.2465-2467 of 2016 (Arising out of S.L.P. (Civil) Nos. 10643-10645 of 2012)
Decided On : 10-11-2016
For the Appellants :- T. G. Narayanan Nair, Advocate.
For the CA No. 2465-67 of 2016 :- Ms. Nandini Sen, Deba Prasad Mukherjee, Advocates.
For the Respondents:- B.S. Banthia, Amalpushp Shroti, Mishra Saurabh, Advocates.
IMPORTANT POINT
The Ferromanganese Alloy and copper concentrate involving manufacturing process cannot be treated under extended meaning of mines. Electricity cannot be levied at the same rate as on mines.
Headnote:(a) Madhya Pradesh Electricity Duty Act, 1949 – Section 3(1) and Table Part-B Item 4 (now item 3) – Processing of the mineral extracted from the mine – Processing has to be interpreted and understood with the associated words `crushing' and `treating' before and after – Noscitur a sociis – Applying a very broad and wide definition the term `processing' would include manufacture of a new or distinct product. – Would create and give rise to unacceptable consequences – Restricted meaning has to be given to word ‘processing’ – Process an manufacturing – Distinction – Word `processing' would take its meaning in the cognate sense of the words crushing, treating and transporting – General word `processing' will be restricted to the sense conveyed by the words `crushing', `treating' and `transporting' – It relates and signifies the composite activity of mining and processing – Held, `processing' would mean activities in order to make the mineral mined marketable, saleable and transportable, without substantially changing the identity of the mineral, as mined. (Para 18, 19, 20)
(1990) 3 SCC 447; (2004) 1 SCC 755; (2007) 6 SCC 429; (2006) 12 SCC 468; (2001) 7 SCC 525 – Relied upon
(1995) 4 SCC 603; (2004) 12 SCC 408; (2004) 10 SCC 201; 1985 (19) ELT 609; (2003) 9 SCC 534; MP No. 673/1993; (1972) 2 SCC 620 – Referred
AIR 1962 SC 1733; (1989) 3 SCC 698 : AIR 1990 SC 1664; (2008) 4 SCC 720; (2001) 6 SCC 260; (2001) 5 SCC 593 – Distinguished
(b) Words and Phrases – Mineral dressing/processing and manufacturing – Mineral dressing a subject matter of mineral processing – Manufacturing of an alloy a subject matter of metallurgy – Ore dressing does not change chemical identity of the mineral – Manufacturing of alloy changes chemical identity of the minerals. (Para 22)
(c) Madhya Pradesh Electricity Duty Act, 1949 – Section 3(1) and Table Part-B Item 4 (now item 3) – Copper concentrate – Obtained from the mineral by processes of pre-heating, drying and removal of volatiles, reduction of oxides, and smelting of the metal and slag – Resultant material a new and different commercial product – Not the mineral as mined. (Para 22)
(d) Madhya Pradesh Electricity Duty Act, 1949 – Section 3(1) and Table Part-B Explanation B, Table of rates – Ferro Manganese Plant – Appellant not crushing or processing or treating or manufacture of ferromanganese alloy – Cannot be treated within extended meaning of ‘mines’ – Appellant paying electricity duty at 40% for its Integrated Manganese Beneficiation Plant (IMB Plant) – Same rate cannot be applied for Ferro Manganese Plant. (Para 24, 28)
(2000) 1 SCC 549; (2001) 7 SCC 525; 2015 (6) Scale 137 – Relied upon
(e) Madhya Pradesh Electricity Duty Act, 1949 – Section 3(1) and Table Part-B Explanation B, Table of rates – The Ferromanganese Alloy an entirely different product from its mineral raw material – Both physically and chemically – Same is the case with copper concentrate – Tariff has to be levied as meant for manufacturing unit – Principle of noscitur a sociis applied. (Para 30, 31)
Facts of the case:
The controversy centres around interpretation of the terms "mineral" and "processing" under the definition of "mine" as defined under Explanation (b) of Part-B of Madhya Pradesh Electricity Duty Act, 1949.
Finding of the Court:
The Ferromanganese Alloy and copper concentrate involving manufacturing process cannot be treated under extended meaning of mines. Electricity cannot be levied at the same rate as on mines.
Result: Appeals allowed.
JUDGMENT :
Dipak Misra, J.
In this batch of appeals, by special leave, the appellants have assailed the legal tenability of separate orders dated 01.12.2011 passed in Writ Petition No. 9017 of 2010 which relates to the writ petition filed by Manganese Ore India Ltd. and M.P. No. 2821 of 1988, M.P. No. 3827 of 1993 and W.P. No. 3103 of 1994 preferred by Hindustan Copper Limited.
2. As the commonality of controversy centres around interpretation of the terms "mineral" and "processing" under the definition of "mine" as defined under Explanation (b) of Part-B of Madhya Pradesh Electricity Duty Act, 1949 (for brevity, "the Act"), we shall enumerate the scheme of the Act and the various litigations that have taken place and thereafter advert to the facts in each case. For brevity and to avoid repetition, we have initially referred to the litigation and different orders passed in the case of Hindustan Copper Limited.
3. The erstwhile Central Provinces and Berar Legislative Assembly had enacted the CP and Berar Electricity Duty Act, 1949 which was adopted in the State of Madhya Pradesh and has come to be known as the Madhya Pradesh Electricity Duty Act, 1949. The Preamble to the Act as amended by the State Legislature provides that it is an Act for the levy of duty on sale or consumption of electrical energy. Section 3(1) of the Act accordingly provides for levy of duty on sale or consumption of electrical energy. It stipulates that subject to the exceptions specified in Section 3-A, every distributor of electrical energy and every producer shall pay every month to the State Government at the prescribed time and in the prescribed manner a duty calculated at the rates specified in the table below on the units of electrical energy sold or supplied to a consumer or consumed by himself for his own purposes or for purposes of his township or colony, during the preceding month. The table to Section 3(1) prescribes different rates of duty depending for the purpose for which the electrical energy is sold. Part-B of the table provides for different rates of duty for the electrical energy sold, supplied or consumed for the purposes therein. Item 3 to the said table reads as follows:-
"3. Mines (other than captive 40 mines of cement industry)"
4. The numeral 40 comes under the heading `rate of duty as percentage of the electricity tariff per unit'. The Explanation (b) to Section 3(1) defines "mine" as under:-
"Explanation .-(b) "Mine" means a mine to which the Mines Act, 1952 (No. 35 of 1952) applies and includes the premises or machinery situated in or adjacent to mine and used for crushing, processing, treating or transporting the mineral."
5. It is necessary to state here that Hindustan Copper Limited had filed a Writ Petition to strike down the provision of Section 3 and the Table Part-B Item 4 (which is now Item No. 3 after 1995 amendment) and Explanation (b) which contains extended definition of mines as ultra vires the Constitution. As the factual matrix would reveal, the High Court dismissed the Writ Petition by placing reliance on State of M.P. v. Birla Jute Mfg. Co. Ltd., (1995) 4 SCC 603. The matter travelled to this Court which eventually formed the subject matter of Civil Appeal Nos. 3248-50 of 1998. A two-Judge Bench of this Court in Hindustan Copper Ltd. v. State of M.P. and others, (2004) 12 SCC 408 taking note of certain facts opined that the main controversy that was required to be examined by the High Court was as to how the word "mines" is to be understood as contained in clause (b) of the Explanation under Item 4 of the Table contained in Section 3 of the Act. This Court took note of the contentions of the appellant therein that the activities carried on by it do not fall within the meaning of the word "adjacent" area and further the approach of the respondents was selective and discriminatory. As the submissions raised were not dealt with by the High Court but it proceeded to dispose of the case without examining the facts in great
