IN THE APPELLATE TRIBUNAL FOR ELECTRICITY NEW DELHI (APPELLATE JURISDICTION)

APPEAL NO.83 OF 2019 Dated: 07.04.2022 Present: Hon’ble Mr. Justice R.K. Gauba, Officiating Chairperson Hon’ble Mr. Sandesh Kumar Sharma, Technical Member In the matter of:

HINDUSTAN PETROLEUM CORPORATION LIMITED Through The Dy.General Manager Mangalore Terminal Village Bala, Via Katipala, Mangalore – 575 030 …. Appellant(s)

VERSUS

1. KARNATAKA ELECTRICITY REGULATORY COMMISSION [Through its Secretary]

No.16, C-1, Millers Tank Bed Area, Vasanth Nagar, Bengalure-560052 Karnataka, India

2. CHAMUNDESHWARI ELECTRICITY SUPPLY CORPORATION LTD.

[Through its Managing Director]

No.29, Kaveri Grameena Bank Road, nd Hinkal, Vijaynagar, 2 Stage, Mysore-570 017 … Respondent(s)

Counsel for the Appellant (s) : Mr. Anand K. Ganesan Counsel for the Respondent (s) : Mr. Darpan K.M.

Ms. Amrita Sharma Mr. Rajat Jonathan Shaw for R-1 Mr. Sriranga Subbanna, Sr. Adv.

Ms. Sumana Nagand Ms. Medha M. Puranik Ms. GayathriSriram Mr. Sanjay Reddyfor R-2 J U D G M E N T (Oral)

PER HON'BLE MR. JUSTICE R.K. GAUBA, OFFICIATING CHAIRPERSON

1. This matter has been taken up by video conference mode on account of pandemic conditions, it being not advisable to hold physical hearing.

2. The Appeal is by Hindustan Petroleum Corporation Limited (HPCL), a public sector company, engaged in the business of marketing petroleum and petroleum products. It seeks to question the correctness, legality and propriety of the order dated 14.05.2018 passed by the Karnataka Electricity Regulatory Commission (KERC) on the petition for annual performance review for financial year (FY) 2017-18, revision of annual revenue requirement for FY 2019-20 and revision of retail supply tariff for FY 2019-20 of Respondent Chamundenshwari Electricity Supply Corporation Limited (CESCOM) to the extent thereby the activity in the nature of the petrol/diesel storage plant operated by the appellant was categorized as HT-2(b) for FY 2019-20, the result being that the appellant’s activities have been treated as commercial as against its claim that it should have been subjected to tariff for industrial category –

HT-2(a).

3. It appears when the petition of CESCOM was under consideration in response to the public notice that would have been issued and published, the appellant had submitted its objection on the above issue. It is appropriate to extract the following portion of the submission made by the appellant in the said objection petition:

“8. It is submitted that the activity involved at each stage includes the following:

a) Drawing the products for further distribution in bulk or wholesale;

b) Storage;

c) Packing in special containers or distribution in bulk or wholesale and also for usage of the consumers;

d) Blending of certain other products and doping of Kerosene oil for differentiating the same for domestic and commercial uses;

9. The tank at HPCL’s terminal are not meant for “storing” petrol/diesel products for days but for receiving the product from the pipeline and keep it their only for a few hours i.e. the time required for quantification of the product received. The product comes and goes out on a continuous basis and there is hardly any time left for the product to remain in the stored condition beyond a few hours.

10. I state that Hassan Terminal of HPCL is not a Petrol/Diesel and Oil storage plant rather it is a processing plant with petroleum pipeline project. The nature of activity carried at the Petitioner Corporation is purely an industrial activity which involves various processes detailed below as per the requirement of the Retailer:

I.Gasohol Product:As per Government of India norms, HPCL is required to blend 10% ethanol in petrol as a measure to reduce carbon emissions. Industrial Process involved for processing of Gasohol is Receipt of Motor Spirit thru Petroleum Pipe Line and procurement of following addictives:

A. Ethanol, B. Erganite C. Anti Oxidents These addictives are procured from outside agencies. These different addi