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Judgments of Supreme Court of India and High Courts

Bharti Airtel Ltd. & Ors vs Maharashtra Electricity … on 12 February, 2020

Judgment of Appeal No.337 of 2016 batch

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY
(Appellate Jurisdiction)

APPEAL NO. 337 OF 2016 IA NO. 730 OF 2016 IA NOS. 58, 711 951 OF 2017
APPEAL NO. 342 OF 2016 IA NOS. 750 751 OF 2016 IA NO. 199 OF 2018
IA No. 1176 OF 2019
APPEAL NO. 28 OF 2017 IA NOS. 28 30 OF 2017
APPEAL NO. 29 OF 2017 IA NOS. 42 44 OF 2017
APPEAL NO. 30 OF 2017 IA NOS. 755 756 OF 2016
APPEAL NO. 33 OF 2017 IA NOS. 62, 64 589 OF 2017
APPEAL NO. 57 OF 2017 IA NO. 102 OF 2017
APPEAL NO. 77 OF 2017
IA NOS. 207, 209 972 OF 2017, IA No.1259 OF 2018 IA No. 357 of 2019
APPEAL NO. 221 OF 2017 IA NOS. 456, 505 457 OF 2017
APPEAL NO. 353 OF 2017 IA NOS. 881, 882 883 OF 2017
APPEAL NO. 370 OF 2017 IA NOS. 980, 979 982 OF 2017
APPEAL NO. 394 OF 2017 IA NOS. 1091, 1092 1093 OF 2017
APPEAL NO. 236 OF 2018 IA NOS. 964, 963, 965 966 OF 2018
APPEAL NO. 237 OF 2018 IA NOS. 1074, 1073, 1075 1076 OF 2018
AND
APPEAL NO. 299 OF 2018 IA NOS. 1289, 1288 1290 OF 2018

Dated: 12th February, 2020

Present: Hon’ble Mrs. Justice Manjula Chellur, Chairperson
Hon’ble Mr. S.D. Dubey, Technical Member

APPEAL NO. 337 OF 2016 IA NO. 730 OF 2016
IA NOS. 58, 711 951 OF 2017

In the matters of:

Bharti Airtel Ltd.
The Authorised Signatory
Circle Office
Interface Building- 7,

Page 1 of 148
Judgment of Appeal No.337 of 2016 batch

7th Floor, Malad Link Road,
Malad (West), Mumbai- 400064
…. Appellant(s)
Versus
1. Maharashtra Electricity Regulatory Commission
World Trade Centre No.1, 13thFloor,
Cuffe Parade, Colaba,
Mumbai – 400 005

2. Maharashtra State Electricity Distribution Company Ltd.
Prakashgad, Plot No. G-9,
Bandra (East), Mumbai- 400051 …. Respondent(s)

Counsel for the Appellant(s) : Mr.Anand K. Ganesan
Ms.Swapna Seshadri
Counsel for the Respondent(s) : Mr. Buddy A. Ranganadhan
Ms.Stuti Krishn, Mr. Raunak Jain for R-1
Mr. Ravi Prakash, Mr. Samir Malik for R-2

APPEAL NO. 342 OF 2016
IA NOS. 750 751 OF 2016, IA NO. 199 OF 2018 IA No. 1176 of 2019

Tata Teleservices (Maharashtra) Ltd.
D-26, TTC Industrial Area,
MIDC Sanpada, P.O. Turbhe,
Navi Mumbai, Dist. Thane-400703 …. Appellant(s)

Versus
1. Maharashtra Electricity Regulatory Commission Ors.
World Trade Centre No.1, 13thFloor,
Cuffe Parade, Colaba,
Mumbai – 400 005

2. Maharashtra State Electricity Distribution Company Ltd
Prakashgad, Plot No. G-9,
Bandra (East), Mumbai- 400051

…. Respondent(s)
: Mr. Ajay Kumar
Page 2 of 148
Judgment of Appeal No.337 of 2016 batch

Counsel for the Appellant(s) Mr.Shailesh K. Kapoor
Ms.Suruchi Thapar

Counsel for the Respondent(s) : Mr. Buddy A. Ranganadhan
Ms.Stuti Krishn, Mr. Raunak Jain for R-1
Mr. R.S. Prabhu
Mr. Ravi Prakash, Mr. Samir Malik
Mr.G. Sai Kumar, Mr. Krishna Singh
Ms. Somya Saikumar for R-2
Mr.Sharat Kapoor Mr. K.R.Sasiprabhu for
Impleader

APPEAL NO. 28 OF 2017 IA NOS. 28 30 OF 2017

Idea Cellular Ltd.
5th Floor, Windsor, Off CST Road,
Near Vidyanagari, Kalina,
Santacruz(East), Mumbai- 400098 …. Appellant(s)
Versus
1. Maharashtra Electricity Regulatory Commission Ors.
World Trade Centre No.1, 13thFloor,
Cuffe Parade, Colaba,
Mumbai – 400 005
2. Maharashtra State Electricity Distribution Company
Prakashgad, Plot No. G-9,
Bandra (East), Mumbai- 400051
3. Torrent Power Ltd.
Torrent House, Ashram Road, Ahmedabad,
Gujarat – 380009 ….. Respondent(s)

Counsel for the Appellant(s) : Mr. Sudhir Makkar, Sr. Adv.
Mr. Raghav Pandey, Mr. Shamik Bhatt
Mr. Mahesh Agarwal

Counsel for the Respondent(s) : Mr. Buddy A. Ranganadhan
Ms.Stuti Krishn, Mr. Raunak Jain for R-1
Mr. Ravi Prakash, Mr. Samir Malik,
Mr.Varun Agarwal, Mr.Raheel Kohli

Page 3 of 148
Judgment of Appeal No.337 of 2016 batch

Mr. Nitish Gupta Ms. Rimali Batra for R-2

APPEAL NO. 29 OF 2017 IA NOS. 42 44 OF 2017

Vodafone India Ltd.
Peninsula Corporate Park, Ganpatrao Kadam Marg,
Lower Parel, Mumbai – 400013 …. Appellant(s)
Versus
1. Maharashtra Electricity Regulatory Commission
World Trade Centre No.1, 13thFloor,
Cuffe Parade, Colaba,
Mumbai – 400 005

2. Maharashtra State Electricity Distribution Company Ltd.
Prakashgad, Plot No. G-9,
Bandra (East), Mumbai- 400051 …. Respondent(s)

Counsel for the Appellant(s) : Mr. Raghav Pandey, Mr. Shamik Bhatt
Mr. Mahesh Agarwal Ms. Shally Bhasin

Counsel for the Respondent(s) : Mr. Buddy A. Ranganadhan
Ms.Stuti Krishn, Mr. Raunak Jain for R-1

Mr. Ravi Prakash, Mr. Samir Malik,
Mr.Varun Agarwal, Mr.Raheel Kohli
Mr. Nitish Gupta Ms. Rimali Batra for R-2

APPEAL NO. 30 OF 2017 IA NOS. 755 756 OF 2016 1312 OF 2019

1. Unitech Wireless (West) Pvt. Ltd. Anr.
The Authorised Signatory
Unit No. 302, World Trade Tower,
Barakhamba Lane, Connaught Place
New Delhi – 110001

2. Bharti Airtel Ltd.
The Authorised Signatory

Page 4 of 148
Judgment of Appeal No.337 of 2016 batch

Circle Office Interface Building- 7,
7th Floor, Malad Link Road,
Malad (West) Mumbai- 400064 ….Appellant(s)
Versus
1. Maharashtra Electricity Regulatory Commission
World Trade Centre No.1, 13thFloor,
Cuffe Parade, Colaba,
Mumbai – 400 005

2. Maharashtra State Electricity Distribution Company Ltd.
Prakashgad, Plot No. G-9,
Bandra (East), Mumbai- 400051 ….Respondent(s)

Counsel for the Appellant(s) : Mr. Shailesh K.Kapoor, Mr. Ajay Kumar
Ms. Suruchi Thapar

Counsel for the Respondent(s) : Mr. Buddy A. Ranganadhan
Ms.Stuti Krishn, Mr. Raunak Jain for R-1
Mr. Ravi Prakash, Mr. Samir Malik for R-2

APPEAL NO. 33 OF 2017 IA NOS. 62, 64 589 OF 2017

Vodafone Mobile Services Ltd.
C-48, Okhla Industrial Area Phase-II,
New Delhi- 110020 …. Appellant(s)
Versus
1. Maharashtra Electricity Regulatory Commission
World Trade Centre No.1, 13thFloor,
Cuffe Parade, Colaba,
Mumbai – 400 005

2. Maharashtra State Electricity Distribution Company Ltd.
Prakashgad, Plot No. G-9,
Bandra (East), Mumbai- 400051

…. Respondent(s)
Counsel for the Appellant(s) : Mr. Raghav Pandey, Mr. Shamik Bhatt
Mr. Mahesh Agarwal Ms. Shally Bhasin

Counsel for the Respondent(s) : Mr. Buddy A. Ranganadhan

Page 5 of 148
Judgment of Appeal No.337 of 2016 batch

Ms.Stuti Krishn, Mr. Raunak Jain for R-1

Mr. Ravi Prakash, Mr. Samir Malik,
Mr.Raheel Kohli
Mr. Nitish Gupta Ms. Rimali Batra for R-2

APPEAL NO. 57 OF 2017 IA NO. 102 OF 2017

1. Reliance Communication Ltd. Anr.
“H” Block, Dhirubhai Ambani Knowledge City,
Koparkhairne, Navi Mumbai- 400710

2. Reliance Infratel Limited
“H” Block, Dhirubhai Ambani Knowledge City, …. Appellant(s)
Koparkhairne, Navi Mumbai- 400710
Versus
1. Maharashtra Electricity Regulatory Commission
World Trade Centre No.1, 13thFloor,
Cuffe Parade, Colaba,
Mumbai – 400 005

2. Maharashtra State Electricity Distribution Company Ltd.
Prakashgad, Plot No. G-9,
Bandra (East), Mumbai- 400051
…. Respondent(s)
Counsel for the Appellant(s) : Mr. Hasan Murtaza Ms. Divya Anand

Counsel for the Respondent(s) : Mr. Buddy A. Ranganadhan
Ms.Stuti Krishn, Mr. Raunak Jain for R-1
Mr. Ravi Prakash, Mr.Raheel Kohli
Mr. Nitish Gupta Ms. Rimali Batra for R-2

APPEAL NO. 77 OF 2017
IA NOS. 207, 209 972 OF 2017, 1259 OF 2018 357 of 2019

1. ATC Telecom Infrastructure Pvt. Ltd. Ors. (ATC TIPL)
Plot 14-A, Sector 18,
Maruti Industrial Complex,
Gurgaon – 122015, Haryana

Page 6 of 148
Judgment of Appeal No.337 of 2016 batch

2. ATC Tower Company of India Ltd. (ATC TCI)
Unit No. 303-304, Mayfair Towers,
Pune-Mumbai Road, Wakdewadi,
Shivajinagar, Pune- 411005

3. ATC India Tower Corporation Pvt. Ltd. (ATC ITC)
Unit No. 303-304, Mayfair Towers,
Pune-Mumbai Road, Wakdewadi,
Shivajinagar, Pune- 411005

4. ATC Telecom Tower Corporation Pvt. Ltd. (ATC TTC)
Unit No. 303-304, Mayfair Towers,
Pune-Mumbai Road,Wakdewadi,
Shivajinagar, Pune-411005 … Appellant(s)
Versus

1. Maharashtra Electricity Regulatory Commission
World Trade Centre No.1,13thFloor,
Cuffe Parade, Colaba,
Mumbai – 400 005

2. The Maharashtra State Electricity Distribution Company Ltd.
Prakashgad, Anant Kanhekar Marg,
Plot No G-9, Bandra (East)
Mumbai-400051 …Respondent(s)

Counsel for the Appellant(s) : Mr. Ajay Kumar Mr. Shailesh K.Kapoor

Counsel for the Respondent(s) : Mr. Buddy A. Ranganadhan
Ms.Stuti Krishn, Mr. Raunak Jain for R-1

Mr. Ravi Prakash, Mr.Raheel Kohli
Mr. Nitish Gupta Ms. Rimali Batra for R-2

APPEAL NO. 221 OF 2017 IA NOS. 456, 505 457 OF 2017

Aircel Limited
Opus Centre, 47 Central Road,

Page 7 of 148
Judgment of Appeal No.337 of 2016 batch

Opposite Tunga Paradise MIDC, … Appellant(s)
Andheri East, Mumbai- 400 093
Versus
1. Maharashtra Electricity Regulatory Commission
World Trade Centre No.1, 13thFloor,
Cuffe Parade, Colaba,
Mumbai – 400 005

2.The Maharashtra State Electricity Distribution Company Ltd.
Prakashgad, Anant Kanhekar Marg,
Plot No G-9, Bandra (East)
Mumbai-400051 … Respondent(s)
Counsel for the Appellant(s) : Mr. Raghav Pandey, Mr. Shamik Bhatt
Mr. Mahesh Agarwal Ms. Shally Bhasin

Counsel for the Respondent(s) : Mr. Buddy A. Ranganadhan
Ms.Stuti Krishn, Mr. Raunak Jain for R-1
Mr. Ravi Prakash, Mr.Raheel Kohli
Mr. Nitish Gupta Ms. Rimali Batra for R-2

APPEAL NO. 353 OF 2017 IA NOS. 881, 882 883 OF 2017

1. GTL Infrastructure Ltd. Anr.
3rd Floor, “Global Vision”, ESII,
MIDC TTC Industrial Area,
Mahape, Navi Mumbai 400 710, Maharashtra

2. Chennai Network Infrastructure
The Assistant Manager
Door No. 34/1 DL, New No. 403/L, Samsom Tower,
7th Floor, Pantheon Road, Egmore, Tamilnadu
Chennai – 600008, … Appellant(s)
Versus
1. Maharashtra Electricity Regulatory Commission
World Trade Centre No.1, 13thFloor,
Cuffe Parade, Colaba,
Mumbai – 400 005

Page 8 of 148
Judgment of Appeal No.337 of 2016 batch

2. The Maharashtra State Electricity Distribution Company Ltd.
Prakashgad, Anant Kanhekar Marg,
Plot No G-9, Bandra (East) …Respondent(s)
Mumbai-400051

Counsel for the Appellant(s) : Mr.Sandeep Deshmukh
Mr.Vasim Siddiqui

Counsel for the Respondent(s) : Mr. Buddy A. Ranganadhan
Ms.Stuti Krishn, Mr. Raunak Jain for R-1
Ms.Rimali Batra Ms.Shruti Awasti for R-2

APPEAL NO. 370 OF 2017 IA NOS. 980, 979 982 OF 2017

Tower Vision India Pvt. Ltd.
Plot No. 356, UdyogVihar,
Phase-IV, Gurgaon-122015 …Appellant(s)
Versus
1. Maharashtra Electricity Regulatory Commission
World Trade Centre No.1, 13thFloor,
Cuffe Parade, Colaba, Mumbai – 400 005

2.The Maharashtra State Electricity Distribution Company Ltd.
Prakashgad, Anant Kanhekar Marg,
Plot No G-9, Bandra (East)
Mumbai-400051 …Respondent(s)

Counsel for the Appellant(s) : Mr. Ajay Kumar Mr. Shailesh K.Kapoor

Counsel for the Respondent(s) : Mr. Buddy A. Ranganadhan
Ms.Stuti Krishn, Mr. Raunak Jain for R-1

Ms.Rimali Batra Ms.Shruti Awasti for R-2

APPEAL NO. 394 OF 2017 IA NOS. 1091, 1092 1093 OF 2017

Indus Towers Limited
Bharti Crescent, 1 Nelson Mandela Road,
Vasant Kunj, Phase- II New Delhi- 110070 … Appellant(s)
Versus
Page 9 of 148
Judgment of Appeal No.337 of 2016 batch

1. Maharashtra Electricity Regulatory Commission
World Trade Centre No.1, 13thFloor,
Cuffe Parade, Colaba,
Mumbai – 400 005

2. The Maharashtra State Electricity Distribution
Company Ltd.
Prakashgad, Anant Kanhekar Marg,
Plot No G-9, Bandra (East)
Mumbai-400051 Respondent(s)

Counsel for the Appellant(s) : Mr. Raghav Pandey, Mr. Shamik Bhatt
Mr. Mahesh Agarwal Ms. Shally Bhasin

Counsel for the Respondent(s) : Mr. Buddy A. Ranganadhan
Ms.Stuti Krishn, Mr. Raunak Jain for R-1
Ms.Rimali Batra Ms.Shruti Awasti for R-2

APPEAL NO. 236 OF 2018 IA NOS. 964, 963, 965 966 OF 2018

M/s ASCEND Telecom Infrastructure Pvt. Ltd.
House No. 37-2, Plot No. 332, Mani Mansion,
Defense Colony Sainikapuri, Secunderabad- 500094 … Appellant(s)

Versus
1. Maharashtra Electricity Regulatory Commission
World Trade Centre No.1, 13thFloor,
Cuffe Parade, Colaba,
Mumbai – 400 005

2. The Maharashtra State Electricity Distribution Company Ltd.
Prakashgad, Anant Kanhekar Marg,
Plot No G-9, Bandra (East)
Mumbai-400051 Respondent(s)

Counsel for the Appellant(s) : Ms.Neha Bhatia

Counsel for the Respondent(s) : Mr. Buddy A. Ranganadhan
Ms.Stuti Krishn, Mr. Raunak Jain for R-1

Page 10 of 148
Judgment of Appeal No.337 of 2016 batch

Mr.Raheel Kohli , Mr. Varun Agarwal, Mr.
Nitish Gupta, Ms.Rimali Batra
Ms.Shruti Awasti for R-2

APPEAL NO. 237 OF 2018 IA NOS. 1074, 1073, 1075 1076 OF 2018

M/s Unity Telecom Infrastructure Ltd.
No. 46th 4th Floor, Free Press House
Free Press Journal Marg, Nariman Point … Appellant(s)
Maharashtra, Mumbai
Versus
1. Maharashtra Electricity Regulatory Commission
World Trade Centre No.1, 13thFloor,
Cuffe Parade, Colaba,
Mumbai – 400 005

2. The Maharashtra State Electricity Distribution Company Ltd.
Prakashgad, Anant Kanhekar Marg,
Plot No G-9, Bandra (East)
Mumbai-400051
… Respondent(s)

Counsel for the Appellant(s) : Mr. S. K. Nanda

Counsel for the Respondent(s) : Mr. Buddy A. Ranganadhan
Ms.Stuti Krishn, Mr. Raunak Jain for R-1
Ms.Rimali Batra for R-2

APPEAL NO. 299 OF 2018 IA NOS. 1289, 1288 1290 OF 2018

Airkonnect Networks Pvt. Ltd.
G4, Gera Plaza, Bund Garden Road
Pune-411 00 1 … Appellant(s)
Versus
1. Maharashtra Electricity Regulatory Commission
World Trade Centre No.1, 13thFloor,
Cuffe Parade, Colaba,
Mumbai – 400 005

Page 11 of 148
Judgment of Appeal No.337 of 2016 batch

2. The Maharashtra State Electricity Distribution Company Ltd.
Prakashgad, Anant Kanhekar Marg,
Plot No G-9, Bandra (East)
Mumbai-400051

… Respondent(s)
Counsel for the Appellant(s) : Ms.Kiran Singh
Mr.Amit Nagar

Counsel for the Respondent(s) : Mr. Buddy A. Ranganadhan
Ms.Stuti Krishn for R-1

Ms.Rimali Batra R-2

JUDGMENT

PER HON’BLE MR. S. D. DUBEY, TECHNICAL MEMBER

1. These Appellants herein questioning the legality, validity and propriety
of the impugned order dated 03.11.2016 passed by the Respondent
No. l (hereinafter referred to as the ‘State Commission’) in Case
No. 48 of 2016 relating to determination of Final True up for
Financial Year 2014-15, Provisional True up for Financial Year 2015-
16 and Multi­ Year Tariff Determination for the 3’d Control Period
Financial Year 2016-17 to Financial Year 2019-20. The
State Commission has, vide the impugned order, inter alia,
reclassified the industries using power for mobile/telecommunication
towers, etc., who were being charged under Industrial
category since 2004, into Commercial category, unless the
same are specifically included in the Information Technology
(hereinafter referred to as ‘IT’) and Information Technology Enabled

Page 12 of 148
Judgment of Appeal No.337 of 2016 batch

Services (hereinafter referred to as ‘!TES’) Policy of the
Government of Maharashtra for coverage under the Industrial
category.

2. Brief Facts of the case(s):

The brief facts of the case(s) are as follows:-

2.1 The Appellants in the batch of Appeals are incorporated under the
provisions of the Companies Act, engaged in the business of
telecommunications which provides voice and data services to end
customers.

2.2 Mahrarashtra Electricity Regulatory Commission (Respondent
Commission/ State Commission) is the Electricity Regulatory
Commission for the State of Maharashtra exercising jurisdiction and
discharging functions in terms of the Electricity Act, 2003.
2.3 Other Respondents are the distribution licensees and transmission
companies operating in the State of Maharashtra and are Government
of Maharashtra undertakings.

3. QUESTIONS OF LAW

The following questions of law have been raised in the batch of
appeals:-

3.1 Whether the State Commission is justified in changing the categorisation
of the Mobile Towers from Industrial Category to Commercial Category
for towers not falling within Government of Maharashtra Policy on
IT/ITES?

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Judgment of Appeal No.337 of 2016 batch

3.2 Whether the registration certificate under Government of Maharashtra
Policy is a relevant consideration and criteria for categorization of mobile
towers?

3.3 Whether the nature of activity of mobile towers would change to
commercial activity for the only reason of not being registered under the
Government of Maharashtra Policy on IT/ITES?

4 All the above Appeals arise from the Common Order dated
03.11.2016 (Impugned Order) passed by the Maharashtra
Electricity Regulatory Commission in Case No. 48 of 2016 and the
issues involved in all these appeals are common in nature,
therefore, we decide to adjudicate the batch of appeals by a
common judgment.

5. Learned Counsel, Mr. Anand K. Ganesan appearing for the
Appellant has made following arguments/ submissions in Appeal
No. 337 of 2016 for our consideration:-

5.1 In the Impugned order the State Commission has for the first time
purported to clarify and hold since the year 2008, the Mobile and
Broadcasting Towers of the Telecommunication will fall under the
Industrial Category only if the same is covered under the Government of
Maharashtra Policy on IP/ITEL and not otherwise.

5.2 The above has been done abruptly and contrary to the fact that the
State Commission had for more than 10 years consistently held in the
Tariff orders decided that Mobile and Broadcasting Towers is to be

Page 14 of 148
Judgment of Appeal No.337 of 2016 batch

classified under the Industrial Category for the purpose of retail supply
tariff specifically stating that the State Commission will not get into the
classification of such towers by the Government of Maharashtra Policy.
Contrary to the above the State Commission has purported to clarify that
only if the Mobile/Broadcasting Towers are registered under the
Government of Maharashtra Policy on IT/ITES would they be covered
under the Industrial Category.

5.3 The Appellant is engaged in the business of Telecommunication
providing voice and data service in 23 circles in India. Such services are
provided by the Appellant throughout India through Mobile Towers/Cell
Sites which broadly comprise of Antenna Based Trans Receiver Station,
Feeder Cable and Microwave Radio Equipment besides land, tower
shelter, air conditioning equipment, diesel generator, battery electrical
supply equipment etc. The Appellant’s business is a public utility service.

5.4 The Appellant and other similarly placed entities were consistently
categorised under the Industrial Category in the following orders:

(a) Tariff Order dated 17/08/2009 in Case No. 116 of 2008 relating to
the year 2009-10. The relevant extract of the said Order is
reproduced below:

“As regards MSEDCL’s proposal to classify certain telecom towers, etc.,
under commercial category, irrespective of whether they were covered
under the IT ITES Policy of the Government of Maharashtra, no
rationale has been submitted by MSEDCL for this specific proposal. The
Commission had consciously included IT and IT enabled Services (IT
ITES) under industrial category (HT and LT as applicable) in the Tariff
Order for the erstwhile MSEB in 2004. Since then, the IT ITES
category continues to be charged under industrial tariffs. In the existing

Page 15 of 148
Judgment of Appeal No.337 of 2016 batch

Tariff Schedule of MSEDCL as well as the approved Tariff Schedule for
the distribution licensees in Mumbai issued in June 2009, the
Commission has included IT ITES category under industrial category.
Hence, the Commission does not agree with MSEDCL’s proposal
in this regard and rules that IT ITeS will be charged at industrial
rates (HT and LT rates, as applicable), without getting into the
details of whether mobile towers and commercial broadcasting
towers and all other similar activities are covered under the
Government of Maharashtra Policy on IT ITeS.”

(emphasis supplied)

(b) Order dated 12/10/2010 in which the State Commission reiterated its
views in tariff order dated 07/08/2009 regarding categorization of mobile
towers under the Industrial Category held as under:

“The Commission had consciously included IT and IT enabled Services
(IT ITeS) under industrial category (HT and LT as applicable) in the
Tariff Order for the erstwhile MSEB in 2004. Since then, the IT ITeS
category continues to be charged under industrial tariffs. In the existing
Tariff Schedule of MSEDCL as well as the approved Tariff Schedule for
the distribution licensees in Mumbai issued in June 2009, the
Commission has included IT ITeS category under industrial, as
reproduced below:

“5. LT V: LT- Industrial Applicability,
Applicable for industrial use at LT voltage, excluding Agricultural
Pumping Loads. This Tariff shall also be applicable to IT Industry IT
enabled services (as defined in the Government of Maharashtra
policy).”

“1. 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
to IT Industry IT enabled services (as defined in the Government of
Maharashtra policy).”

In view of the above, the Commission rules that IT ITeS will be
charged at industrial rates (HT and LT rates, as applicable),
without getting into the details of whether mobile towers and
commercial broadcasting towers and all other similar activities
are covered under the Government of Maharashtra Policy on IT
ITeS.”

(emphasis supplied)

(c) Tariff Order dated 16/09/2012, the State Commission categorised
the Mobile Towers under HT-II Commercial Category instead of
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Judgment of Appeal No.337 of 2016 batch

HT-I Industrial Category. This Order was challenged before this
Tribunal. By order datted 7.11.2012 passed in Appeal Nos 234,
235 etc. of 2012, the Order of the State Commission was set aside
with the following decision:

10. As indicated by the Learned Counsel for the Appellants, Mobile
Towers, etc., prior to passing of the impugned order were categorized
under the Industrial category and in fact the State Commission in the
tariff order for the FY 2009-10, rejected the specific proposal of the
distribution licensee for change in category from Industrial to
Commercial.

11. Despite this, the impugned order dated 16.8.2012 has been
passed by the State Commission changing the consumer category of
the Appellants into Commercial without any discussion or reasonings
and without hearing the Appellants. Thus, we notice that the principles
of natural justice have been violated in the present case.

12. We, therefore, deem it fit to set aside the portion of impugned order
dated 16.8.2012 regarding re-categorisation of Mobile Towers, Micro
Wave Towers, Satellite Antennas used for communication activity to
HT/LT Commercial Category from HT/LT Industrial Category prevailing
prior to the date of the impugned order. Accordingly the same is set
aside.

13. However, the distribution licensee (R-2) is given liberty to file a
fresh petition containing the proposal regarding re-categorisation of the
Appellants in appropriate tariff category before the State Commission
which in turn shall consider the same and pass the appropriate orders
in accordance with law after hearing all the concerned parties.

(d) Subsequent to the above decision dated 07.11.2012 of the
Tribunal, the distribution licensee issued a circular dated
15.12.2012 placing the Mobile Towers under the Industrial
Category; Further, there was no proposal of the distribution
licensee for change in categorisation from Industrial to
commercial.

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Judgment of Appeal No.337 of 2016 batch

(e) Order dated 26.6.2015 passed by the State Commission in regard
to MYT 2013-14 to 2015-16, inter alia, holding as under:

24.4 The Commission, in its Order in Case No. 116 of 2008 dated
August 17, 2009, had discussed the categorisation of Mobile Towers in
detail as follows:

“As regards MSEDCL’s proposal to classify certain telecom towers,
etc., under commercial category, irrespective of whether they were
covered under the IT ITES Policy of the Government of Maharashtra,
no rationale has been submitted by MSEDCL for this specific proposal.
The Commission had consciously included IT and IT enabled Services
(IT ITES) under industrial category (HT and LT as applicable) in the
Tariff Order for the erstwhile MSEB in 2004. Since then, the IT MYT
Order of MSEDCL for the period from FY 2013-14 to FY 2015-16 Case
No. 121 of 2014 Page 247 of 381 ITES category continues to be
charged under industrial tariffs. In the existing Tariff Schedule of
MSEDCL as well as the approved Tariff Schedule for the distribution
licensees in Mumbai issued in June 2009, the Commission has
included IT ITES category under industrial category. Hence, the
Commission does not agree with MSEDCL’s proposal in this regard
and rules that IT ITeS will be charged at industrial rates (HT and LT
rates, as applicable), without getting into the details of whether mobile
towers and commercial broadcasting towers and all other similar
activities are covered under the Government of Maharashtra Policy on
IT ITeS.”

The Commission is of the view that the rationale and ruling of its
earlier Order in Case No. 116 of 2008 should continue to apply. In
other words, the Industrial tariff will apply to Mobile Towers or
other activities cited by MSEDCL only if they are covered as IT/
ITES and the provisions of GoM’s Policy apply to them.

(Emphasis Supplied)

5.5 Even under the above order, the Mobile/Broadcasting towers were
classified only as Industry and the classification was not changed to
Commercial. The above order was understood and implemented to
maintain the same position as was prevalent in the past. The monthly
bills raised by the distribution licensee placed the Mobile/Broadcasting
towers only under the Industrial Category without going into the issue

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whether they are covered by the Government of Maharashtra Policy or
not.

RE: THE STATE COMMISSION HAS ERRED IN CHANGING THE
CLASSIFICATION WHICH WAS PREVALENT OVER THE YEARS

5.6 Till the passing of the impugned order, the distribution licensee had duly
understood and implemented the tariff orders as categorising the Mobile
and broadcasting towers under the Industrial category. There was no
doubt whatsoever on the interpretation and application of the tariff
orders over.

5.7 It is not open to the licensee or the State Commission to now claim that
the interpretation and application of the tariff orders prior to the
impugned order are different. Reference in this regard may be hand to
the decision of the Hon’ble Supreme Court in the case of Indian Metals
and Ferro Alloys v. Collector of Central Excise, 1991 Supp (1) SCC 125,
(para 14 and 15), which reads as under:

“14. However, even assuming that there could have been some doubt as
to the intention of the legislation in this regard, the matter is placed
beyond all doubt by the revenue’s own consistent interpretation of the
item over the years. It has been pointed out that prior to March 1, 1975,
residuary Item 68 was not in the schedule. If the revenue’s contention that
these poles are not pipes and tubes is correct then they could not have been
brought to duty at all before March 1, 1975. But the fact is that transmission
poles have been brought to duty between 1962 to 1975, and that could only
have been under Item 26-AA (for there was no residuary item then). This is
indeed proved by the fact that this very assessee was thus assessed initially
and also by the issue of notifications of exemption from time to time which
proceed on the footing that these poles were assessable to duty under Item
26-AA but were entitled to an exemption if certain conditions were fulfilled.
Indeed, the assessee also applied for and obtained relief under one of those
exemption notifications since 1964.

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15. It is contended on behalf of the department that this earlier view of the
department may be wrong and that it is open to the department to contend
now that the poles really do not fall under Item 26-AA. In any event, it was
submitted since the poles were exempted from duty under one notification or
other, it was not very material prior to March 1, 1975 to specifically clarify
whether the poles would fall under Item 26-AA or not. This argument
proceeds on a misapprehension. The revenue is not being precluded
from putting forward the present contention on grounds of estoppel.
The practice of the department in assessing the poles to duty (except in
cases where they were exempt as the condition in the exemption
notifications were fulfilled) and the issue of notifications from time to
time (the first of which was almost contemporaneous with the insertion
of Item 26-AA) are being relied upon on the doctrine
of contemporaneoexpositio to remove any possible ambiguity in the
understanding of the language of the relevant statutory instrument:
see K.P. Varghese v. TTO [(1981) 4 SCC 173 : 1981 SCC (Tax) 293 : (1982)
1 SCR 629] , State of Tamil Nadu v. Mahi Traders[(1989) 1 SCC 724 : 1989
SCC (Tax) 190 : (1989) 1 SCR 445] , CCE v. Andhra Sugar Ltd.[1989 Supp
(1) SCC 144 : 1989 SCC (Tax) 162] and Collector of Central Excise v. Parle
Exports P. Ltd. [(1989) 1 SCC 345 : 1989 SCC (Tax) 84] Applying the
principle of these decisions, that a contemporaneous exposition by the
administrative authorities is a very useful and relevant guide to the
interpretation of the expressions used in a statutory instrument, we think the
assessee’s contention that its products fall within the purview of Item 26-AA
should be upheld.”

5.8 Thus, the State Commission has consciously with full application of mind
and consistently categorised the Mobile Towers and Broadcasting
Towers under HT-I Industrial Category for the purpose of retail supply
tariff to be charged from the Appellant under the Tariff Orders issued by
the State Commission. The above categorisation of Mobile/Broadcasting
Towers was on the clear premise that the classification under the
Electricity Act is not governed by the classification adopted by the State
Government under its Policy regarding incentivisation of specific
industries and such classification by the State Government is not a
determinative test for tariff classification under the Electricity Act.

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5.9 The State Government policy on IT/ITES does not deal with electricity
classification at all, neither can the State Government deal with the issue
of electricity classification.

5.10 The change in the stand taken by the State Commission after
consistently holding to the contrary from 2008, is hit by the principles of
stare decisis. In number of decisions of the Hon’ble Supreme Court, it
has been held that a Judge made change in law rarely takes place when
the law is clearly settled.

5.11 In the case of Shankar Raju v Union of India, (2011) 2 SCC 132
9(Para 10 to 17)it has been held that “the doctrine of stare decides is
expressed in the maxim stare decisis et non quieta movere, which
means “to stand by decisions and not to disturb what is settled”…..The
underlying logic of this doctrine is to maintain consistency and avoid
uncertainty. The guiding philosophy is that a view which has held the
field for a long time should not be disturbed only because another view
is possible”

5.12 It has been held by the Hon’ble Supreme Court that a long-standing
view should ordinarily be adhered to and not disturbed. In Rajarai
Pandey v Sant Prasad Tiwari, (1973) 2 SCC 35 ((Para 10), the
Hon’ble Supreme Court held that a decision of long standing on the
basis of which many persons will in the course of time have arranged
their affairs should not likely be disturbed by a superior court not strictly
bound itself by the decision. A different view would not only introduce an
element of uncertainty and confusion, it would also have the effect of

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unsettled transaction which might have been entered into in faith of
these decisions.

5.13 In Mishrilal v Virendranath (1999) 4 SCC 11(Para 16) it was held that
“Taking recourse to the doctrine would be an imperative necessity to
avoid uncertainty and confusion. The basic feature of law is its certainty
and in the event of there being uncertainty as regards the state of law —
the society would be in utter confusion the resultant effect of which
would bring about a situation of chaos — a situation which ought always
to be avoided. ”

5.14 Reference may also be made to the cases of Union of India v Azadi
BachaoAndolan (2004) 10 SCC 1, para 33and 34; (b)State of Gujarat
v Mirzapur Moti Kuresh(2005) 8 SCC 534 Para 111; and Maganlal
Chaganlal v Municipal Corporation of Greater Bombay (1974) 2
SCC 402(Para 22).

5.15 In terms of the above, when the State Commission has since the year
2008 taken a conscious view that the Mobile/Broadcasting Towers
would be placed under the Industrial category without going into whether
they would fall under the Government of Maharashtra Policy or not, the
said position has held forth for a very long time namely more than 10
years and there is no change whatsoever in the factual or legal position,
the above principle of law applies squarely.

5.16 The scope, purpose and objective of the classification by the State
Government under the IT/ITES Policy of the State Government is
distinct and separate as compared to the tariff classification under the
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Electricity Act for the purpose of retail tariff to be undertaken by the
State Commission. In the earlier years, there was no proposal even for
classification of Mobile/Broadcasting Towers under a category other
than the HT Industrial.

5.17 It is also a well settled principle that a consistent practice followed
should not be changed. Reference in this regard may be made to the
decision of the Hon’ble Supreme Court in Indian Metal and Ferro
Alloys Ltd v Collector of Central Excise 1991 SUPP (1) SCC 125.

5.18 This has also been reiterated by the Tribunal in the case of Spencers’
Retail Limited v MERC, Appeal No. 146 of 2007 decided on
19.12.2007, that regulatory certainty is to be maintained and there
should not be any increase in cross-subsidy in the system.

5.19 Even in cases of tax where the principle of res judicata does not apply, a
view taken over the years, in the absence of any change in the factual or
legal position, has been held to be binding which cannot be changed in
the future. In this regard, the Hon’ble Supreme Court in the case of
Radhasoami Satsang, v. Commissioner of Income Tax, (1992) 1
SCC 659 has held as under:

“16. We are aware of the fact that strictly speaking res judicata does not
apply to income tax proceedings. Again, each assessment year being a unit,
what is decided in one year may not apply in the following year but where a
fundamental aspect permeating through the different assessment years has
been found as a fact one way or the other and parties have allowed that
position to be sustained by not challenging the order, it would not be at all
appropriate to allow the position to be changed in a subsequent year.

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17. On these reasonings in the absence of any material change justifying the
Revenue to take a different view of the matter — and if there was no change
it was in support of the assessee — we do not think the question should have
been reopened and contrary to what had been decided by the Commissioner
of Income Tax in the earlier proceedings, a different and contradictory stand
should have been taken. We are, therefore, of the view that these appeals
should be allowed and the question should be answered in the affirmative,
namely, that the Tribunal was justified in holding that the income derived by
the Radhasoami Satsang was entitled to exemption under Sections 11 and 12
of the Income Tax Act of 1961.”

5.20 The above applies on all fours to the present case. When the State
Commission has given a dispensation for all these years and fully
accepted by the licensee, there being no change in the factual or legal
position, there was no occasion for the State Commission to hold to the
contrary.

5.21 Interestingly, the contention of the State Commission and MSEDCL in
the present appeal are contradictory. It is the contention of the State
Commission that there has been no change in the position since the
year 2008 and it is MSEDCL which has erred in levy of industrial tariff
over these years. This contention is also erroneous for the following
reasons:

(a) The clear wordings of the Orders since 2008 is that telecom
towers are under industrial category, irrespective of whether they
are covered by the Government of Maharashtra Policy;

(b) In the year 2012, when the category was sought to be changed to
commercial, the position stated before the Tribunal was that the
telecom towers are industrial earlier. There was no contention that

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only the towers registered under the Government of Maharashtra
Policy would be industrial.

(c) MSEDCL has specifically proposed classification to commercial
earlier, which was rejected.

5.22 As against the contention of the State Commission, MSEDCL has
sought to contend that there should be a shift from the previous
decisions and the telecom towers should not be classified as
commercial.

RE: STATE COMMISSION BY CHANGE OF CLASSIFICATION
CANNOT ACHIEVE WHAT CANNOT BE DONE DIRECTLY

5.23 The Telecom Towers were classified under the Industrial category and
charged the tariff for the industrial category, prior to the passing of the
impugned order. The industrial category is a subsidizing category and
pays tariff higher than the cost of supply.

5.24 The mandate under the Electricity Act in Section 42(2) – Proviso is to
reduce the cross-subsidy over the years. The National Tariff Policy also
provides that the cross-subsidies should not be increased, but gradually
reduced. Therefore, the State Commission could not have increase the
cross-subsidy and tariff for the industrial category of consumers, as this
would be hit by the principles and provisions of the Electricity Act.

5.25 To get over the above restriction, the State Commission has changed
the category of the telecom towers, thereby increasing the tariff payable
by the telecom towers and consequently the cross-subsidy contribution.

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This has been done indirectly by change of classification, which could
not have been done directly by increasing the tariff.

5.26 The change in classification by the State Commission is hit by the basic
principle of law that what cannot be done directly cannot be sought to be
done indirectly. There is no other rationale for change in classification
and increase in tariff at this stage, except to increase the tariff for the
telecom towers, which is erroneous.

RE: CLASSIFICATION UNDER SECTION 62(3) OF THE
ELECTRICITY ACT, 2003

5.27 The classification of electricity consumers is provided for in Section
62(3) of the Electricity Act, which reads as under:

“(3)The Appropriate Commission shall not, while determining the tariff under
this Act, show undue preference to any consumer of electricity but may
differentiate according to the consumer’s load factor, power factor, voltage,
total consumption of electricity during any specified period or the time at
which the supply is required or the geographical position of any area, the
nature of supply and the purpose for which the supply is required.”

5.28 Firstly, Section 62(3) of the Electricity Act exhaustively provides for the
criteria for classification of consumers. There is no residuary criteria of
classification on factors as deemed fit by the State Commission, but the
classification can only be based on the specified criteria. This is unlike
Section 49 of the Electricity (Supply) Act, 1948 which provided for a
residuary provision for classification of consumers.

5.29 Therefore, under the Electricity Act, classification of consumers such as
new industries and old industries is not permissible. The contention of

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the Respondents that the nature and purpose of supply would cover the
classification in question is misconceived.

5.30 Irrespective of whether there is registration under the State Policy, the
nature of the activity of the telecom towers remains the same. There is
no change either way.

5.31 Similarly, the purpose for which the supply is required is also the same,
namely, telecom towers. The registration under the State Policy is also
irrelevant for considering the purpose of supply.

5.32 Therefore, the criteria in the impugned order that telecom towers
registered under the State Government policy would be classified as
Industry and other telecom towers would be classified as commercial is
contrary to Section 62(3) of the Electricity Act and is bad in law. The
nature of activity and purpose of supply being the same, all the telecom
towers are entitled to the industrial categorisation, as earlier.

5.33 It is well settled that there has to be a rationale for classification under
Section 62 (3) of the Electricity Act, 2003. This Tribunal has set aside
the categorisation of Mumbai Airport under HT – II Commercial Category
considering the nature of service rendered by the Airport (Reference
Mumbai International Airport Pvt Limited v MERC Appeal No. 195 of
2009 decided on 31.5.2009). Similarly, hospitals have been held to be
not falling under HT Commercial Category (Association of Hospitals v
MERC Appeal No. 110/2009 decided on 20.10.2011).

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5.34 In the present case, there has been no change either in the factual or
legal position from 2009 till date when the electricity classification for the
Mobile/Broadcasting Towers has been on Industrial basis.

RE: BASIS OF INDUSTRIAL OR COMMERCIAL CATEGORISATION

– SECTION 62(3)

5.35 The Section 62(3) does not provide for industrial or commercial
categorisation in itself. The decision on which consumers would fall
within industrial or commercial classification is a judicious discretion to
be exercised by the State Commission.

5.36 Firstly, it is for the State Commission to create categories with the
nomenclature of industry, commercial, mixed load consumers, non-
residential consumers, public utility consumers etc. The nature of the
consumers who fall within each particular category is to be specified by
the State Commission, subject to the condition that similarly placed
consumers ought to fall within the same category.

5.37 For example, the basis of classification of consumers in industrial
category or commercial category in one state could be based on
manufacture. If the process involved amounts to manufacture, the
consumers could be classified as industry, otherwise as commercial.

5.38 However, other State Commissions may have different basis for
classification of consumers as industrial or commercial. Like in the
present case, the basis of classification by the State Commission of
Industrial consumers is not on manufacture.

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5.39 The reliance by the Respondents on the decision in the case of BSNL
Ltd is misconceived. The issue that was raised was whether telecom
activity amounts to manufacture or service, which was decided to be not
manufacture. However, the issue whether would be Industry or not is not
dependent upon whether the activity amounts to manufacture. The
decision in the said case was only on the touchstone of manufacture,
which does not arise in the present case.

5.40 The Respondents have further contended the Tribunal has previously
held Telecom Towers to be “commercial” in two different Judgments. In
this regard, the reliance on these Judgments by the Respondents is
misplaced. The Judgments relied on by the Respondents were from
different State Commissions, wherein the criteria for Industrial Tariff was
Manufacture.

5.41 While certain State Commission have made “Manufacture” as the pre-

requisite for being Industrial, the Maharashtra State Commission does
not adhere to this requirement. The activity being manufacture is not a
precondition for the applicability of the industrial tariff.

5.42 In fact, in the impugned order, the State Commission has categorized
many activities such as cold storages, LPG/CNG bottling plants etc. to
be industrial, which are clearly not manufacturing activities.

5.43 Further, in the impugned order, the State Commission has itself
recognised that the telecom sector amounts to industrial activity. It is not
that all Mobile/Broadcasting Towers are categorised as commercial. The

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only criteria for the differentiation by the State Commission is the
registration under the IT/ITES Policy of the Government of Maharashtra.
This is misconceived for the purposes of electricity classification, for the
following reasons:

(a) The classification is based on the nature of the activity and the
purpose for use of the electricity, which is not affected by
registration under the Government of Maharashtra Policy.

(b) The nature of the activity, whether registered under the
Government of Maharashtra Policy or not continues to be the
same. It is this nature of activity that governs the classification
under Section 62(3) of the Electricity Act.

5.44 The Appellant is registered under the IT/ITES Policy. Sample
certificates have been produced with the rejoinder of the Appellant.
What the distribution licensee is now insisting is a separate certificate for
each of the 18000 odd towers of the Appellant and in the absence of
certificate for each tower, the classification would be on commercial
basis. This principle is misconceived and is liable to be set aside.

5.45 Without prejudice to the submissions made hereinabove even one
certificate of registration under the IT/ITES Policy is sufficient for the
classification of Mobile/Broadcasting Towers as Industrial category. It
will be preposterous to either require each tower to obtain registration so
as to get classified as industrial category for the purpose of electricity
Tariff or to say that one tower which is registered shall be classified and
another Tower of the same company which is not registered will fall
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under different category. What is important is that there is recognition
under the Government of Maharashtra Policy also that
Mobile/Broadcasting Towers is classifiable as Industrial category.

5.46 In view of the above, the primary contention of MSEDCL that Telecom
Towers do not fall under IT ITES services does not sustain. MSEDCL
has sought to rely on certain definitions of IT Hardware and IT Software
under the 2015 IT ITES Policy to argue that Telecom Towers do not
fall under IT/ITES, but only perform the function of transporters of
information. The contention in this regard is completely misconceived.
Not only is the 2015 IT/ITES Policy of the Govt. of Maharashtra not
relevant for the purpose of this Appeal, the reliance on the 2015 Policy is
also contrary to the submission of the submission of the Respondents
that the same view has consistently been taken by the State
Commission since 2008.

RE: TELECOM HAS INFRASTRUCTURE STATUS AND IS TO BE
CONSIDERED AS INDUSTRY

5.47 Even independent of the previous decisions of the State Commission,
the telecom sector cannot be termed to be commercial but has industrial
status having been accorded infrastructure status.

5.48 All the decisions relied on by the Respondents, apart from being on a
different basis of classification by the State Commission for industrial
consumers, are prior to 2013. The Government of India has, since the
year 2012 and 2013 given particular focus to the telecom sector and has
given infrastructure industry status.

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5.49 The mobile communication is the back bone of the economy and has
been instrumental in the economic development of the country. This
includes both for voice communication as well as data communication.
The mobile and data tariffs in the country is the lowest in the world. This
is primarily in view of the infrastructure status granted by the
Government of India and considering the telecom industry as a primary
sector for development in the country.

5.50 The legal provisions in this regard are as under:

(a) DEPARTMENT OF TELECOMMUNICATIONS – ADVISORY
GUIDELINES FOR STATE GOVERNMENTS FOR ISSUE OF
CLEARANCE FOR INSTALLATION OF MOBILE TOWERS
(Effective from 01.08.2013)

“B. Action by State government/Local body
………………

III. Telecom towers have been give infrastructure status by
Government of India vide gazette notification no. 81 dated
28.03.2012. All benefits, as applicable to infrastructure industry,
should be extended. Electricity connection may be provided to
BTS site on priority

(b) Ministry of Finance (Department of Economic Affairs)
(Infrastructure Section) Notification dated 27/03/2012

Harmonised Master List of infrastructure sub-sectors

………………..

4. Communication • Telecommunication (Fixed network)
• Telecommunication towers

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5.51 The National Telecom Policy, 2012 notified by the Government of India,
inter-alia, provides as under:

“III. OBJECTIVES

23. Recognize telecom as Infrastructure Sector to realize true
potential of ICT for development.”

5.52 The National Telecom Policy of 2012 also recognises
telecommunication for socio economic development of the country. The
telecom sector is a public utility service under Section 22 A (b) of the
Legal Services Authorities Act, 1987. Telecom services are essential
services under Section 2 (a) (i) of the Essential Services Maintenance
Act, 1968 and Section 2 (n) of the Industrial Disputes Act, 1947.

5.53 In the circumstances mentioned above, there can be no doubt of the
industrial status of the telecom towers. Even de-hors the past practice of
the State Commission to classify the telecom towers as industrial, the
telecom towers in line with the legal position and the Government of
India policies, would fall within the industry definition and ought to be
treated under the industrial category for electricity tariff classification.

5.54 In the circumstances, the impugned order to the extent it treats certain
telecom towers as commercial is bad in law and is laible to be set aside.
The telecom towers ought to be treated under the industrial category for
the purpose of electricity classification.

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6. Learned Counsel, Mr. Shailesh Kumar appearing for the .

Appellant in Appeal No. 342 of 2016, 30 of 2017, 57 of 2017, 77 of
2017, 370 of 2017 has made following arguments/ submissions
for our consideration:-

Factual:

6.1 The mobile telecommunication network of the Appellant comprising of
Mobile Towers, Base Station Controllers and Mobile Switching Centers
is a computer network. These installations and the value added mobile
telecommunication and data/internet services derived from the operation
of the same come under the field of IT/ITeS. Purpose of use of electricity
by such installation is therefore for purpose of IT/ITeS.

6.2 The operation of the said telecommunication network and its aforesaid
installations are otherwise also in the nature of an industrial activity
involving usage of electricity for the purposes of processing voice and
data signals for the purpose of receiving, transmitting and delivering the
same.

6.3 The above said installation and operations of the appellant are also
included under the definition of IT/ITeS under the IT/ITeS policy of the
State of Maharashtra. Under the said policy the State of Maharashtra
declared that IT and ITES Units will be entitled for supply of power at
industrial rates under the MERC tariff orders and that these units will be
categorized as a separate group of consumers through the MERC. The
Respondent No 2 has never disputed this position before the
Respondent No 1 Commission till date.

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6.4 Accordingly the Mobile Towers and related installations of the Appellant
have been included under the industrial category of tariff under the tariff
schedules of the Respondent No. 2 as approved under various tariff
orders passed by the Respondent No. 1 State Commission from time to
time since 2004 by treating these as industrial activities in the nature of
IT/ITeS.

6.5 MERC passed an Order dated 10.03.2004 in case No. 2 of 2004 (Ref
Pg. No. 3 of Reply of MERC) referring to the IT/ITES policy announced
by the Government of Maharashtra and the stated philosophy of the
commission in its previous orders. MERC thereby included IT Industry
and IT enabled Industry (as defined in the Government of Maharashtra
Policy of the year 2003) in the Industrial Category. The Commission
however, did not agree to create a separate new category for IT/ITES
Sector. The IT/ITES policy 2003 was examined by the MERC under the
said order only and the categorization and the categorization was made
by adopting the definition of IT/ITES stated in the said policy. Since then
Industrial Tariff has been applied to IT/ITES including Mobile Towers.

6.6 The State Commission has repeatedly rejected the change proposal
initiated by the respondent No. 2 for conversion of the tariff category
applicable to Mobile Towers and related installations from industrial to
commercial since 2009. The Change was sought on the ground that the
activities were to be considered commercial as these were done with
profit motive, irrespective of the fact that these were admittedly covered
under the IT/ITeS policy of the State of Maharashtra. The same was
firstly rejected by the order dated 17th of August 2009 of the State

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Commission, again on 12.09.2010 which position was lastly confirmed
by the order dated 26th of June 2015 of the State Commission
acknowledging that the consideration for categorization of these
installations under the industrial category had not changed since 2004
when the first MERC order was passed.

6.7 There was no change in nature and purpose of usage of electricity by
these installations since the above-mentioned orders. There was also no
specific change proposal moved under the Tariff Petition, case No. 48 of
2016 and no justification for change of categorization of these
installations were mentioned in the said petition.

6.8 That till November, 2016, MSEDCL has continued to apply industrial
tariff to Mobile Towers without requirement of any permanent
registration as IT/ITeS.

Reference:

A. Conversion Notice
B. Mobile Tower Electricity Bill October 2016
C. Mobile Tower Bill for December 2016.

6.9 However, by the impugned order dated 3rd of November 2016 the State
Commission, without disclosing any rationale reasoning or basis, has
converted the tariff category of Mobile Towers and related
telecommunication installations of the Appellant Company from
industrial to commercial. It also added a stipulation in the tariff schedule
whereby applicability of industrial tariff was sought to be restricted only

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to IT/ITeS units having certificate of registration as IT/ITeS from the
concerned department of the State of Maharashtra.

6.10 From December, 2017, MSEDCL has converted electricity Connections
of Telco’s to Commercial in view of impugned Order dated 3rd of
November 2016 the State Commission

6.11 In passing the impugned order the State Commission did not consider
any of the relevant factors stipulated under Section 62(3) of the Indian
Electricity Act. It also did not consider or decide whether the
installations/operations in question fell under the category of IT/ITeS and
whether these were covered under the IT and ITeS Policy of the State of
Maharashtra or not. No finding was recorded in this regard. It was also
not considered whether the same was otherwise also in the nature of
industrial use or in the nature of public service and what ought to be the
correct tariff category in which these ought to be included.

6.12 The mobile telecommunication and data services provided by the
appellant are essential public utility services and the installations
comprising in the mobile telecommunication network have been
declared and recognized as part of the infrastructure industry. As such
even if these for some reason were not to be included under the
industrial category these were liable to be considered for inclusion under
the category of “public service” which relates to similar essential public
services and infrastructure industry.

6.13 The impugned order dated 3rd of November 2016 is being challenged to
the extent that it converts the tariff category as applicable to Mobile
Towers (BTS) and related installations of Base Station Controllers (BSC)
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and Mobile Switching Centers (MSC) comprising in the composite
telecommunication network of the appellant from industrial category to
commercial category. Also to the extent that it seeks to make
applicability specifically of industrial tariff to IT/ITeS contingent upon and
subject to it being included under the definition of IT/ITeS under the IT
and ITeS Policy of the State of Maharashtra and upon the issuance of
permanent registration certificate for the same by the State Government.

Re: Impugned Order is in Violation of the mandatory procedure
under the Indian Electricity Act andMERC MYT Regulation 2015

6.14 The Respondent No. 1 State Commission has violated the principles of
natural Justice in passing the impugned order dated 3rd of November
2016 by changing the tariff category applicable to Mobile Towers, and
related installations of the mobile operators, from industrial to
commercial without any specific proposal for such change being made in
the Multi-Year Tariff Petition, being case No. 48 of 2016.

6.15 The Procedure followed by the Respondent No. 1 State Commission is
contrary to the mandatory provisions of MERC MYT Regulation 2015 by
which it is bound. The Regulation does not permit such re-categorization
without the proper proposal in the Tariff Petition, without proper notice to
the affected parties and without considering the financial impact of such
re-categorization on the Aggregate Revenue Requirements, Sales
Projections and the Cost of Services.

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6.16 In the present case all the relevant matters for determination of tariff i.e.
ARR, Sales Projections and Cost of Services as submitted in the Tariff
Petition of MSEDCL (Respondent No 2) were based on including Mobile
Towers under the Industrial Category as Bills of Industrial Category were
admittedly being raised on them till November, 2016. As such re-
categorization of Mobile Tower without corresponding impact analysis
on the Aggregate Revenue Requirements, Sales Projections and the
Cost of Services is illegal and ultra-vires the provisions of the Indian
Electricity Act and the MERC MYT Regulation, 2015.

6.17 The relevant aspects of category and tariff determination as provided
under Section 62(3) of the Electricity Act and the MERC MYT
Regulation, 2015 has not been considered at all by the MERC.

6.18 The Category and Tariff as determined in such manner cannot be
regarded as tariff determined in accordance with the Electricity Act and
the MERC MYT Regulation, 2015 and is therefore illegal and without
jurisdiction.

6.19 The same will result in unjust enrichment of MSEDCL contrary to the
Electricity Act and the MERC MYT Regulation, 2015 and will result in a
tariff shock to the Appellant.

Re: Impugned Order is Self-Contradictory a result of non-
application of mind. :

6.20 The impugned order is a result of non-application of mind, perverse and
self-contradictory in as much as though it purports to rely upon the

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earlier orders dated 17th of August 2009 and 26th of June 2015 passed
by the State Commission whereby industrial tariff was held to be
applicable to Mobile Towers but at the same time without disclosing any
logic, reasoning or rationale has issued diagonally opposite directions by
changing the tariff category applicable to mobile towers from industrial to
commercial.

Re: Impugned Order is in Violation of Section 62(3) of the Indian
Electricity Act andMERC MYT Regulation 2015:

6.21 The impugned order is in violation of the provisions of section 62 (3) of
the Indian Electricity Act inasmuch as none of the relevant factors for
determination of the tariff category of mobile towers, or change thereof,
were considered while passing the said order.

6.22 The mobile towers and related installations (BSCs and MSCs)
comprising in the telecommunication network of the appellant actually
falls under the category of IT/ITeS and cannot be discriminated in
matters of such categorization for purposes of Electricity Tariff.
Reference/Judgements:

a) Anthony Phillip Witek Vs Deputy Commissioner of Income Tax
[Income Tax Appellate Tribunal] 2008 (110) ITD 148 Delhi.(Para 8 at Pg.
4 5 of Judgement Compilation)

b) In Re: Amar Zai Sangin [Authority for Advance Ruling]
MANU/AR/0002/1997. (Para 16 to 21 on Pg. 7 10 of Judgement
Compilation)

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c) Syed Asifudin Ors. Vs The State of Andhra Pradesh Anr. [High
Court of Andhra Pradesh] Cri. Petn. Nos. 2601 and 2602 of 2003.
(para 17 to 19 on Pg. No. 17 18 of Judgement Compilation)

6.23 The definition of IT/ITeS under the IT and ITeS Policy of the State of
Maharashtra is an inclusive and incremental definition which includes all
usages in the nature of IT/ITeS. Moreover it is the obligation of MERC
under Section 62(3) to determine categories based on purpose of supply
on a non-discriminatory basis. As such as long as Mobile Towers are in
substance a use for purpose of IT/ITeS, these cannot be discriminated
and removed from such Category.

6.24 A usage truly and actually for the purpose of IT/ITES could not be
discriminated and excluded from consideration under such category
even if it was not specifically included under the definition of the said
expression in the IT and ITeS Policy of the State of Maharashtra when
such definition had not even been formulated having regard to the
relevant considerations of tariff categorization under section 62 (3) of the
Indian Electricity Act.

Re: The State Commission has abdicated its functions of
determination of tariff category to the State Government which is
illegal and impermissible

6.25 The State of Maharashtra has no powers to determine tariff category
under the provisions of the Indian Electricity Act. The State of
Maharashtra also cannot restrict application of industrial category of
tariff only to IT/ITeS as defined and registered by it under its IT and ITeS

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Policy as the same would amount to abdication of function of MERC
under Section 62(3) of Electricity Act to the State Government.

6.26 The State Commission by restricting the application of industrial tariff to
IT/ITeS as defined and registered and specified under the IT and ITeS
Policy of the State of Maharashtra has abdicated its function to
determine tariff category in accordance with the provisions of section 62
(3) of the Indian Electricity Act to the State Government and its
Machinery.

6.27 The IT and ITeS Policy of the State of Maharashtra does not and
cannot restrict the MERC to provide that industrial tariff should apply
only to IT/ITeS as defined in its policy and not to other usage generally
in the nature of IT/ITeS. These are matters in the exclusive domain of
MERC under Section 62(3) of the Electricity Act.

6.28 The State Commission by restricting the application of industrial tariff to
IT/ITeS as defined and registered under the IT and ITeS Policy of the
State of Maharashtra has given precedence to the said policy over and
above the provisions of section 62 (3) of the Indian Electricity Act which
is illegal.

6.29 The State Commission while passing the impugned order has not
examined the IT/ITES Policy of the State of Maharashtra. The policy
was only examined in the year 2004 with the definition of IT/ITES
Industry as mentioned in the IT/ITES Policy in the year 2003 was

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approved and adopted by the MERC to include such category for the
purpose of Industrial Tariff. The matter has never been re-examined.

6.30 MSEDCL has never raised an issue before the State Commission either
that Mobile Tower are not IT/ITES or that these are not covered by the
Policy.

6.31 The relevant exercise under the provisions of section 62 (3) of the Indian
Electricity Act has not been undertaken by the State Commission in
converting the tariff category of mobile towers from industrial to
commercial.

6.32 The State Commission is obliged to consider the application of uniform
tariff to all usage in the nature of IT/ITeS irrespective of the definition of
the said expression under the IT and ITeS Policy of the State of
Maharashtra on ground of parity and in view of the provisions of section
62 (3) of the Indian Electricity Act.

Re: Mobile Towers are otherwise also covered under Industrial
Tariff as per general definition of the said Category.

6.33 Even otherwise the operation of the telecom network of the appellant
comprising of Mobile Towers, Base Station Controllers (BSCs) and
Mobile Switching Centers (MSC’s) is an industrial liable to be covered
under Industrial Tariff.

6.34 The general criteria for applicability of Industrial Tariff under the tariff
schedule of Respondent No. 2, as approved by Respondent No. 1, i.e.
“electricity for Industrial use……for purposes of ………. processing”
include the industrial activity undertaken by the Mobile Towers, and
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other network installations of the Appellant, which are in the nature of
processing of information, signals and data for the purpose of receiving,
transmitting and delivering the same across the network.
6.35 The following judgements are being relied upon:

a) Commissioner of Income Tax Vs Vinay Kumar Sigtia [High Court of
Orissa] Special Jurisdiction Case NO. 1 of 1994] – Data Processing
equated to industrial manufacturing:

b) Commissioner of Income Tax Vs Shaw Wallace and Co. Ltd. [High
Court of Calcutta] Income Tax Reference No. 132 of 1987 – Data
Processing equated to Industrial Manufacturing:

6.36 As such, the Mobile Towers, and related installations of Appellant, would
come under the industrial category of tariff irrespective of whether these
are defined and included under the IT and ITeS Policy of the State of
Maharashtra.

6.37 That even otherwise Mobile Towers, and related installations of
Appellant, are also liable to be considered under the tariff category of
“public service” when such installations are in the nature of essential
public utility services and also declared to be part of the infrastructural
industry.

REJOINDER SUBMISSIONS OF THE APPELLANT.

6.38 It is first and foremost submission of the Appellant that assuming and

accepting the position of the Respondent that nothing has changed in

the matter of application of industrial tariff to IT/ITES industry since the

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year 2004, it needs to be clearly understood as to what is the true

nature, import and meaning of the tariff order dated 10.03.2004 passed

by the MERC.

6.39 Reference in this regard to be made to the following extract of the order

dated 10.03.2004 of MERC which is most relevant for the purpose of the

present determination. The same is extracted as under:

“1.11.3 Commission’s Ruling

The consumer in the Information Technology (IT) and Information technology
Enabled Services (ITES) sector are currently classified under the commercial
category and charged accordingly. As the commercial category is a subsidizing
category, the tariffs are high for these categories. The Commission has been
receiving applications from such consumers requesting that they should be classified
under LT industrial category, for the purpose of tariff determination. In July, 2003,
the GoM announced the IT and ITES Policy, 2003 for promoting business and
enterprise in the IT industry, to make Maharashtra the most favored
destination for investments in the IT and ITES industry. In the context of the
infrastructure support to the IT and ITES sector, the Policy specifies under
Clause 4.2 (h) that, “Levying of power charges on IT and ITES unites at
industrial rates and notifying IT and ITES unites as a separate category of
consumers through MERC”.

In line with the IT and ITES Policy announced by the GoMand the stated
philosophy of the Commission in the previous Orders, the Commission has
included the Low Tension IT Industry and IT enabled services (as defined in
the GoM Policy) in the LTP-G category, for purposes of tariff determination.
The Commission has decided against creation of a new category for IT and ITES
sector, in line with its stated philosophy of reducing the number of consumer
categories and consumption slabs, over a period of time.”

Without prejudice to the other submissions made before this Tribunal, it
is the submission of the Appellant that a reference to the above extract
of the Order will show that the State Commission did not simply accept
the decision of the Govt of Maharashtra to extend the industrial tariff to
the IT/ITES units as covered by the policy of the State of Maharashtra.

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Instead ,the State Commission has only considered the
recommendations of the State Govt. and, after duly and consciously
considering the classification/definition of IT/ITES units( i.e. IT Industry
and IT enabled services) as defined in the said Policy of the GoM and
finding it in line with its own stated philosophy, i.e. of determining tariff
categories on the basis of principle set out in Section 62(3)of the Indian
Electricity Act, it has accepted and incorporated this definition into its
tariff order as the class of IT/ITES Industry to which the Industrial Tariff
would apply. In other words on findings this definition of IT/ITES industry
in the Policy of GoM to be of such nature as meeting the requirements of
the provisions of Section 62(3), the State Commission had decided to
incorporate the said definition of IT/ITES industry in its tariff Order
treating it as a part of the consumer category to which industrial tariff
would be extended under the said tariff Order. It is respectfully submitted
that the expression used in the tariff Order is”IT Industry and IT enabled
services (as defined in the GoM Policy)” not “IT Industry and IT
enabled services (as defined in the GoM Policy from time to time)”.

6.40 MERC did not leave the tariff categorization to be done by the Govt. of
Maharashtra by generally adopting its policy for the purpose of
application of industrial tariff to IT/ITES industry as may be defined from
time to time by the State Government but only incorporated the definition
of IT Industry IT enabled services units as defined in the said Policy of
the GoM of the year 2003 by reference into the MERC tariff Order. This
is an incorporation of the said definition by reference. In doing so the
MERC has in effect bodily lifted and transposed this definition into the
said tariff order which thereby became a part thereof.

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6.41 Had the MERC left the matter of extending industrial tariff to any

category of IT/ITES to be defined by the Policy of the State of

Maharashtra from time to time then it would be clearly abdicated its

functions of defining tariff classifications/categories under Section 62(3)

of the Indian Electricity Act to the State Government, which it has not

done. This was never the intention of the MERC which has clearly taken

a conscious decision only to incorporate the definition of IT/ITES

industry “as defined in the GoM policy”, i.e. the IT and ITES Policy of the

GoM of the year 2003 (which was the only policy considered by it), into

its tariff Order after finding the same to be in line with the provisions of

Section 62(3) the Indian Electricity Act.

6.42 As admitted by the Counsel for the Respondent, as also evident from

the later tariff Order which have consistently held that the ruling and

rationale of the 2004 tariff Order will continue to apply, that the definition

of IT/ITES units as incorporated by reference in the tariff Order of 2004

continues to apply as on date.

6.43 The IT/ITES policy of the Govt. of Maharashtra of the year 2003 was
placed before the MERC at the time of passing the tariff order dated
10.03.2004.At no other time has any subsequent Policy of the GoM has
ever been placed before the MERC or examined by it. The matter of
reclassification of the category of IT/ITES in the light of any subsequent

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policy has never been considered or ruled upon by the MERC at any
stage. Hence also, there is no question of any subsequent definition of
IT/ITES in any subsequent being adopted by MERC having never been
subject of any such examination by it at any stage.

6.44 The law of subject of incorporation of such definitions by reference is
also well settled in various judgements of the Hon’ble Supreme Court of
India whereby it is held that when provisions of one statute/document
incorporated by reference to another statute/document then even if the
statute/document by reference to which the incorporation is made is
subsequently amended or even repealed, the provisions as originally
incorporated in the other statute/document by reference will continue to
remain unaffected and unchanged and continue as before. Hence, even
if the IT/ITES Policy of the State of Maharashtra may, or may not, have
subsequently changed with reference to the definition of IT/ITES
industry but for the purpose of the tariff Order of MERC, the definition of
IT/ITES policy of the State of Maharashtra of the year 2003 will continue
to apply. In this regard reference is made on the following judgements.
a. Bharat COOP. Bank (Mumbai) Ltd. Vs COOP. Bank Employees Union
[2007] 4 SCC 685. [refer Para 15 to 21 on Pg. 8 9 of the Compilation
of Judgements filed by Appellant on 17.07.2019 referred hereinafter as
Judgment Compilation]
b. Mahindra and Mahindra Ltd. Vs UOI Ors. MANU/SC/0391/1979. [Refer
to Para 22 to 24 of the Judgement Compilation]
c. Ram Sarup Ors. Vs Munshi Ors. AIR 1963 SC 553. [Refer Para 12
13 on Pg. No. 42 43 of Judgement Compilation]

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The relevant extract of the judgement of Bharat Coop. Bank is also
reproduced as under:

“Legislation by incorporation is a common legislative device where the legislature,
for the sake of convenience of drafting incorporates provisions from an existing
statute by reference to that statute instead of verbatim reproducing the provisions,
which it desires to adopt in another stature. Once incorporation is made, the
provision incorporated becomes an integral part of the statute in which it is
transposed and thereafter there is no need to refer to the statute from which the
incorporation is made and any subsequent amendment made in it has no effect on
the incorporating statute. On the contrary, in the case of a mere reference or citation,
a modification, repeal or re-enactment of the statute, that is referred will also have
effect on the stature in which it is referred. Unless a different intention clearly
appears, the reference would be construed as a references to the provisions as may
be in force from time to time in the former statue.”

6.45 These submissions are made without prejudice to the other submissions
of the Appellant that the definition IT/ITES in the subsequent policy of
the State of Maharashtra continues to include treat installation of
mobile tower (Cellular)as part of IT/ITES unit as regulated by such
policies. There is specific references to mobile towers and expedited
permissions from local authorities for the same in these policies as in the
policy of 2003 (Clause 4.6(e) and Clause 11.1(f). Mobile Phones,
related hardware and mobile antennas etc. (which comprise mobile
towers) find specific reference in the Schedules annexed with all these
policies.

6.46 However, as already submitted, the correct interpretation of the Order
dated 10.03.2004 would be that the definition of IT Industry IT Enabled
Services as defined in the GoM Policy of the year 2003 (the only policy
considered and examined by the State Commission) has been
incorporated in the said Order as the classification and definition of the
tariff category of IT/ITES units to which industrial tariff was made

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applicable in the year 2004 and to which it continues to apply. The said
definition which is in the IT and ITES Policy, 2003 of the State of
Maharashtra is reproduced as under:

“5. Definitions:

In the context of the policy, the Information technology industry consist of IT
Software, IT Hardware, IT Services and IT Enabled Services as defined below:

IT Taskforce of Government of India has defined IT software as follows:

(a) IT Software
IT Software is defined as any representation of instruction, data, sound or
image, including source code and other object code, recorded in a
machine readable form and capable of being manipulated or providing
interactivity to a user, with the means of a computer.

(b) IT Hardware:

IT Hardware covers approximately 150 IT products notified by Directorate
of Industries (APPENDIX I).

(c) IT Services and IT Enabled Services:

These include various IT Services and are defined by the IT Task force of
the Government of India as follows:

“IT Service including IT Enabled Service is defined as any unit that
provides services, that result from the use of any IT Software over a
Computer System for realizing any value addition”.
The Directorate of Industries has prepared and published an illustrative
list of such IT Enabled Services (Appendix II) which is updated from time
to time.”

6.47 The illustrative list as mentioned above is also reproduced as under:

“The list of activities registrable as IT Services and IT enabled Services is amended
as follows:

1) Data conversion, data mining, digitisation, data entry, data processing, data
warehousing.

2) Digitisation of spoken material (e.g. legal and medical transcription)
3) Computerized call Centres
4) Geographic Information Systems mapping/services
5) Web designing/ Web content development services
6) Computer Added/CAD/CAM services
7) E-mail, data, Internet fax service provider
8) ISP Services (Communication channels like V-eat, Optical fiber not
included)
9) Computerised Desk Top Publishing
10) Web service providers, including web hosting and web management
11) USDN service providers
12) Computer System AMC holders

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13) Multimedia development units (including, e.g. animation and special effects
video and photo digitisation)
14) IT Solution Providers/ implementers (such as and including server/ data

banks, Application Service Providers, Internet/Web-based e-commerce services
providers, Smart Card customization service providers, systems integration service
providers)

15) Cyber cafe/cyber kiosk/cyber parlours and video conferencing centres/
parlours

16) Back Office Operations relating to computerised data

17) Other services provided with the intensive use of computers (such as
and including telemedicine services, remote access cyber services, remote
diagnostic and repair services).”

6.48 It is clear by the reference to the above definition that the installation of
Mobile Tower which is part of the cellular notice telecommunication
network of the Appellant and subject matter of the present appeal come
under the definition of IT/ITES units or defined by the IT ITES Policy of
the Government of Maharashtra. Further reference to Clause 4.6(e)
and 11.1(f) of the said policy would also show that there is clear and
specific reference to mobile towers in the said policy. Hence, there can
be no doubt that Mobile Tower are covered under the definition of
IT/ITES as defined in the policy of the State of Maharashtra for the year
2003 (as also in subsequent policy where similar provisions are
reiterated).

6.49 The fact that the mobile tower and related installation of Appellant were
treated and covered in the definition of IT/ITES under the various
policies of the State of Maharashtra will also be evident from the
Registration Certificate issued by Govt. of Maharashtra for the said
installations of the Appellant right since the year 2004.

6.50 That Reference is also made to the unified license dated 14.11.2003
granted to the petitioner. Reference to Clause No. 2.2(b)(i), 7(ii), 74 and

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1 of the said would also show that the said license was issued to
provide services of the exact nature which are mentioned in the
definition of IT/ITES units in the policy of the State of Maharashtra as
mentioned above.

6.51 The above mentioned the Registration Certificate issued by State of
Maharashtra (refer para 13 above) also show that the Govt. of
Maharashtra acknowledged that the installation of Petitioner used to
provide internet services and that telecommunication services were also
as part of IT/ITES units under the aforesaid definition of IT/ITES Industry
by the Govt. of Maharashtra which has continued these registrations till
the year 2012.

6.52 The Appellant also relied on the following judgements in support of the
contentions that the telecommunications services are part and were a
subset of the field of information technology. These judgments as set out
under:

– Anthony Philip Witek Vs. Commissioner of Income tax. ‘Income
Tax Appellate Tribunal] 2008 110ITD 148 Delhi (2008) 113 TTJ
Delhi 740

– Amir ZaiSangin [Authority for Advance Ruling]
MANU/AR/0002/1997

– Syed Asifuddin and ORs. Vs. The State of Andhra Pradesh and
Anr. [High Court of Andhra Pradesh] Cri Petn. Nos 2601 and 2602
of 2003.

6.53 It is also further submitted by the Respondent that the contentions of the
Appellant that the MERC was bound to follow the directions issued by
the Govt. of Maharashtra under the IT/ITES policy and that there was
nothing wrong for the MERC to do so is absolutely misconceived,

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incorrect and untenable. As mentioned above MERC has not followed
the directions of the Govt. of the State of Maharashtra when it passed
the tariff Order dated 10.03.2004 and it has not simply extended the
industrial tariff to any category of IT/ITES left to be decided by the State
of Maharashtra but instead it has examined the definition of IT/ITES in
the IT/ITES Policy of the State of Maharashtra for the year 2003 and, on
finding the said definition to be in line with the relevant factors applicable
for tariff categorization as provided under Section 62(3) of the Indian
Electricity Act, it has adopted and incorporated this definition of IT/ITES
units in its tariff Order for extending the industrial tariff to the same. This
is an independent and conscious exercise of its power under Section
62(3) of the Indian Electricity Act. It was not the object of the MERC
while passing its tariff Order for the year 2004 to leave such matter of
categorization of the said tariff category to the Govt. of State of
Maharashtra to be decided by them from time to time. It was not left
open to the Govt of Maharashtra to keep defining the category of
IT/ITES unit from time to time and extending industrial tariff to such a
changing category of consumers. Such an action would actually amount
to abdication of the power of the State Commission under the provisions
of the Indian Electricity Act and would be clearly illegal.

6.54 The authority of the State Governments to issue directions to the State

Electricity Regulatory Commission have been discussed in detail by the

Hon’ble APTEL in its judgements in the case of Polyplex Corporation

Ltd. Vs. Uttarakhand Electricity Regulatory Commission. The relevant

extract of the said judgement is reproduced as under:

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“19. On the basis of these contentions urged by the Learned Counsel for the
parties, the following questions may arise for conclusion:
(1). Whether the policy directions issued by the State Government on 25.09.2009
for mere consideration are binding on the State Commission while discharging its
statutory finding on the determination of tariff under Section 62 of the Electricity Act,
2003 read with the Regulations framed there under?

………………..

26. The grievance of the Appellant is that the conclusion arrived at by the State
Commission, as referred to above, was not on the basis of independent
consideration but was purely based upon the directions issued by the State
Government which is not a correct approach as the said directions are not binding
upon the State Commission as laid down by this Tribunal and the Hon’ble Supreme
Court.

27. Let us now analyse this point.

28. It cannot be debated that the determination of tariff is one of the core
functions of the State Commission which is to be done in an independent manner.
These functions have to be discharged by the State Commission by following the
provisions of the Electricity Act, 2003 and the Regulations made there under. It is
settled law that the State Commission alone has the powers to determine the tariff.
In this context, a reference may be made to the Statement of Objects and Reasons
of Electricity Act, 2003 for the purpose of appreciating the legislative scheme. The
same is as follows:

1.3 Over a period of time, however, the performance of the State Electricity
Boards has deteriorated substantially on account of various factors. For
instance, powers to fix tariffs vest with such Electricity Boards, they have
generally been unable to take decisions on tariff in a professional and
independent manner and tariff determination in practice has been done by the
State Governments. Cross subsidies have reached unsustainable levels. To
address this issue and to provide for distancing of Government from
determination of tariffs, the Electricity Regulatory Commission Act was
enacted in 1998. It created the Central Electricity Regulatory Commission and
has an enabling provision through which State Governments can create a
State Electricity Regulatory Commission….

“3 With the policy of encouraging private sector participation in generation,
transmission and distribution and the objective of distancing the Regulatory
Commission, the need for harmonising and rationalising the provisions in the
Indian Electricity Act, 1910, the Electricity (Supply) Act, 1948 and the
Electricity Regulatory Commission Act, 1998, in a new selfcontained
comprehensive legislation arose….”

Thus, the main object and reason of the reform legislation was to distance the role of
the Government in fixation of tariff and to allow tariff determination by an
independent regulatory authority which will follow a transparent process. This is at
the very core of the reform legislation.

…………………..

32. In terms of the above sections, there is a statutory policy that occupies a field,
i.e. electricity tariff. There is no scope for the State Government to issue policy

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directions on tariff matters. The Parliament has allocated such powers to the Central
Government which is to issue the policy. While preparing these statutory policies
under Section 3 of the Act, the legislature has provided for consultation with the
State Governments. Thus the State Government’s power to issue independent policy
directions on tariff matters stands exhausted. All that the State Government can do,
is to give its views on the tariff matters during the consultation process with the
Central Government.

…………..

36. Let us now quote those decisions rendered by this Tribunal as well as the
Hon’ble Supreme Court. They are as follows.

37. This Tribunal in its judgment dated 18.08.2010 Appeal No. 5/09 has analysed
this issue and gave the following findings:

(A) It is settled law as laid down by this Tribunal as well as by the Hon’ble Supreme
Court, that all the policy directions are not binding on the State Commission since
the State Government cannot curtail the powers of State Commission in the matter
of determination of tariff “.

………….

38. The legal propositions that emanate from the above various decisions with
regard to this point as referred to above are given below:

1. The State Commission is an independent statutory body. Therefore, the
policy directions issued by the State Government are not binding on the State
Commission. The State Government by issuing direction to State Commission
cannot curtail the power of the State Commission in the matter of
determination of tariff.

2. The State Commission has the powers to determine the tariff and to pass
orders under Sections 61 and 62 of the Act relating to the tariff. These orders
are binding on the State Government.

………….

4. The State Government is not above the law. It is bound to respect the
mandate of the legislature. Otherwise, the tariff determination will not be in
consonance with the various factors and parameters specified in Section 61.
……………

6. It is true that the Government has to cater to the popular demands in order to
earn its legitimate favour giving any such policy direction but it should be
under permissible limit. While exercising the power of determination of tariff,
the policy directions issued by the Government may also be taken into
consideration by the State Commission which has statutory duty to perform
under the Act but so long as the policy directions issued by the Government
are consistent with the provisions of the Act, it may be open to the State
Commission to either to accept them or not. Thus, it is purely discretionary on
the part of the State Commission with regard to the acceptability of the
directions issued by the State Government in the matter of determination of
tariff.

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6.55 The above will clearly show that the State Commission is not bound by
any directions of the State Govt. and only if the directions in the matter
of tariff categories are in line with the requirements of the provisions of
the Electricity Act, only then the State Commission, in its discretion, may
adopt and incorporate such decisions as part of its own independent
will/action in such matter. Hence, submission of the Counsel of the
Respondent there is nothing wrong for the MERC to simply adopt any
directions of the State Govt. for the sole purpose of providing incentives
to any category of consumers as the State Government chooses to
promote is absolutely wrong, misconceived and untenable.

6.56 It is also incorrect on part of the Respondent to allege that the MERC
has not treated Mobile tower as part of IT/ITES. In fact, MSEDCL has
also itself treated mobile tower is falling under the definition of IT/ITES
policy of the Govt. of Maharashtra which was incorporated in the tariff
Order dated 10.03.2004. In this regard it is further submitted as under.

6.57 Reference is made to Internal Circular dated 26.06.2009 of MSEDCL.

By this circular MSEDCL tried to withdraw all the earlier letters
directed/issues from HQ’s pertaining to applicability of industrial tariff to
mobile towers “(being covered under the IT and IT Enabled Services)”.
This letter clearly shows that industrial tariff was being applied to mobile
tower under the earlier letters and directives issued by MSEDCL as
these installations were admittedly being treated as covered under IT
and IT Enabled Services as per the IT Policy of the Govt. of
Maharashtra.

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6.58 The said circular was stayed by the Order dated 17.08.2009 of Bombay
High Court. This order in fact shows that MSEDCL was in fact
challenging the role of both the State Government or the State Electricity
Regulatory Commission in making tariff categorization and claiming that
it was the power of the Discom (MSEDCL) itself to classify such
categories which was not agreed by the Bombay High Court.

6.59 Accordingly, in view of the Stay by the Bombay High Court, by letter
dated 28.04.2010 of MSEDCL the status of mobile tower for levy of
industrial tariff was restored by them by continuing to treat them as part
of IT/ITES as per the definition in the Policy of the GoM.

6.60 Reference is also made to the APRP Tariff Petition of MSEDCL i.e.
Respondent No 2 filed before the MERC for FY 2008-09 whereby
proposal was made to exclude the Mobile tower from the category of IT
and IT Enabled Industry and to convert/classified it in commercial
category. Reference is made to extract of the said Petition with specific
reference to Clause (i) and Para 4 of Appellant. This Petition shows
clear admission of MSEDCL that mobile tower were being treated as
covered under the IT and IT Enabled industry and were sought to be
converted to commercial.

6.61 Reference is also made in letter dated 17.08.2009 of MERC whereby
application for change of tariff category of mobile tower as made in
abovementioned Tariff Petition/Proposal of Respondent No.2 was
rejected by the State Commission holding that:”as regards MSEDCL’s
proposal to classify certain telecom towers. etc., under commercial
category, irrespective of whether they were covered under the IT ITES

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Policy of the Government of Maharashtra, no rationale has been
submitted by MSEDCL for this specific proposal. The Commission had
consciously included IT and IT enabled Services (IT ITES) under
industrial category (HT and LT as applicable) in the Tariff Order for
the erstwhile MSEB in 2004. Since then, the IT ITES category
continues to be charged under industrial tariffs. In the existing Tariff
Schedule of MSEDCL as well as the approved Tariff Schedule for the
distribution licensees in Mumbai issued in June 2009, the Commission
had included IT ITES category under industrial category. Hence, the
Commission does not agree with MSEDCL’s proposal in this regard and
rules that IT ITES will be charged at industrial rates (HT and LT rates,
as applicable), without getting into the details of whether mobile towers
and commercial broadcasting towers and all other similar activities are
covered under the Government of Maharashtra Policy on IT ITES.

6.62 The above mentioned order of MERC clearly notes that the Commission
had consciously included IT IT Enabled Services under the installation
category in 2004 and since then the said category continues to be
charged under the industrial tariff. The Respondent No.2 wanted
category of mobile tower changed from industrial to commercial
irrespective of the fact the they were covered as IT/ITES ad per the
definition of the said category under the IT and ITES policy of the GoM.
It was the admitted position of Respondent No. 2 that mobile tower was
covered by the said policy and only therefore such conversion was
sought irrespective of the said policy. The later observations of the State
Commission that it was not “getting into details of whether mobile tower
of all other similar activities and covered under the Govt. of Maharashtra

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policy of IT ITES” does not show or suggest that mobile tower were
not covered by the said policy but only shows that such issues was not
raised before the Commission at all since the Respondent No.2 had
made application for conversion by itself admitting the applicability of the
said policy to mobile tower, i.e. application of conversion was made
irrespective of the policy, giving no occasion for the Commission to get
into such issue at all and this is the only thing which is reflected from its
observations and nothing more.

6.63 The fact that the Respondent No.2 admitted that the IT/ITES policy of
the Govt. of Maharashtra covered mobile tower as IT/ITES units is also
evident from the next tariff Order dated 12.09.2010 passed by the
MERC. Under this tariff Order policy a similar request was made by
Respondent No. 2 to change tariff category of mobile tower and other
IT/ITES units such as Computerized Call Centers, IT Solution Providers
etc. from the industrial to commercial category on the ground that
though these services were covered as IT IT Enabled services under
IT ITES policy of GoM but their activities were actually commercial as
per the Respondent No. 2. The Respondent No 2 was in fact and
substance challenging the authority of the MERC as also the Policy of
the State Government to make such Tariff Classification and
Categorization. The admission to this effect is found in the extract of the
Order dated 12.09.2010 of the MERC. The Commission observed that
the “similar issue” was raised in the previous APR Petition in Case No.
116 of 2008 and rejected the said proposal for change of categories of
mobile towers and other installations covered by the definition of IT/ITES
under the Policy of the GoM by reiterating and reaffirming its Order

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dated 17.08.2009 in the said case. The said order clearly shows that the
Respondent No. 2 had itself acknowledged that mobile tower fall under
the definition of IT/ITES as per the policy of GoM which was
incorporated by reference in the tariff Order dated 10.03.2004 and the
rationale and ruling of which was held as continuing to apply in the tariff
Order dated 17.08.2009 as also in the tariff Order dated 12.09.2010. It
also shows that the same position was also acknowledged and accepted
by the MERC also which treated Mobile Towers as covered under the
said definition of IT/ITES to which industrial tariff was applied since
2004.

6.64 The same position has also been reiterated in the subsequent tariff
Order dated 26.06.2015. However, the said order also stated that the
ruling and rationale of the 2008 order of MERC will continue to apply.
The 2008 order only reiterates the 2004 Tariff order. It was however
additionally mentioned in the 2015 order that:

“The commission is of the view was that the rationale and ruling of its
earlier order in case number 116 of 2008 should continue to apply. In
other words, the industrial tariffs will apply to mobile towers or other
activities that stated by MSEDCL only if they are covered as IT/ITES and
the provisions of GoM’s policy apply to them.”

Reading the 2015 order as a whole it cannot be said that any different
order from earlier order of the year 2008 in which the MERC order of
year 2004 was reiterated and extended has been passed. Reading this
order as a whole and with reference to the 2008 and 2004 orders the
expression “only if they are covered as IT/ITES and the provisions of
GoM’s policy apply to them” can only be understood to mean that
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industrial tariff will apply to Mobile Towers if they are covered in the
definition of IT/ITES as incorporated in the tariff order of the year 2004
by reference to the then IT/ITES Policy of the GoM(2003) as then
considered by the MERC in its order dated 10.03.2004 and nothing
more or different.

6.65 However, the impugned multi-year tariff Order dated 3.11.2016 though it
purportedly uphold same Orders but in fact has passed self-contradict
observations which have the effect of negating and reversing the earlier
tariff Order. Though on the one hand it has held that rationale and ruling
of Order dated 17.08.2009 which simply hold that the tariff Order in the
year 2004 will continue to governed IT/ITES industry but at the same
time it has for the first time held in total contradiction of the earlier
Orders that Commercial tariff would apply to Mobile Tower unless
specifically included as IT/ITES in the Policy of the Govt. of
Maharashtra. It is not understood what is meant by specifically included.
Mobile Towers are included in the definition of IT/ITES as included by
reference in the first order of 2004 which is reiterated to continue in the
order of 2008 as also in the order of 2015. Hence, there is no basis for
their arbitrary exclusion in such manner and that to when there was no
such proposal before the MERC by the Respondent No 2 as submitted
in detail in the earlier written submissions filed by the Appellant which
may be referred to and are relied upon.

6.66 The reference to the impugned tariff order also shows that though the
MSEDCL had proposed the tariff categorization as “IT and IT Enabled
Services(ITES) as defined in the Government of Maharashtra Policy
prevailing from time to time” the same was changed by the MERC while
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approving the tariff to “IT and IT Enabled Services(ITES) as defined in
the applicable IT/ITes Policy of the Government of Maharashtra”. The
applicable policy is the one which was referred in the 2004 tariff order
which has be held to continue to apply in the later tariff orders till date.

6.67 The reliance of Respondent on the judgement of the APTEL in the case
of TTSL VS Rajasthan Regulatory Commission Bharat Sanchar
Nigam Limited Vs Punjab State Electricity Board is also misconceived as
those judgements are easily distinguishable. Firstly these judgements do
not refer to electricity usage mobile tower at all. These judgments have
reference to mixed user made by telecom companies in the context of
usage by telephone exchanges having connected commercial offices of
the telecom companies from a common-premises, using the same
electricity connection for mixed usage for its industrial and commercial
usage. Unlike in Maharashtra where there is no such mixed user
category, in these states there is a separate category categorization for
mixed user in the context of which such judgment were delivered with
reference to mixed user by telecom companies. These Judgments would
have no application to in the context of Maharashtra and to the issue at
hand which does not relate to such mixed usage at all.

6.68 In this regard it is explained that in the State of Maharashtra there is no
mixed load category and the installation of mobile towers and telephone
exchange are dealt with different manner as reflected by letter dated
3.5.2012 and 21.7.2012 of the Respondent No. 2. Reference to the
same will show that Respondent No. 2 had itself decided in relation to
mixed loads that:

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“As communicated in the letter, if there is any kind of mixed load then the separate
connection should be issued to telecom towers and its associated accessories which
are a must for operation of the telecom towers treating it as industrial load. Rest of
the load should be treated as commercial load and accordingly separate
connections may be issued.”

6.69 Hence, it would be seen that there is no comparison between the tariff
categorization and principles which have been followed in the State of
Maharashtra and those in the State for which judgements have been
relied upon by the Respondent.

6.70 Appellant relies on the other submission as already made in their Written
Submissions dated 21.02.2019.

7. Learned Counsel, Mr. Raghav Pandey appearing for the Appellant in
Appeal Nos. 28,29, 33 221 of 2017 has made following arguments/
submissions or our consideration:-

(a) The impugned order dated 3.11.2016 is violative of the principles of
natural justice.

7.1 The Appellant submits that no notice had been issued by MERC to the
Appellant before deciding Case No.48 of 2016 filed by MSEDCL. Even
in the public notice and the executive summary in respect of the said
Case No.48 of 2016, there is no mention of the proposed
recategorization of mobile towers. Even the petition filed by MSEDCL
does not reflect its proposal for such recategorization. In the
circumstances, the Appellant was not in a position to know that
MSEDCL had sought recategorization of mobile towers, as alleged.

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7.2 Thus, the impugned order dated 3.11.2016 has been passed by MERC
without notice to the Appellant and without affording an opportunity of
hearing to the Appellant. In the circumstances, the impugned order
dated 3.11.2016 is violative of principles of natural justice.

7.3 This Tribunal by its order dated 7.11.2012 passed in Appeal No.215 of
2012 had set aside the portion of the tariff order dated 16.8.2012
regarding recategorization of mobile towers in view of violation of the
principles of natural justice. This Tribunal had granted liberty to
MSEDCL to file a fresh petition proposing recategorization of mobile
towers, and had specifically directed MERC to pass appropriate orders
after hearing all the concerned parties.

7.4 In spite of such clear directions of this Tribunal, MERC did not hear the
Appellant before passing the impugned order dated 3.11.2016. In the
circumstances, the impugned order dated 3.11.2016 is not only violative
of the principles of natural justice, but is also in breach of the order of
this Tribunal dated 7.11.2012.

7.5 It may be pertinent to note that neither MERC nor MSEDCL in their
respective replies have disputed the said submissions of the Appellant.
In support of its aforesaid submissions, the Appellant relies upon the
following judgments:

(i) Uma Nath Pandey and others v/s State of Uttar Pradesh and
another, reported in (2009) 12 SCC 40 (paragraph 3)

(b) MERC could not have recategorized mobile towers in absence of
prayers seeking such recategorization

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7.6 A perusal of the petition filed by MSEDCL, more particularly the prayers
sought in Case No.48 of 2016 would make it clear that no prayers
seeking recategorization of mobile towers were made in Case No.48 of
2016.

7.7 The Appellant submits that in absence of specific prayers seeking
recategorization of mobile towers, MERC could not have passed the
impugned order dated 3.11.2016 to the extent it recategorizes mobile
towers into Commercial tariff category in absence of coverage under the
relevant IT and ITES Policy of the Government of Maharashtra. In the
circumstances, to the aforesaid extent, the impugned order dated
3.11.2016 is bad in law, and is required to be set aside.

7.8 Even otherwise, no case has been made out by MSEDCL in its petition
for seeking recategorization of mobile towers. In support of its aforesaid
submissions, the Appellant relies upon the following judgment:

(i) Bhagwati Prasad v/s Chandramaul, reported in AIR 1966 SC
735 (paragraphs 10 and 15)

(c) The impugned order dated 3.11.2016 does provide any reasons in
support of recategorization of mobile towers

7.9 The Appellant submits that there is not an iota of reasoning behind the
impugned order dated 3.11.2016 passed by MERC. In fact, in the past
MERC has rejected the proposals of MSEDCL for reclassification of
mobile towers from Industrial tariff category to Commercial tariff
category. Even in the impugned order dated 3.11.2016, MERC has
reproduced excerpts of its earlier tariff order dated 17.8.2009, wherein it

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had categorically stated that MSEDCL had failed to provide any
rationale for recategorization of mobile towers into Commercial tariff
category.

7.10 Without prejudice to the foregoing submissions, it is submitted that
neither has MSEDCL provided any rational for the proposed
recategorization and nor has MERC provided any reasons for directing
recategorization of mobile towers in its order dated 3.11.2016. In the
circumstances, the impugned order dated 3.11.2016 is bad in law and
required to be set aside.

7.11 In support of its aforesaid submissions, the Appellant relies upon the
following judgment:

(i) Kranti Associates (P) Limited v/s Masood Ahmed Khan,
reported in (2010) 9 SCC 496 (paragraphs 15, 47, and 48)

(d) There are no change in facts or circumstances warranting
recategorization of mobile towers, and in absence of any change in
facts or circumstances the very petition seeking recategorization is
barred by the principles of res judicata

7.12 Section 62 of the Act provides powers to a State Commission to
determine tariff. As per Section 62(3) of the Act, a State Commission
may differentiate between consumers while determining tariff on the
basis of consumer’s load factor, power factor, voltage, total consumption
of electricity, the nature of supply and the purpose for which supply is
required.

7.13 It is submitted on the basis of the aforesaid factors, mobile towers were
being covered under Industrial Tariff category. Thus, the question of
recategorization of a consumer would arise in the following situations:

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(i) Where a new tariff category is created by MERC or the
definition of a tariff category is altered by MERC under
Section 62 of the Actleading to a situation where a consumer
ceases to satisfy the definition of its existing category or falls
within the definition of any other category specified by the
Commission; or

(ii) Where the consumer alters the purpose of usage of supply
received from the distribution licensee, resulting into a
change in the aforesaid factors, and thereby requiring
reclassification under a new tariff category as per its altered
usage.

7.14 In the present case, charges were being recovered under Industrial
Tariff Category for the electricity supplied to the mobile towers. It is
submitted that neither has the MERC created a new tariff category or
redefined a tariff category, nor has the Appellant altered its usage of the
electricity supplied by the distribution licensees to the mobile towers.
Thus, there is no change in facts or circumstances, warranting
recategorization of mobile towers into Commercial tariff category.

7.15 Neither has MSEDCL cited any change in circumstances, nor has
MERC found any change of facts or law warranting such
recategorization. In the circumstances, there was no reason for the
MERC to depart from its earlier orders rejecting such recategorization. In
fact, in absence of any material change, the very petition of MSEDCL
was barred by res-judicata.

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7.16 In support of its aforesaid submissions, the Appellant relies upon the
following judgments:

(i) M/s. Radhasoami Satsang SaomiBagh v/s Commissioner of
Income-Tax, reported in (1992)1 SCC 659 (paragraphs 16
and 17)

(ii) Municipal Corporation of City of Thane v/s Vidyut Metallics
Ltd. and Anr., reported in (2007) 8 SCC 688 (paragraphs 18,
22, and 25)

(e) MSEDCL has suppressed material facts in the proceedings before
the MERC

7.17 MSEDCL has failed to disclose the facts pertaining to its earlier circulars
dated 26.6.2009 and 20.4.2010, as well as the interim order of the
Hon’ble Bombay High Court in Writ Petition No.6702 of 2009. It is
submitted that in light of the aforesaid circular dated 20.4.2010, the
Appellant executed necessary indemnity bond in favour of MSEDCL. By
the aforesaid circular dated 20.4.2010 MSEDCL clearly gave an
impression that the issue of reclassification would only be dealt with by
the Hon’ble Bombay High Court.

7.18 It is submitted that none of the aforesaid facts were brought to the notice
of MERC by MSEDCL. MSEDCL suppressed the aforesaid material
facts from MERC in the proceedings, which culminated into the
impugned order dated 3.11.2016. Further, MSEDCL has also not
disclosed the fact about the pendency of various writ petitions before the
Hon’ble Bombay High Court in respect of challenge to reclassification of
Data centres.

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7.19 The complete exercise/procedure adopted by MSEDCL smacks of
malafides and makes it evident that MSEDCL has suppressed material
facts from MERC. In the circumstances, the impugned order dated
3.11.2016 is required to be set aside.

(f) MERC has erred in presuming that the condition of coverage under
IT ITES Policy was present in its earlier tariff orders

7.20 In its reply dated 13.2.2017 in the present appeal, it is the stand of
MERC that it had ruled that only the units covered under the IT and
ITES Policy would be covered under Industrial tariff category, and that it
was upto MSEDCL to verify the coverage of mobile towers under the
aforesaid IT and ITES Policy. The said stand is not only bad in law, but
is also factually incorrect.

7.21 In its earlier tariff order dated 17.8.2009, MERC had clearly held that

“As regards MSEDCL’s proposal to classify certain telecom towers, etc.
under commercial category, irrespective of whether they were covered under
the IT ITES Policy of the Government of Maharashtra, no rationale has
been submitted by MSEDCL for this specific proposal.” Thus, as MSEDCL
had failed to provide for reclassification of mobile towers, MERC had rejected
the reclassification of mobile towers. It is submitted that even in the
subsequent years, MSEDCL has failed to demonstrate its rational for the
proposed reclassification.

7.22 Without prejudice to the aforesaid, assuming that MERC had left it to
MSEDCL to verify the coverage of mobile towers under the aforesaid IT
and ITES Policy and in turn delegated the question of coverage of
mobile towers under Industrial tariff category, the same would amount to
delegation of statutory powers. It is submitted that MERC is not
empowered under the Act to delegate its power of tariff determination
and recategorization of consumers in tariff categories to distribution

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licensees. In the circumstances, the stand of MERC is also arbitrary and
bad in law.

(g) The impugned order is bad in law in as much as it determines tariff
category on the basis of registration under a policy instead of the
parameters set out under Section 62(3) of the Act.

7.23 The fact that the electricity supplied to the mobile towers of the Appellant
is consumed for IT/ITES activities is not disputed. It is submitted that the
Appellant has been granted an ISP (Internet Service Provider) Licence
under the provisions of the Information Technology Act, 2000. The said
fact further goes on to reinforce the stand of the Appellant that it
undertakes IT/ITES activities through its mobile towers. Hence, once it is
established that the usage of electricity by the mobile towers of the
Appellant is for IT/ITES activities, the Appellant is entitled to be treated
at par with other IT/ITES consumers, who are covered under Industrial
Tariff Category.

7.24 Section 43 read with Section 45 of the Act, clearly provide that the price
to be charged by the Distribution Licencee for supply of electricity to any
occupier / owner of any premises has to be in accordance with the tariff
fixed. Thus, the emphasis is clearly to the effect, that the tariff has to be
fixed in relation to each premises to which electricity supplied and it is
obviously based on the nature of user of the said premises. The nature
of use is not dependent upon any registration/certificate to be issued by
the State Government Authority and such requirement is clearly beyond
the scope of statutory provisions under the Act. The distribution licensee

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is obliged to and can charge for electricity supply only in accordance
with the tariff fixed by MERC.

7.25 Section 62 of the Act, further requires the Appropriate Commission to
determine the tariff in accordance with the provisions of the Act, and as
per the parameters set out under Section 62(3) of the Act. Hence,
classification of consumers into a particular tariff category cannot be on
the basis of certificate to be issued by the State Government Authority.

7.26 In the circumstances, it is submitted that coverage of mobile towers
under the Industrial Tariff Category cannot be dependent on registration
with a State Government Authority, when other consumers consuming
electricity for same activity are covered under Industrial Tariff Category.
It is submitted that MERC in its impugned order dated 3.11.2016 has
failed to point out the intelligible differentia between IT/ITES consumers
having registration with the State Government Authority and those
IT/ITES consumers who do not have registration with the State
Government Authority, while making categorization dependent on such
registration. Therefore, the impugned order of MERC does not make at
rational classification and is arbitrary.

(h) Mobile towers are in any case required to be covered under
Industrial tariff category

7.27 Assuming while denying, that the electricity consumed by the mobile
towers of the Appellant is not for IT/ITES activities, it is submitted that
the Appellant and other mobile tower companies provide essential

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services to the public at large through mobile towers, and thus they
cannot be placed along with other consumers in Commercial Category.

7.28 It is not disputed that the electricity that is consumed by the mobile
towers of the Appellant is in turn utilized for providing essential services.
As submitted hereinabove, while categorizing a consumer, the
parameters under Section 62(3) of the Act are required to be seen. One
of such crucial parameters is the ‘purpose for which the supply is
required’. The real meaning of expression ‘purpose for which the supply
is required’ as used in s. 62(3) of the Act does not merely relate to the
nature of the activity carried out by a consumer but has to be necessarily
determined from the objects sought to be achieved through such activity.
It is submitted that clearly the object of the Appellant is to cater to the
requirements of the public at large.

7.29 Even MSEDCL has recognized the aforesaid in its additional
submissions in Case No.121 of 2014, wherein it prayed for
recategorization of mobile towers in a separate sub-category of ‘Service
Industries’ under Industrial Category.

7.30 It is submitted that the failure on the part of the State Commission to
properly exercise the discretion vested under s. 62(3) of the Act not only
is violative of the said section but also violative of Art. 14 of the
Constitution. As a matter of fact, the Appellant being treated equal with
malls, restaurants, and other commercial establishments would amount
to treating unequals as equals.

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7.31 In support of its aforesaid submissions, the Appellant relies upon the
following judgments:

(i) APTEL’s decision dated 31.5.2009 in the case of Mumbai
International Airport v/s MERC and another (paragraphs 67
to 78)

(ii) APTEL’s decision in the case of Association of Hospitals v/s
MERC (paragraphs 26, 30, and 37)

(iii) Bangalore Water Supply Sewarage Board v/s A. Rajappa
and others, reported in (1978) 2 SCC 213 (paragraph 140)

In light of the aforesaid submissions, the prayers sought by the Appellant in
present Appeal No.28 of 2017 may be granted.

ADDITIONALWRITTEN SUBMISSIONS ON BEHALF OF THE APPELLANT

7.32 It is stated that during the pendency of the aforesaid appeals before this
Tribunal, and pursuant to the sanction of a Scheme of Arrangement by
the Hon’ble National Company Law Tribunal, Mumbai Bench and the
Hon’ble National Company Law Tribunal, Ahmedabad Bench, the
Appellants in Appeal No. 29 of 2017 (i.e. Vodafone India Limited) and
Appeal No.33 of 2017(i.e. Vodafone Mobile Services Limited) have
amalgamated with the Appellant in Appeal No.28 of 2017 (i.e. Idea
Cellular Limited). Further, Idea Cellular Limited has been renamed as
Vodafone Idea Limited. It is stated that written submissions in the
aforesaid appeals have already been filed on behalf of the Appellant on
12.10.2017 in Appeal No.28 of 2017, on 13.7.2018 in Appeal No.29 of
2017 and on 13.7.2018 in Appeal No.33 of 2017.

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7.33 The present additional written submissions are being filed on behalf of
Vodafone Idea Limited in the aforesaid Appeal No.28 of 2017, Appeal
No.29 of 2017, and Appeal No.33 of 2017 in respect of the oral
submissions made in rejoinder during the course of hearing of the said
appeals before this Tribunal, and also to counter the new submissions
made in the written submissions filed by Respondent No.2 –
Maharashtra State Electricity Distribution Company Limited (‘MSEDCL’)
in its written submission dated 5.8.2019.

I. There has been no proposal/prayer in the petition filed by MSEDCL
before the Maharashtra Electricity Regulatory Commission (‘MERC’)
seeking recategorization of mobile towers from Industrial Tariff Category
to Commercial Tariff Category.

7.34 During the course of oral arguments, the Respondents have placed
reliance upon a schedule to the petition (Case No.48 of 2016) produced
at Pg.1164 in Appeal No.29 of 2017 to contend that the MSEDCL had
proposed recategorization of mobile towers. However, a perusal of the
said schedule makes it evident that the proposal was limited to cover
such IT/ITES units under Commercial Tariff Category, which have not
received permanent registration certificate under the applicable
Government of Maharashtra Policy. In fact, perusal of the entire petition
would reveal that the words “mobile tower” are not featured at any place.
Inspite of the said fact, MERC in the impugned order at Para. 8.23 has
specifically dealt with “Tariff for Telecommunication Towers”.

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II. The categorization of mobile towers under the Industrial Tariff Category
by MERC since 2004 is not on the basis of its coverage under the
applicable IT/ITES Policy alone.

7.35 It is submitted that there is no finding by the MERC in any of the tariff
orders that mobile towers are to be covered under the Industrial Tariff
Category only owing to its coverage under the applicable IT/ITES Policy.
In fact, the MERC has consistently held:

“As regards MSEDCL’s proposal to classify certain telecom towers, etc., under
commercial category, irrespective of whether they were covered under the IT
ITES Policy of the Government of Maharashtra, no rationale has been
submitted by MSEDCL for this specific proposal…. the Commission does not
agree with MSEDCL’s proposal in this regard and rules that IT ITeS will be
charged at industrial rates (HT and LT rates, as applicable), without getting into
the details of whether mobile towers and commercial broadcasting towers and
all other similar activities are covered under the Government of Maharashtra
Policy on IT ITeS.” (emphasis supplied)

7.36 From the foregoing it becomes evident that mobile towers have been
treated as Industrial Category consumers, even independent of its
coverage under the applicable IT/ITES Policy. It is only in the impugned
order that MERC for the first time has ruled that the mobile towers would
be covered under the Commercial Tariff Category unless they are
covered under the applicable IT/ITES policy of the Government of
Maharashtra, and that too without assigning any reasons for such a shift
in its earlier consistent position.

III. The distinction sought to be made by MSEDCL between
‘Telecommunication’ and ‘Information Technology’ is untenable.

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7.37 MSEDCL has sought to contend that “Information Technology and
Telecommunication industry are altogether different”. The said
contention is not only untenable but also contrary to the MSEDCL’s own
claim that the mobile towers were being covered under Industrial Tariff
Category upto the date of the impugned order owing to its coverage
under the applicable IT/ITES Policy of the Government of Maharashtra
at the relevant point of time. In fact, it is the case of the Respondents
that the mobile towers would cease to be covered under the Industrial
Tariff Category only because of lack of a registration certificate under
the prevalent IT/ITES Policy of the Government of Maharashtra.

7.38 Moreover, it is a fact that the data centres of the telecommunication
companies as well as mobile towers in some of the cases have been
given registration certificates under the prevalent IT/ITES Policy of the
Government of Maharashtra.

IV. The contention of MSEDCL in its written submissions dated 5.8.2019
that since some of the mobile towers are rented or leased, the same are
commercial consumers, is untenable.

7.39 At the outset, it is submitted that the aforesaid argument of MSEDCL
has been canvassed for the first time in its written submissions dated
5.8.2019. It is submitted that neither in the pleadings nor during the
course of oral arguments has MSEDCL made the aforesaid argument. In
the circumstances, such arguments made as an afterthought may not be
considered by this Tribunal.

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7.40 Without prejudice to the foregoing, it is submitted that for classification of
consumers into a tariff category as per Section 62(3) of the Electricity
Act, 2003, the relevant State Commission is required to categorize
consumers, inter alia, on the basis of the purpose for which the
electricity supply is required. It is submitted that irrespective of whether
the mobile towers are leased/rented or used for captive use, the
electricity supply to the mobile towers is for the purpose of providing
essential service of telecommunication.

7.41 It is an unpalatable argument that since some of the mobile towers may
be leased/rented to telecommunication companies, the electricity supply
to such mobile towers cease to be covered within the Industrial tariff
category. To illustrate: A residential unit, which is leased/rented by the
owner to a tenant would not cease to covered under Residential tariff
category and be covered under Commercial tariff category. In any case,
as far as the present Appellant is concerned, it is a telecommunication
service provider and not an infrastructure company.

V. The service provided by the Appellant through its mobile towers is an
essential service, and the mobile towers are required to be covered
under Industrial tariff category irrespective of whether it is an IT/ITES
unit.

7.42 The Department of Telecommunication, Ministry of Communications
Information Technology, Government of India in its Advisory Guidelines
for State Governments effective from 1.8.2013 has clearly identified that
services provided through mobile towers are essential services. The
relevant portion of the said Advisory Guidelines state as follows:

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“…III. Telecom towers have been given infrastructure status by
Government of India vide gazette notification no 81 dated
28.03.2012. All benefits, as applicable to infrastructure industry,
should be extended. Electricity connection may be provided to BTS
site on priority.

IV. Telecom installations are lifeline installations and a critical
infrastructure in mobile communication. In order to avoid disruption
in mobile communication, an essential service, sealing of BTS
towers/disconnection of electricity may not be resorted to without
the consent of the respective TERM Cell of DoT in respect of the
EMF related issues…” (emphasis supplied)

7.43 MSEDCL has itself submitted and prayed in its additional submissions in
Case No.121 of 2014 that mobile towers may be recategorized in a
separate sub-category of ‘Service Industries’ under Industrial
Categoryalong with Telephone Exchanges, Telecom industries, IT/ITES
Industries, Data Centres.

8. Learned Counsel, Mr. Sandeep Deshmukh appearing for the
Appellant in Appeal No. 353 of 2017 has made following arguments/
submissions for our consideration:-

8.1 Three policies declared by the State of Maharashtra, being in 2003,
2009 and 2015. All policies specifically provide that, “incentives” are
required to be provided to IT/ITES. Hence electricity has to be
supplied at “Industrial” rate (and not commercial). So the policy
maker has been clear with the fact that, this relevantly new industry
of IT/ITES has to be provided with certain incentives as a policy to
encourage the new advancement of technology.

8.2 Four (4) times the Respondent MSEDCL made L.m successful attempts
to re-categorise the IT/ITES qua electricity tariff and sought to apply
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“commercial” tariff, which is contrary to the State policy that has been
consistent since 2003. Order dated 07.11.2012 passed by the MERC,
struck down fourth attempt to re-categorise and granted liberty to
MSEDCL to approach the appropriate forum for re-categorisation.

8.3 Impugned order dated 03.11.2016, allows the petition by MSEDCL,
takes a view contrary to all earlier orders passed by Commission and
APTEL from time to time. The order passed by MERC is without any
appropriate reasons to ratify the change in tariff. The process of re-
categorization by MSEDCL is completely Violative of the public
policy promulgated by the State of Maharashtra from 2003 to 2015.
The State of Maharashtra has dominion power to issue policy and
neither the wings/arms of State Government, which includes various
departments, nor the MERC has any power prevailing over the
same. Thus, it is within domain of State of Maharashtra to issue a
policy so as to grant various benefits in the nature of “incentives”
and once the said policy is promulgated, none other than the State
of Maharashtra can bring any variation in the same.
8.4 The State Commission (MERC) is constituted in terms of provision of
Section 82 of Electricity Act, 2003 and the functions are detailed under
Section 86 therein. On perusal of the said functions it is apparent that,
the State Commissioner is not empowered either to frame a “Policy” qua
providing “incentives” to any sector consuming the electricity nor to lay
down further eligibility criteria so as to enable the industries to avail the
“incentives” enumerated under the state policy. The State Commission
can at best determine the tariff, prompt co­ generation, adjudicate
disputes between the licencees and generating companies, levy fees,

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specify or enforce standards with respect to quality, continuity
and reliability of service by licencees, fix trading margins, facilitate
intra state transmission and such other functions as may be
assigned under the Act. The Act nowhere permits the State
Commission to either lay down an exhaustive Policy qua providing
incentives to industrial units of any nature or type nor does it permit
the State Commission to lay ‘down eligibility criteria for the beneficiaries
of State Policies to avail the benefits under State Policy. As a matter
of fact, even if liberty was granted in favour of MSEDCL to apply the
appropriate forum for the purpose of ‘re-categorization vide order dated
07.11.2012, the said liberty has been wrongly availed by the MSEDCL.
Since, decision to apply “industrial” tariff to IT/ITES is a policy
decision by the State of Maharashtra, it is the State of Maharashtra
which ought to have been moved by the MSEDCL and not the
MERC which neither has any competence nor jurisdiction to consider
the said issue. It is also for the reason that it is the State of
Maharashtra whose policy is sought to be intervened by its
instrumentality, without any power and authority.

8.5 The impugned order wherein the State Commission (MERC) directs the
Appellant to produce various registration certificates for being avail to
avail the benefit of “incentives” under the State Policies is completely
without jurisdiction and is in fact, over reach of powers and functions
vested with it.

8.6 The impugned order is also bad on account of violation of Section 62(3)
of Electricity Act, 2003 for not considering the same before deciding to

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re-categorize the industrial tariff applicable to the Appellants.

9. Learned Counsel, Mr. Gaurav Mitra appearing for the Appellant /
Reliance Jio Infocom Ltd. in the batch of Appeals has made
following arguments/ submissions in the batch of Appeals for our
consideration:-

9.1 The Impugned Order arises out of a petition filed by the Respondent
No.2, being Case No. 48 of 2016. Also, being aggrieved by the
Impugned Order, Reliance Jio Infocomm Ltd. (‘RJIL’) had filed an
impleadment application by way of I.A. 940 of 2017 (“Impleadment
Application”), and the Tribunal had been pleased to allow such
impleadment by its order dated 08.11.2017. Thereafter, pursuant to a
composite scheme of arrangement, all assets and liabilities of Reliance
Jio Infocomm Ltd. pertaining to its Tower Infrastructure, including but not
limited to its wireless and broadcast towers and sites, that host or assist
in the operation of plant and equipment used for transmitting
telecommunication signals have been transferred to Reliance Jio Infratel
Pvt. Ltd. and accordingly Reliance Jio Infratel Pvt. Ltd sought
impleadment in addition to RJIL by way of I.A. 1176 of 2019.

9.2 The telecom service providers, including RJIL, in the present batch of
appeals are aggrieved by the Impugned Order of the Respondent No.1
requiring such telecom service providers to get specific certification for
their mobile/ telecom towers under the IT/ITES Policies of the
Government of Maharashtra to avail industrial tariffs and in the absence
thereof, such telecom service providers are to be charged at commercial
tariffs.

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9.3 The IT/ITES Policies of the Government of Maharashtra are issued by
the Department of Industries, Energy and Labour for the purposes of
providing fiscal benefits to IT/ITES Industries and cannot be used to
supplant tariff orders of the Respondent No.1. It is to be emphasized
that the Electricity Regulatory Commission has to independently
exercise its mind in classification as per the mandate led down under the
Electricity Act, 2003. Registration under the Maharashtra IT/ITES policy
has no relevance and cannot supplant the independent exercise of
power by the Commission.

9.4 It is pertinent to note that the Respondent No.1 has consistently held, in
its previous orders, that telecom towers are to be charged at industrial
rates irrespective of the IT/ITES Policies of the Government of
Maharashtra.

9.5 In fact, Respondent No.2 has on multiple occasions sought re-

categorization of telecom towers from ‘industrial’ to ‘commercial’ and the
such requests of the Respondent No.2 have been declined by the
Respondent No.1.

9.6 The Respondent No.2, by its circular dated 26.06.2009 had sought to
charge telecom service providers commercial tariffs instead of industrial
tariffs. However, the same was challenged by TATA Teleservices
(Maharashtra) Ltd. by way of writ petition, being WP. 6702 of 2009 and
the Hon’ble High Court of Bombay was pleased to grant a stay of the
operation of the circular dated 26.06.2009 issued by Respondent No.2.
Thereafter, the Respondent No.2 issued a circular dated 20.04.2010

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restoring the status of mobile/ telecom towers as industrial undertaking
and charging them at industrial rates.

9.7 The Respondent No.2 again sought re-categorization of mobile/ telecom
towers from industrial tariff to commercial tariffs by its petition, being
Case No. 116 of 2008 for the years 2009-10. The prayer of Respondent
No.2 seeking such re-categorization was rejected vide order dated
17.08.2009.

9.8 The Respondent No.2 again sought re-categorization of mobile/ telecom
towers from industrial to commercial by its petition, being Case No. 111
of 2009 for the years 2010-11. The Respondent No.1 was pleased to
reject such request of Respondent No.2 by its order dated 12.09.2010.
While rejecting the request for re-categorization made by Respondent
No.2, the Respondent No.1 had re-iterated its rationale for denying such
re-categorization as stated in its previous order dated 17.08.2009.

9.9 In fact, Respondent No.2 has in communications and circulars dated
03.05.2012 has stated that mobile/ telecom towers are to be
categorized as in the industrial category.

9.10 Even though, by their own circulars (in paragraph 6 above), the
Respondent No.2 has sought to categorize mobile/ telecom towers in
the industrial category, it again sought to bring mobile/ telecom towers
under the category of LT-II Commercial or HT-II Commercial by its
petition, being Case No. 19 of 2012 for the financial year 2012- This
request for re-categorization by the Respondent No.2 was approved by
the Respondent No.1 by its order dated 16.08.2012. Against the order of

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the Respondent No.1 dated 16.08.2012, Appeal nos. 234, 235, 211 and
215 of 2012 were filed before the Appellate Tribunal for Electricity
(“APTEL”). Upon hearing the appeals, APTEL set aside order of the
Respondent No.1 dated 16.08.2012 .

9.11 Thus, it is demonstrated from the aforementioned paragraphs that ever
since 2004, the Respondent No.1 has categorized mobile/ telecom
towers in the industrial category and has rejected repeated requests of
the Respondent No.2 to re-categorize mobile/ telecom towers from
industrial to commercial. Furthermore, even when the Respondent No.1
sought to permit such re-categorization, the same was set aside by the
APTEL by its order dated 16.08.2012. It is to be emphasized that
Respondent No.1 has consciously and independently applied its mind in
categorising mobile/ telecom towers in the industrial category and
expressly rejecting any attempt to link such categorisation with
Government of Maharashtra IT/ITES policy.

9.12 Thereafter, the Respondent No.2 sought to create a separate category
for the telecom industry and IT/ITES Industry by its petition, being Case
No. 121 of 2014 for the years 2013-14 to 2015-16. The Respondent
No.1 passed order dated 26.06.2015, wherein it reiterated the rationale
of its previous order dated 17.08.2009 but still added an additional
paragraph stating “…only if they are covered as IT/ITES and the
provisions of GoM’s Policy apply to them.” It is important to highlight that
even subsequent to the order dated 26.06.2015, the telecom industries
continued to be charged industrial tariffs.

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9.13 The Impugned Order, while re-iterating its rationale in order dated
17.08.2009, the Respondent No.1 added a paragraph stating
“Telecommunication towers shall be covered under the Commercial
category, unless specifically included in the IT and ITES Policy of the
Government of Maharashtra for coverage under the Industry category.”

9.14 It is submitted that Paragraph 8.23 of the Impugned Order of the
Impugned Order, nowhere gives any reasons for such additional
language which requires that mobile/ telecom towers are to be
specifically included in the IT/ITES Policy of the Government of
Maharashtra to be able to get the benefit of industrial tariffs.

9.15 On the contrary the Impugned Order re-iterates its earlier order dated
17.08.2009, wherein the Respondent No.1 has held that “The
Commission has consciously included IT and IT enabled Services (IT
and ITES) under the industrial category (HT and LT as applicable) in the
Tariff Order for the erstwhile MSEB in 2004. Since then, the IT ITES
category continues to be charged at industrial tariffs. In the existing
Tariff Schedule of MSEDCL as well as the approved Tariff Schedule for
the distribution licensees in Mumbai issued in June, 2009, the
Commission has included IT ITES category under industrial category.
Hence, the Commission does not agree with MSEDCL’s proposal in this
regard and rules that IT ITES will be charged at industrial rates (HT
and LT as applicable), without getting into the details of whether
mobile towers and commercial broadcasting towers and all other
similar activities are covered under the Government of Maharashtra
Policy on IT ITES.” Thus, it can be seen from the aforementioned that

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the Respondent No.1 holds that telecom/ mobile towers should be
charged industrial tariffs regardless of whether such activities are
covered under the IT/ITES Policy of the Government of Maharashtra.

9.16 It is submitted that Respondent No.1 has incorrectly averred that the
Respondent No.1 does not apply and is not required to apply its mind to
preparation of tariff orders. However, it is an admitted position that the
Respondent No.1 has rejected multiple requests of the Respondent
No.2 for re-categorization of mobile/ telecom towers from industrial to
commercial by way of its reasoned orders dated 17.08.2009 and
12.09.2010. Therefore, the Respondent No.1 has applied its mind and
given reasoned order as to mobile/ telecom towers to be charged at
industrial tariffs instead of commercial tariffs.

9.17 Furthermore, it is submitted that in the Impugned Order, the additional
language in the order requiring specific coverage under the IT/ITES
Policy so as to get the benefit of industrial tariffs has not been prayed for
or sought by the Respondent No.2. Thus, RJIL and other interested
telecom service providers were not given any notice of such change and
therefore did not have the opportunity to discuss/ debate the feasibility of
the requirement of being necessarily covered under the IT/ITES Policy
of the Government of Maharashtra. A perusal of the Impugned Order
itself makes it evident that there was no reasoned proposal/ specific
prayer on behalf of Respondent No.2, no discussion and/or reason by
Respondent No.1 and no opportunity to any stakeholders. On the other
hand a complete 360 degree change requiring registration under the
Government of Maharashtra fiscal policy, as required by the Impugned

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Order, shows total abdication of responsibilities by the Respondent
No.1.

9.18 It is submitted that Section 62(3) of the Electricity Act, 2003 (“Act”) gives
the ‘Appropriate Commission’ the power for tariff determination and even
states that such commission (in this case Respondent No.1) can
differentiate “according to the consumer’s load factor, power factor,
voltage, total consumption of electricity during any specified period or
the time at which the supply is required or the geographical position of
any area, the nature of supply and the purpose for which the supply
is required.”Furthermore, Section 61 and 86(1)(a) also require the
Commission to determine tariff independently. Therefore, it has been
incorrectly argued by the Respondent No.1 that it does not apply its
mind to tariff determination as it is required to do so under the Act.

9.19 Following are the submissions as regards caselaw provided by
Respondent no.1:-

(i) BSNL v Union of India – reported as (2006) 3 SCC 1
a. The captioned judgment deals with whether provision of mobile
connections to consumers is a manufacturing activity or not. It was
held the provision of mobile connections is not a manufacturing
activity and therefore is not an industrial activity and therefore no
sales tax can be levied.

b. In the instant appeal, the ratio of the above captioned judgment
does not apply as the present appeal does not deal with the
provision of mobile connections but as regards the levy of
commercial tariffs as opposed to industrial tariffs on mobile/

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telecom towers. The same is not related to whether mobile/
telecom towers are to be considered to be manufacturing activity
or not as the Respondent No.1 has repeatedly held that mobile/
telecom towers are to be charged industrial tariffs by virtue of
being an IT/ITES Industry.

(ii) BSNL v PSERC – being Appeal No. 116 of 2006 before the APTEL
a. The above captioned judgment of the APTEL is factually distinct
from the present batch of appeals. This judgment deals with
telephone exchanges not being industrial and therefore is not
applicable to the facts of the instant appeal.

b. In fact, Paragraph 6 of the judgment holds that “… The arguments
of the learned counsel that the offices and telephone exchanges of
the appellant should be treated as an industry, in view of the
provisions of the Finance Act, Industrial Disputes Act, Factories
Act and Employees’ State Insurance Act, cannot be accepted. The
categorization, as already pointed out, depends upon the factors
which are relevant to the Electricity Act, 2003 particularly,
subsection (3) of Section 62. It is possible that the appellant may
fall under the category of ‘Industry’ on applying the meaning of
term ‘Industry’ as it is found in the other Statutes but that cannot
be the basis to determine whether the appellant is to be charged
tariff by treating it as an industry. The appellant has not shown any
violation of the Electricity Act, 2003 or the Regulations framed
thereunder in charging the tariff from it under the non-residential
supply category.”

c. Furthermore, Paragraph 7 of the judgment holds that “it will not be
correct to borrow the definition of ‘industry’ from ‘other statutes’ for
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the purpose of holding that the appellant ought to be billed as per
Industrial Tariff”.

d. Therefore, it is apparent that the above quoted paragraphs of the
judgment require the Respondent No.1 to take independent
decisions as regards categorization of consumer and cannot
abdicate its responsibility, as is required under Section 62(3) of the
Act, to other legislations or policies such as the IT/ITES Policy.
The Impugned Order, on this ground, is liable to be set aside

(iii) Tata Teleservices Limited v RERC – being Appeal No. 88 of 2012
a. The above captioned judgment in Paragraph 42 holds that “The
learned Counsel for the Appellant relies upon the Clause 2.9.4 of
the IT and ITES policy, 2007 wherein the State Government has
changed the applicable category of tariff from commercial to low
tension industrial category for IT and ITESunits”
b. The above captioned judgment in Paragraph 43 holds that “IT
Policy and other policies issued by the State Government and
classification made by the State Government for providing
incentives under various programmes etc., do not have any role in
tariff determination process. It cannot be denied that the jurisdiction
for change of categorization is of the State Commission and not the
State Government”.

c. The above captioned judgment in Paragraph 48 holds that “In
regard to the reliance of the IT Policy issued by the State
Government, the learned Counsel for the State Commission has
correctly pointed out that this Tribunal in a number of cases has
held that even the directions of the State Commission u/s 108 of the

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Electricity Act, 2003, are not binding on the State Commission while
determining the tariff”

d. The above captioned judgment in Paragraph 49 holds that “In view
of the settled position of law, it has to be observed that the policy of
the State Government is not binding on the State Commission and it
has to determine the tariff in accordance with the Act and
Regulations framed therein.”

e. In light of the above, the State Commission, being Respondent No.1
cannot abdicate its responsibility of making tariffs determination to
policies of the State Government and therefore must apply its own
mind and make an independent decision as regards tariff
categorization. On this ground alone the Impugned Order is liable to
be set aside.

9.20 In the present appeal, the Impugned Order does not independently take
a conscious decision to treat mobile towers as commercial and not
industrial on the reasoned finding that there is no manufacturing activity.
No such exercise is carried out by the Commission either to classify
mobile towers as industrial or commercial. The Impugned Order simply
displays a simple abdication by the Commission of responsibilities and
duties under the Electricity Act, 2003. The challenge to the Impugned
Order is premised on the ground that instead of any independent
classification done by the Commission, the Appellants are relegated to
registration under Government of Maharashtra fiscal policy in order to
decide whether one will be treated commercial or industrial tariffs which
cannot be countenanced in law.

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9.21 Therefore, for the reasons set out above, the Impugned Order must be
set aside to the extent it requires mobile/ telecom towers to be
registered under the IT/ITES Policy of the Government of Maharashtra
to be able to avail of industrial tariffs.

10. Learned Counsel, Mr. Buddy A. Ranganadhan appearing for the
Respondent NO.1 / Maharashtra Electricity Regulatory Commission
has made following arguments/ submissions in the batch of
Appeals for our consideration:-

10.1 It is contended on behalf of the Appellants that the Respondent
Commission in its Order dated 3 November, 2016 has wrongly
categorized Telecommunication Towers under Commercial category,
unless specifically included in the Information Technology (IT) and
Information Technology Enabled Services (ITES) Policy of the
Government of Maharashtra (GoM) for coverage under the Industrial
category.

10.2 The principal argument of all the Appellants is that the Commission has,
in the impugned order, taken a complete U-turn and treated telecom
towers as “commercial” when they were hitherto being treated as
“industrial”. One or two instances of such argument are extracted below:
Bharti Airtel Written Submissions:

“Till the passing of the impugned order, the distribution licensee had understood and
implemented the tariff orders as categorising the Mobile and broadcasting towers
under the Industrial Category..”

Tata Teleservices Written Submissions
“…the state commission without disclosing rationale, reasoning or basis has
converted the tariff category of mobile towers and related telecommunications
instalments of the Appellant Company from industrial to commercial..”

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‘This decision of the Respondent Commission is completely contrary to its
previous Orders and the classification existing from more than 10 years
wherein it was specified that the Industrial category is made applicable to Mobile and
Broadcasting Towers irrespective of whether such towers are covered by the
Government of Maharashtra Policy.’

10.3 The aforesaid argument is entirely incorrect, inter alia, on account of the
following:

(i) In all its previous orders including in the current Impugned Order
the Commission had not classified “Telecom Towers” as
“Industrial”.

(ii) The dispensation always considered by the Commission from
2007 till the current Impugned Order is that an activity which is
covered by the IT and ITES policy of the Government of
Maharashtra would be charged an Industrial Tariff.

(iii) The Commission had never given a finding as to whether the
“Telecom Towers” were in fact covered by the IT and ITES policy
or not. In fact, the Commission holds, that it has not gone into the
issue as to what activities are covered by the IT and ITES policy or
not.

(iv) If the Telecom Towers were covered by the IT and ITES policy,
they would be charged Industrial Tariff and all they had do was to
show the distribution licensee that they were covered by the IT
and ITES policy of the Government of Maharashtra .

(v) The very same dispensation which was brought in year on year
was continued from 2004 till the Impugned Order as well and the
Commission has not made any change at all.

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a. MERC order dated 10.3.2004 (Case No. 2 of 2003)

10.4 On the issue of considering IT industries and ITES under the Industrial
category for the purpose of electricity tariff of the Maharashtra State
Electricity Distribution Co. Ltd (MSEDCL) :

1.11.3 Commission’s Ruling

“The Consumers in the Information Technology (IT) and Information Technology
Enabled Services (ITES) sector are currently classified under the commercial
category and charged accordingly. As the commercial category is a subsidizing
category the tariffs are high for these categories. The Commission has been
receiving applications from such consumers requesting that they should be classified
under LT industrial category, for the purposes of tariff determination. In July 2003,
the GoM announced the IT and ITES Policy,2003 for promoting business and
enterprise in the IT industry, to make Maharashtra the most favoured destination for
investments in the IT and ITES industry. In the context of the infrastructure support
to the IT and ITES sector, the Policy specifies under Clause 4.2 (h) that “Levying of
power charges on IT and ITES units at industrial rates and notifying IT and ITES
units as a separate category of consumers through MERC.”
‘In line with the IT and ITES Policy announced by the GoM and the stated
philosophy of the Commission in the previous Orders, the Commission has
included the Low Tension IT industry and IT enabled services (as defined in
the GoM Policy) in the LTP-G category for the purposes of tariff determination.
The Commission has decided against creation of a new category for IT and ITES
sector, in line with its stated philosophy of reducing the number of consumer
categories and consumption slabs, over a period of time.’
From this Order onwards, the Respondent Commission has categorized IT industries and
ITES, as covered in IT and ITES Policy of GoM under the Industrial tariff category.

b. MERC order dated 17.8.2009 (Case No. 116 of 2008)

10.5 In its Tariff Petition in Case No. 116 of 2008, MSEDCL had made the
following proposal regarding the categorization of Mobile Towers:-
“MSEDCL is authorized to decide the tariff category of the consumer based on the
usage of electricity. The IT and IT enabled industry is classified by the Industry
Department. The mobile towers and the commercial broadcasting towers and all
other similar activities are proposed to be classified under commercial category.”

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10.6 During the public consultation process on this Petition, the following
objections were recorded in respect of the above suggestions of
MSEDCL.

“Bharti Airtel Limited (Airtel) submitted that MSEDCL’s proposal to create a specific
exemption for mobile towers and commercial broadcasting towers and all other
similar activities, conveys MSEDCL’s admission that the electricity consumption for
such activities falls within the definition of industry as envisaged under IT and ITES
Policy of Government of Maharashtra. Otherwise, there was no requirement for
MSEDCL to seek a specific exception for the first time in 2009. Airtel submitted that
MSEDCL has been wrongfully denying ‘industry tariff’ to this Objector, and illegally
charging commercial tariff for mobile towers and commercial broadcasting and other
similar activities and MSEDCL needs to refund all such illegal levies and excess
collection.”

10.7 The Respondent Commission, in its Tariff Order dated 17 August, 2009,
ruled on the above issue as follows:

“As regards MSEDCL’s proposal to classify certain telecom towers etc under
commercial category, irrespective of whether they were covered under the IT ITES
Policy of the Government of Maharashtra, no rationale has been submitted by
MSEDCL for this specific proposal. The Commission had consciously included IT
and IT enabled Services (IT ITES) under industrial category (HT and LT as
applicable) in the Tariff Order for the erstwhile MSEB in 2004. Since then, the IT
ITES category continues to be charged under industrial tariffs. In the existing Tariff
Schedule of MSEDCL as well as the approved Tariff Schedule for the distribution
licensees in Mumbai issued in June 2009, the Commission has included IT and ITES
category under industrial category. Hence, the Commission does not agree with
MSEDCL’s proposal in this regard and rules that IT ITES will be charged at
industrial rates (HT and LT rates, as applicable), without getting into the
details of whether mobile towers and commercial broadcasting towers and all
other similar activities are covered under the Government of Maharashtra
Policy on IT ITES.”

10.8 While deciding on MSEDCL’s proposal to categorize all Mobile Towers
(irrespective of its covered under GoM’s IT and ITES Policy) under
Commercial category, the Respondent Commission in its Order
reproduced above had not dealt with the issue of which activities,

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including Mobile Towers, are covered under GoM’s Policy. The
Respondent Commission’s above decision was only that all activities
covered under GoM’s IT and ITES Policy should get the benefit of
industrial tariff, as had also been decided by the Commission in its
earlier Tariff Order dated 10 March, 2004 in Case No.2 of 2003. It
was upto MSEDCL to verify the coverage of activity under GoM’s Policy
before giving it the benefit of Industrial Tariff or otherwise.

10.9 It may be noted that the Commission did not hold that “telecom
towers” would be categorised as “industrial”. The Commission only
held that “all activities” covered under the IT and ITES policy would be
treated as “industrial”. The Commission also clearly held that the above
dispensation was “…without getting into the details of whether
mobile towers ….. and all other similar activities are covered under
the Government of Maharashtra Policy on IT ITES…”

c. MERC order dated 12.9.2010 (Case No. 111 of 2009)

10.10 MSEDCL had made the following prayers in its Tariff Petition in Case
No. 111 of 2009.

“k) Approve re-categorization of IT and ITES, Mobile Towers,
BPO Centres, etc. under the Commercial category.”
In support of its prayer, MSEDCL had made the following submissions in its
Petition:

“As per the Tariff Order, any office with intensive use of computers is commercial
(being non-domestic). However, as per IT Policy, “Back Office operation relating to
computerized data” and “other services provided with the extensive use of
computers” is covered under IT services IT enabled services and is eligible for
industrial tariff. Actually, office operation is covered under commercial category.
BSNL activity the mobile based communication (GPRS CDMA) and its allied cell
sites (Towers) are also included under IT units as per amendment dated April 8,

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2005. Actually usage of phone and mobile at cost with interaction of consumers is a
commercial activity but is covered under IT unit thereby enabling them to demand for
industrial tariff.”

“MSEDCL submitted that it is essential to review the activities eligible for registration
as IT services IT enabled services in IT ITES Policy, as these activities will be
eligible for industrial tariff as against their commercial activity.”
“MSEDCL also submitted that the Mobile Towers are not declared under IT Policy to
be Industries. Hence, MSEDCL has proposed that the Mobile towers be classified
under commercial category.”

“MSEDCL is authorized to decide the tariff category of the consumer based on the
usage of electricity. The IT and IT enabled industry is classified by the Industry
Department. The mobile towers and the commercial broadcasting towers and all
other similar activities are proposed to be classified under commercial category”.

10.11 The Respondent Commission in its Tariff Order dated 12 September,
2010 has ruled on above issue as follows:

Commission’s Ruling

“A similar issue was raised by MSEDCL in its previous APR Petition in Case
No.116 of 2008. The Commission has ruled on this matter in the previous APR
Order dated August 17, 2009. The relevant extract of the Commission’s APR Order
dated August 17, 2009 is reproduced below:

‘The Commission has consciously included IT adn IT enabled Services
(IT ITeS) under industrial category (HT and LT as applicable) in the Tariff
Order for the erstwhile MSEB in 2004. Since then the IT ITeS category
continues to be charged under industrial tariffs. In the existing Tariff Schedule
of MSEDCL as well as the approved Tariff Schedule for the distribution
licensees in Mumbai issued in June 2009, the Commission has included IT
ITeS category under industrial, as reproduced below:
5 LT V: LT-Industrial
Applicability
Applicable for industrial use at LT voltage, excluding Agricultural
Pumping Loads. This Tariff shall also be applicable to IT Industry IT
enabled services (as defined in the Government of Maharashtra policy).”

1. HT 1: HT- Industry
Applicability
This category includes consumers taking 3-phase electricity supply at
High Voltage for industrial purpose. This Tariff shall also be applicable to IT

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Industry IT enabled services (as defined in the Government of Maharashtra
Policy).”

In view of the above, the Commission rules that IT ITeS will be
charged at industrial rates (HT and LT rates, as applicable), without
getting into the details of whether mobile towers and commercial
broadcasting towers and all other similar activities are covered under
the Government of Maharashtra Policy on IT ITeS.’
In case MSEDCL desires to modify the eligibility and applicability of the IT
ITES Policy itself, then MSEDCL may approach the appropriate forum for the
necessary relief.”

In its above Tariff Order, the Respondent Commission continued its practice of
categorizing the activities covered under GoM’s IT and ITES Policy in the
Industrial category. The Respondent Commission had once again not held
that Mobile Towers were ‘Industrial’.

d. MERC Order dated 16 August, 2012 in Case No.19 of 2012, APTEL
Judgment dated 7 November, 2012 in Appeal No.234, 235, 211 and 215 of
2011

10.12 The MSEDCL in its Tariff Petition in Case No.19 of 2012, had proposed
to categorize Mobile Towers under Commercial category. There was no
objection to this proposal during the public consultation process, and the
Respondent Commission in its Order dated 16 August, 2012 had
categorized Mobile Towers under Commercial category. However, the
rationale behind this decision was not explained in the Order. Aggrieved
by the above Order of the Respondent Commission, various Telecom
Operators filed Appeal Nos. 234, 235,211 and 215 of 2012 before this
Tribunal. Vide its Judgment dated 7 November, 2012, the Tribunal has
ruled on this matter as follows:

“9. In spite of this, the impugned order has been passed without any
discussion regarding change in the Appellants category. Though it is pointed out

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that the tariff schedule attached to the tariff order would indicate Mobile Towers,
Micro Wave Towers, Satellite Antennas used for communication activity in the LT/HT
Commercial Category there is no specific pleading or proposal in the petition.

10. As indicated by the Learned Counsel for the Appellants, Mobile Towers
etc prior to passing of the impugned order, were categorized under the Industrial
category and in fact the State Commission in the tariff order for the FY 2009-10
rejected the specific proposal of the distribution licensee for change in category from
Industrial to Commercial.

11. Despite this, the impugned order dated 16.8.2012 has been passed by
the State Commission changing the consumer category of the Appellants into
Commercial without any discussion or reasoning and without hearing the Appellants.
Thus, we notice that the principles of natural justice have been violated in the
present case.

12. We, therefore, deem it fit to set aside the portion of impugned order dated
16.8.2012 regarding re-categorisation of Mobile Towers, Micro Wave Towers,
Satellite Antennas used for communication activity to HT/LT Commercial Category
from HT/LT Industrial Category prevailing prior to the date of the impugned order.
Accordingly the same is set aside.

13. However, the distribution licensee (R-2) is given liberty to file a fresh
petition containing the proposal regarding re-categorisation of the Appellants in
appropriate tariff category before the State Commission which in turn shall consider
the same and pass the appropriate orders in accordance with law after hearing all
the concerned parties.

14. This order will apply to all the consumers coming under the specified
category of telecommunication towers. We must make it clear that we do not want
to go into the merits of the matter, and as such we are not giving any opinion on this
issue. It is for the State Commission to decide the issue after considering the
materials placed by the parties uninfluenced by the conclusion earlier arrived of.”

10.13 It is important to note that in the above judgment, this Tribunal has set
aside the Commission’s Order only on account of denial of principle of
natural justice. In point of fact there was no detailed finding on this issue
had been conceded by the Commission in the above matter (para 9 of
the judgment). Further, the Tribunal categorically stated that it has not
given any opinion on merits of the matter.

10.14 Some of the Appellants have sought to argue that the Commission has,
in the present impugned Order committed the same error that had been

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corrected by this Tribunal in the above judgment. The said contention is
entirely incorrect since:-

(i) The Impugned Order has not sought to change the classification that
has been holding the ground since 2004. Hence the question of violation
of natural justice cannot and does not arise.

(ii) The Impugned Order only repeats and reiterates word-by-word, the
earlier Order of 26th June 2015 which was not challenged by anyone on
this count. Hence, the Appellants are clearly estopped and barred from
impugning the self-same dispensation in the impugned Order.

(iii) It has been held by this Tribunal in the Bihar Steel Manufacturers Assn
Vs BERC Appeal No. 172 of 2010 judgment dated 18.5.2011that the
principles of constructive res-judicata will apply even to tariff
proceedings. Hence, if the Appellants had the opportunity of challenging
the dispensation in the 2015 tariff Order and chose not to do so, they
were estopped from impugning the same at this stage.

e. MERC Order dated 26 June, 2015 in Case No.121 of 2014

10.15 MSEDCL had made the following proposal in its Tariff Petition in Case
No.121 of 2014.

“6.24.1 MSEDCL has submitted that, in the Tariff Order in Case No.19 of 2012,
Mobile Towers and Telephone Exchanges were included in the Commercial
Category. As per the ATE Judgment dated 7 November, 2012 on the Appeal filed
by some telecom companies, the relevant part of the Tariff Order was set aside and
MSEDCL was directed to charge the Industrial tariff to Mobile Towers w.e.f. 1
August, 2012. ATE also ruled that MSEDCL may file a fresh Petition regarding the
appropriate tariff category for Mobile Towers, and the Commission may consider it
same and pass appropriate Order after hearing all the concerned parties.
6.24.2 In its MYT Petition, MSEDCL has now submitted that Mobile Towers are
devices which are used for transmitting telecommunication signals, and there is no
manufacturing or industrial activity. Accordingly, MSEDCL has proposed that the

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tariff for Mobile Towers should be as per the Commercial category only. MSEDCL
has stated that it is purely a commercial activity and the Commission had correctly
categorized it accordingly.

6.24. However, in its additional submission, subsequent to the Public Hearings,
MSEDCL has proposed to include Mobile Towers in a newly created sub-category of
Service Industries, under the main category of Industries, along with Telephone
Exchanges, Telecom Industries, IT/ITES Industries, Date Centres, etc.”

10.16 During the public consultation process the Respondent Commission
received the following suggestions and objections on the above proposal
of MSEDCL.

1.16.16 Mobile Towers: Shri Nilesh Ghape and Shri Rahul Kadu submitted that
Commercial tariff should be applied to Mobile Towers.
1.16.17 Bharti Airtel Ltd submitted that the Telecom sector has been notified as
an Infrastructure sector vide Government of India’s Notification 8 of 2012. Other
States, namely Andhra Pradesh and Rajasthan, have covered telecom loads under
the Industrial category as per their Information Technology (IT)/ IT-enabled Services
(ITES) Policies. Therefore, they ought to be classified as an industry as
distinguished from entities performing purely commercial activities.
1.16.18 Vodafone Cellular Ltd and Idea Cellular Ltd in their letters dated 27
and 22 May 2015, respectively, objected to MSEDCL’s proposal for reclassification
of Mobile Towers from the Industrial category to the Commercial category. Such
reclassification was sought by MSEDCL in its earlier Petition in Case NO.19 of 2012
and the Commission had allowed such reclassification in its Tariff Order. They
stated that the Order was challenged before ATE. The ATE granted liberty to
MSEDCL to file a fresh Petition, and the Commission was directed to pass an
appropriate Order after hearing all the concerned parties. The two objectors have
now submitted that they would be adversely affected by the reclassification
proposed by MSEDCL and in accordance with the ATE Judgment, sought an
opportunity to file their objections and to fix a date for hearing them.”

10.17 The Respondent Commission ruled on the above issue in its Tariff Order
dated 26 June 2015 as follows:

“Commission’s Ruling
6.24.4 The Commission in its Order in Case No.116 of 2008 dated August 17, 2009,
had discussed the categorisation of Mobile Towers in detail as follows:

‘As regards MSEDCL’s proposal to classify certain telecom towards, etc.
under commercial category, irrespective of whether they were covered under

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the IT ITES Policy of the Government of Maharashtra, no rationiale has
been submitted by MSEDCL for this specific proposal. The Commission had
consciously included IT and IT enabled Services (IT ITES) under industrial
category (HT and LT as applicable) in the Tariff Order for the erstwhile MSEB
in 2004. Since then, the IT ITES category continues to be charged under
industrial tariffs. In the existing Tariff Schedule of MSEDCL as well as the
approved Tariff Schedule for the distribution licensees in Mumbai issued in
June 2009, the Commission has included IT ITES category under industrial
category. Hence, the Commission does not agree with MSEDCL’S proposal
in this regard and rules that IT ITES will be charged at industrial rates (HT
and LT rates, as applicable) without getting into the details of whether
mobile towers and commercial broadcasting towers and all other similar
activities are covered under the Government of Maharashtra Policy on IT
ITES.’
“The Commission is of the view that the rationale and ruling of its earlier Order in
Case No.116 of 2008 should continue to apply. In other words the Industrial tariff
will apply to Mobile Towers or other activities cited by MSEDCL only if they are
covered as IT/ITES and the provisions of GoM’s Policy apply to them.”

10.18 While continuing the practice of categorizing activities under GoM’s IT
and ITES Policy in the Industrial category, in its above Order the
Respondent Commission has reiterated that the benefit of Industrial
Tariff can be availed by Mobile Towers only if they are covered by
GoM’s Policy. It is pertinent to note that the above ruling of the
Respondent Commission has not been challenged before this Tribunal
and hence has, attained finality.

The current impugned Order does nothing more than repeat and
reiterate the said 2015 Order.

f. MERC Order dt 3 November, 2016 in Case No.48 of 2016[Impugned
order]
10.19 During the public consultation process on MSEDCL’s Tariff Petition in
Case No.48 of 2016, the Respondent Commission received the

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following suggestions and objections regarding categorization of Mobile
Towers.

“VIA (Vidarbha Industries Association) stated that Mobile Tower operators are
getting undue advantage of the cross subsidised Industrial Tariff meant for Micro
and small-scale industry, Flour Mills and Welding Workshops i.e. Industries below
20 kW. The LT V(A) category has a Tariff below ABR. Therefore, due provision
should be made to ensure that this category comes under LT V(B) by prohibiting
such consumers from getting undue benefit of subsidy or by transferring them to
the Commercial category. Shri Suhas Joshi also suggested that mobile towers
should be classified under Commercial Tariff as they do not involve any
manufacturing process.

“Bharati Airtel Ltd stated that MSEDCL should charge Industrial Tariff for
consumption by mobile towers. Base Station Controllers (BSC) and Mobile
Switching Centres (MSC) requiring an Information Technology (IT) and IT-enabled
Services (ITES) Registration Certificate. In the previous MYT Order, the
Commission had rejected the proposal for categorization of mobile towers under
the Industrial category. However, under GoI’s Notification 8 of 2012, the Telecom
sector has been notified as an infrastructure sector.”
10.20 The Respondent Commission ruled on the issue of categorization of
Telecommunication Towers in its impugned Multi Year Tariff Order dated 3
November, 2016 as follows:

‘”8.23 Tariff for Telecommunication Towers:

The issue of tariff category applicable to telecommunications towers has been
decided by the Commission in its previous MYT Order as follows:
“6.24.4.:The Commission in its Order in Case No.116 of 2008 dated August 17,
2009, had discussed the categorisation of Mobile Towers in detail as follows:

‘As regards MSEDCL’s proposal to classify certain telecom towers, etc.,
under commercial category, irrespective of whether they were covered under
the IT ITES Policy of the Government of Maharashtra, no rationale has
been submitted by MSEDCL for this specific proposal. The Commission had
consciously included IT and IT enabled Services (IT ITES) under industrial
category (HT and LT as applicable) in the Tariff Order for the erstwhile MSEB
in 2004. Since then, the IT ITES category continues to be charged under
industrial tariffs. In the existing Tariff Schedule of MSEDCL as well as the
approved Tariff Schedule for the distribution licensees in Mumbai issued in
June 2009, the Commission has included IT ITES category under industrial
category. Hence, the Commission does not agree with MSEDCL’s proposal
in this regard and rules that IT ITES will be charged at industrial rates (HT

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and LT rates, as applicable), without getting into the details of whether mobile
towers and commercial broadcasting towers and all other similar activities are
covered under the Government of Maharashtra Policy on IT ITeS’.

“The Commission is of the view that the rationale and ruling of its earlier Order in
Case No.116 of 2008 should continue to apply. In other words, the Industrial tariff
will apply to Mobile Towers or other activities cited by MSEDCL only if they are
covered as IT/ITES and the provisions of GoM’s Policy apply to them.”
‘”Considering the above, Telecommunications Towers shall be covered under the
Commercial category, unless specifically included in the IT ITES Policy of the
Government of Maharashtra for coverage under the Industry category.'”

10.21 It is submitted that the Respondent Commission, in its ruling on
categorization of Telecommunication Towers, has only reiterated and re-
affirmed its earlier ruling in previous Tariff Order, i.e. that the benefit of
Industrial Tariff can be availed by Mobile Towers only if they are covered
by GoM’s IT and ITES Policy. The Respondent Commission had further
clarified that Telecommunication Towers if not specifically covered under
the IT and ITES Policy of GoM, would be categorized under the
Commercial tariff category.

10.22 The chronology of Orders summarized in the previous paragraphs
reveals the following facts.

(i) In 2004, considering the objectives and context of GoM’s IT and
ITES Policy, the Commission categorized all the activities covered
under GoM’s IT and ITES Policy in the Industrial category for the
purpose of electricity tariff. The Respondent Commission has
continued this approach consistently in its all subsequent Tariff
Orders.

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(ii) The Commission has never categorized ‘mobile towers’ as
‘Industrial’.The Commission has always held that all activities
covered by the IT/ITES Policy would be billed as ‘Industrial’.

(iii) The Commission has also made it clear that they were not going to
get into what was and what was not covered by IT/ITES policy.
The Respondent Commission has never ruled on which activity is
or is not covered by GoM’s Policy. It is left to the Distribution
Licensees to put each consumer into the industrial category by
applying the Commission defined criterion of coverage under the
GoM’s IT and ITES Policy for treating it in the Industrial Tariff
category or otherwise. This is in accordance with the Clause 13 of
the Maharashtra Supply Code,2005 which reads as under:
“13. Classification and Reclassification of Consumers into Tariff
Categories:

The Distribution Licensee may classify or reclassify a consumer into
various Commission approved tariff categories based on the purpose of
usage of supply by such consumer:

Provided that the Distribution Licensee shall not create any tariff category
other than those approved by the Commission.”

(iv) Whenever issues related to tariff categorization of
Telecommunication Towers were raised before this Respondent
Commission, the Commission has reiterated and reproduced the
rulings in its earlier Orders, stating that all the activities covered
under GoM’s IT and ITES Policy are categorized in the Industrial
tariff category, which means that Telecommunication Towers will
get the benefit of the Industrial tariff only if they are covered under
the IT and ITES Policy of GoM and would otherwise be covered
under the Commercial tariff category.

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(v) The impugned Order dated 3 November, 2016 is no different
inasmuch as, the Respondent Commission has only clarified its
old approach to tariff categorization of IT and ITES Industries and
Telecommunication Towers set out above.

(vi) It is therefore clear that the main contention of all the Appellants
that the Commission had hitherto classified “telecom towers” as
industrial is entirely incorrect. The Commission had only always
classified “all activities” falling within the IT and ITES Policy as
“industrial”.

10.23 It is submitted that the contentions made by the Appellant in its Appeal
are not tenable, and the impugned Order passed by the Respondent
Commission would not require interference by the Tribunal as the instant
Appeal is devoid of any merit and that, in view of the above, it ought to
be dismissed.

10.24 Vide their submissions made to this Tribunal as well as in the Written
Submissions the Appellants have raised the following contentions. Given
below are the main contentions of the Appellant and the response
thereto:

RE: The State Commission has consciously with full application of
mind and consistently categorized the Mobile Towers and
Broadcasting towers under the HT-I Industrial Category for the
purpose of retail supply tariff to be charged from the Appellants
under the Tariff orders issued by the Commission :

10.25 The contention that the Mobile Towers were classified under the
Industrial Category is wrong. The Respondent Commission has since

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2004, in all its Tariff Orders reiterated that all activities covered under
GoMs IT/ITES policy will get the benefit of the Industrial tariff category,
which means that Telecommunication Towers will get the benefit of the
Industrial tariff only if they are covered under the IT and ITES Policy of
GoM and would otherwise be covered under the Commercial tariff
category.

10.26 It is submitted that under the Supply Code, it was upto the MSEDCL to
decide which consumer falls in which tariff category based on the usage
of electricity. In case MSEDCL desires to modify the eligibility and
applicability of the IT/ITES Policy itself then it may approach the
appropriate forum for necessary relief.

10.27 In this regard, the reliance placed by the Appellants on the doctrine of
stare decisis is irrelevant and irrational. The Commission has
maintained its stance that Telecommunication Towers will get the benefit
of the Industrial tariff only if they are covered under the IT and ITES
Policy of GoM and would otherwise be covered under the Commercial
tariff category. Since there is no change in dispensation by the
Commission, the question of violating the principle of stare decisis
cannot and does not arise.

10.28 The reliance placed by the Appellants on the judgments of this Tribunal
in MIAL vs MERC (Appeal 295 of 2009 decided on 31.5.2011 and
Association of Hospitals vs MERC (Appeal 110 of 2009 decided
20.10.2011) on the principle that there has to be a rationale for
classification under Section 62(3) of the Electricity Act,2003 is entirely
incorrect as the above two cases are not relevant to the present matter.

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The categorization of IT/ITES industries under the Industrial Tariff
category has been done by the Commission on the basis of the GOMs
IT/ITES policy 2003.It was upto MSEDCL to verify the coverage of
activity under GOMs Policy before giving it the benefit of Industrial Tariff
or otherwise.

RE: Reliance on Telecom Policy, 2012 :

10.29 It is contended on behalf of the Appellants that the National Telecom
Policy, provides ‘infrastructure’ status to the Telecom Sector. It is
submitted that the contention of the Appellants is irrelevant and
immaterial for the consideration of the present matter. As per the
Objective Clause 6 National Telecom Policy, the Telecom sector has
been recognised as an infrastructure sector. The relevant extract from
the Telecom Policy,2012 is given below:

“Recognize telecom as Infrastructure Sector to realize true potential of ICT for

development”

From the above extracted clause it can be clearly seen that there no
mention of the Telecom Sector being “not commercial”. It is humbly
submitted that a mere mention of the term infrastructure would not
lead to the categorization of the telecom sector as Industrial.

10.30 Since 2004, considering the objectives and context of GoM’s IT and
ITES Policy, the Commission has categorized all the activities covered
under GoM’s IT and ITES Policy in the Industrial category for the
purpose of electricity tariff. The Respondent Commission has continued
this approach consistently in its all subsequent Tariff Orders.

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RE: Reliance on other Statues

10.31 It is contended on behalf of the Appellants that the telecom sector has
been recognized as having a infrastructure status; a public utility service
under Section 22A (b) of the Legal Services Authority Act; essential
service under Section 2 (a)(i) of the Essential Services Maintenance
Act,1968; and Section 2 (n) of the Industrial Disputes Act,1947.It is
submitted that the contention of the Appellants is also equally immaterial
and irrelevant for a consideration of the present matter.

10.32 It is submitted that this Tribunal in the judgment of BSNL vs PSERC
(Appeal No 116 of 2006) has held that :

“..It is possible that the appellant may fall under the category of ‘Industry’
on applying the meaning of the term ‘Industry’ as it is found it other
statutes but that cannot be the basis to determine whether an
appellant is to be charged tariff by treating it as an industry..”

Therefore reliance placed by the Appellants on status of telecom towers
under other statutes is immaterial for the present matter.

10.33 Additionally, it is also submitted that, in the Impugned Order the
Commission has defined “industrial purpose” and has held that the
categorization for the Industrial use is applicable wherein there is
“manufacturing and processing” involved. Therefore for the purposes of
the present matter, the question will not be whether telecom towers are
“industry” under other statues but whether “telecom towers” would
satisfy the definition of “industry” under the Impugned Tariff Order:-

“HT -I :HT-Industry

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HT-I (A): HT-Industry-General
Applicability:

This tariff category is applicable for electricity for Industrial use, at Low/Medium
Voltage, for purposes of manufacturing and processing, including electricity used
within such premises……”

Therefore, the present categorization cannot apply to the Telecom
towers and its ancillary industries as there is no manufacturing and
processing involved in telecom towers.

RE: Violation of Principles of Natural Justice :

10.34 It is contended on behalf of the Appellants that no notice had been
issued by the Commission before deciding the Case No. 48 of 2016 filed
by MSEDCL. It is submitted that the contention of the Appellants is
denied. A public notice and an Executive Summary was published by
MSEDCL inviting suggestions and objections on MSEDCL’s petition for
final true up for FY 2014-15,Provisional True Up for FY 2015-16 and
MYT for FY 2016-17 to FY 2019-20 in Case No. 48 of 2016.

10.35 Both these documents clearly mentioned that the copy of the detailed
petition (a voluminous document running into several hundred pages)
was available on the website of the Commission as well as MSEDCL’s
website. In its prayer to the Commission MSEDCL has mentioned “..to
provide tariffs for individual categories as proposed by
MSEDCL..”.MSEDCL had made a proposal to the Commission
regarding the classification of certain telecom towers, etc. under

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commercial category, irrespective of whether they were covered under
the IT/ITES Policy of the GoM.

10.36 It may also be mentioned that Bharti Airtel was also one of the objectors
before the Commission and is a party in the present matter also (in
Appeal 337 of 2016 ) and had categorically submitted as under:

“Bharti Airtel Ltd. stated that MSEDCL should charge Industrial Tariff for
consumption by Mobile Towers…..requiring an IT/ITES registration
certificate..”. Therefore, it is apparent that the status of telecom towers
for tariff determination was a part of the process of public scrutiny and
subjected to comments and suggestions in accordance with Section 64.

10.37 It is contended on behalf of the Appellants that there was no proposal on
behalf of MSEDCL regarding the recategorization of the Telecom
Towers. It is humbly submitted that there was, in fact, a proposal
submitted by MSEDCL to classify certain telecom towers etc. under
commercial category, irrespective of whether they were covered under
the IT/ITES policy of the GOM. It was observed by the Commission that
in this regard no rationale has been submitted by MSEDCL for this
specific proposal.

10.38 It is contended on behalf of the Appellants that there is a lack of
reasoning in the order regarding the recategorization of the Telecom
towers. It is humbly submitted that there was no recategorization of
telecom towers that was done by the Commission. Hence there can be
no question of not giving reasons since no re-categorisation was done at
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all. The Commission simply followed the rationale and ruling that was
followed of its earlier order in Case No. 116 of 2008,i.e. the Industrial
Tariff will be applicable to the Appellants only if they are covered as
IT/ITES and the provisions of the GOMs policy apply to them.

A. RE: Parameters under Section 62(3) of the Electricity Act,2003,
violation of Section 62(3) of the Electricity Act,2003 :

10.39 It is submitted that the Section 62(3) of the EA 2003 provides that the
tariff for electricity is to be fixed by the Appropriate State Commission on
the basis of various factors including the purpose for which the supply is
required. In this regard reliance is placed upon the judgment of this
Tribunal in BSNL vs PSERC (Appeal 116 of 2006) where it was held that
it is for the State Commission to decide which category a consumer
should fall under. The EA,2003 does not define “Industry”. In the case of
BSNL vs. UOI (2006 3 SCC 1) the Hon’ble Supreme Court held that the
nature of transaction by which mobile phone connection is made
available to the consumers, namely, whether it is carrying out
manufacture of goods/supply of goods (and is an industry).The Apex
Court held that it was simply rendering a service.

10.40 Mobile Towers are devices which are used for transmitting
telecommunication signals, and there is no manufacturing or industrial
activity.

10.41 The Appellants are not carrying out the process of manufacturing/supply
of goods, they are simply rendering service to the customer. In this
regard reliance may be placed upon the Judgment of the Hon’ble
Supreme Court in the case of BSNL vs. Union of India and Ors. The
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principal question to be decided was the nature of the transaction by
which mobile phone connection is made available by the telecom
company to the consumers, namely, is it sale or is it a service or is it
both. Following the aforesaid matter this Tribunal in Appeal 116 of 2006
dated 4.10.2007 held that:

“In view of the above mentioned decision of the Supreme Court, we
cannot accept the argument that the appellant (BSNL) is an industry.”

10.42 In Appeal 88 of 2012(Tata Teleservices vs RERC) this Tribunal dated
20.5.2013 held that:

“43.IT Policy and other policies issued by the State Government and classification
made by the State Government for providing incentives under various programmes
etc., do not have any role in tariff determination process. It cannot be denied that the
jurisdiction for change of categorization is of the State Commission and not of the
State Government. That apart, for the purpose of tariff determination by the
State Commission, telecom services does not fall under the category of IT
industry…”

10.43 Additionally, it is also submitted that, in the Impugned Order the
Commission has held that the categorization for the Industrial use is
applicable wherein there is “manufacturing and processing” involved.
However, the present categorization cannot apply to the Telecomtowers
and its ancillary industries as there is no manufacturing andprocessing
involved:

“HT -I :HT-Industry
HT-I (A): HT-Industry-General
Applicability:

This tariff category is applicable for electricity for Industrial use, at
Low/Medium Voltage, for purposes of manufacturing and processing,
including electricity used within such premises……”

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RE: In Re:Categorization of mobile towers as industrial category :

10.44 It is submitted that the Respondent Commission since 2004 has
reiterated and reproduced its rulings in its earlier orders as well that all
activities covered under the GOMs IT/ITES Policy which means that
Telecommunication Towers will get the benefit of the Industrial tariff only
if they are covered under the IT and ITES Policy of GoM and would
otherwise be covered under the Commercial tariff category.

10.45 In this regard as already stated above reliance may be placed on the
decisions of this Tribunal in BSNL vs PSERC as well as Tata
Teleservices vs RERC and others where it has been held that business
of telecommunication services cannot be categorized as an Industry.

10.46 In point of fact in the Tata Telecommunications Vs RERC Judgment this
Tribunal was pleased to hold further that even though Telecom Towers
could be covered under the Rajasthan Governments IT and ITES Policy,
telecom towers would still be treated as “commercial” and not
“industrial”.

RE: Conditions of coverage under IT/ITES was not there in previous
orders :

10.47 It is submitted that whenever issues related to tariff categorization of
Telecommunication Towers were raised before this Respondent
Commission, the Commission has reiterated and reproduced the rulings
in its earlier Orders, stating that all the activities covered under GoM’s IT
and ITES Policy would be categorized in the Industrial tariff category,
which means that Telecommunication Towers will get the benefit of the
Industrial tariff only if they are covered under the IT and ITES Policy of

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GoM and would otherwise be covered under the Commercial tariff
category.

10.48 The Respondent Commission has never ruled on which activity is or is
not covered by GoM’s Policy. It is left to the Distribution Licensees to
classify consumers within Commission approved categories and
obviously the Discom could do so only if telecom towers were so
covered under GoM’s IT and ITES Policy.

RE: Definition of IT/ITES Incorporation by reference in the tariff order of
2004

10.49 It is submitted that the contention of the Appellants regarding the
Definition of IT/ITES being Incorporated by reference in the tariff order
as well as the judgments relied upon by them are wrong. The
Respondent Commission has never ruled on which activity is covered by
the GoMs IT/ITES Policy. In that sense the Commission has never
legislated in (whether reference or by incorporation) using the definition
of IT/ITES services. It has been reiterated by the Respondent
Commission in the Impugned Order as well as the previous orders
passed by the Respondent Commission that Telecommunication towers
would will get the benefit of the Industrial tariff only if they are covered
under the IT and ITES Policy of GoM (without getting into the details of
what is or is not covered by the policy) else they would otherwise be
covered under the Commercial tariff category. In other words, if the
Appellants are covered by the IT/ITES policy of the GoM,2003, then they
will get the benefit of Industrial Tariff.

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10.50 Secondly, it is submitted that, each tariff year in itself is a different unit
and what may the dispensation in one year may not remain the same in
another year. Therefore, the contention of incorporation by reference
doesn’t arise.This is especially so when the Commission has not gone
into the question of the coverage of the IT ITES Policy.

10.51 In terms of Clause 13 of the Maharashtra Supply Code,2005,itis the
obligation of the Distribution Licensees to verify whether a particular
consumer, in this case, each telecom tower is covered by the GoM’s IT
and ITES Policy for categorizing it in the Industrial Tariff category or not.

For all the aforesaid reasons it is prayed that the above appeals may be
dismissed.

11. We have heard learned counsel appearing for the Appellants,
learned counsel for the Respondent Commission and learned
counsel for the Respondents at considerable length of time and we
have gone through carefully their written submissions/arguments
and also taken note of the relevant material available on records
during the proceedings. On the basis of the pleadings and
submissions available, the following principal issues emerge in
the batch of Appeals for our consideration:-

Issue No.1: Whether the State Commission is justified in changing the
categorization of the mobile towers from industrial category
to commercial category for towers not falling within Govt. of
Maharashtra policy on IT ITES?

Issue No.2: Whether the impugned order has been passed by State
Commission in accordance with law provided under

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Electricity Act, 2003 and other policies of Govt. of India?
Issue No.3: Whether in the facts and circumstances of the case, the
impugned order passed by the State Commission is violative
of the principle of natural justice?

OUR CONSIDERATION FINDINGS:-

12. Issue No.1:-

12.1 Learned counsel for the Appellants submitted that the State Commission
abruptly, vide the impugned order, has inter-alia re-classified the
agencies using power for mobile tele-communication towers etc..
under commercial category who were being charged under industrial
category since 2004 unless the same are specifically included in the IT
ITES Policy of the Govt. of Maharashtra for coverage under the
industrial category. Learned counsel for the Appellants vehemently
submitted that after the year 2004 order which was passed on the basis
of Govt. of Maharashtra, 2003 IT/ITES policy, the State Commission
has come out with subsequent tariff orders dated 17.08.2009 in Case
No. 116 of 2008 relating to the year 2009-10, order dated 12.10.2010,
tariff order dated 16.09.2012, order dated 26.06.2015 in regard MYT
2013-14 to 2015-16 holding that the mobile/tele-communication towers
would be charged industrial tariff. Learned counsel was quick to point
out that the said change in the classification considered by the State
Commission in the impugned order has resulted into tariff shock to
mobile/telecommunication operators.

12.2 Advancing their arguments, learned counsel for the Appellants further
submitted that in all these orders, the State Commission has constantly
rejected the MSEDCL’s proposals for inclusion of mobile/tele-

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communication towers under the commercial category. For ready
reference, the conclusion part of various orders are reproduced
hereunder:-

a) Tariff Order dated 17/08/2009 in Case No. 116 of 2008

Hence, the Commission does not agree with MSEDCL’s proposal
in this regard and rules that IT ITeS will be charged at industrial
rates (HT and LT rates, as applicable), without getting into the
details of whether mobile towers and commercial broadcasting
towers and all other similar activities are covered under the
Government of Maharashtra Policy on IT ITeS.”

(emphasis supplied)

b) Order dated 12/10/2010 in which the State Commission
reiterated its views in tariff order dated 07/08/2009
In view of the above, the Commission rules that IT ITeS will be
charged at industrial rates (HT and LT rates, as applicable),
without getting into the details of whether mobile towers and
commercial broadcasting towers and all other similar activities
are covered under the Government of Maharashtra Policy on IT
ITeS.”

(emphasis supplied)

c) Tariff Order dated 16/09/2012, the State Commission
categorised the Mobile Towers under HT-II Commercial
Category instead of HT-I Industrial Category. This Order
was challenged before this Tribunal. By order dated
7.11.2012 passed in Appeal Nos 234, 235 etc. of 2012, the
Order of the State Commission was set aside with the
following decision:

10. As indicated by the Learned Counsel for the Appellants, Mobile
Towers, etc., prior to passing of the impugned order were categorized
under the Industrial category and in fact the State Commission in the

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tariff order for the FY 2009-10, rejected the specific proposal of the
distribution licensee for change in category from Industrial to
Commercial.

11. Despite this, the impugned order dated 16.8.2012 has been
passed by the State Commission changing the consumer category of
the Appellants into Commercial without any discussion or reasonings
and without hearing the Appellants. Thus, we notice that the principles
of natural justice have been violated in the present case.

12. We, therefore, deem it fit to set aside the portion of impugned order
dated 16.8.2012 regarding re-categorisation of Mobile Towers, Micro
Wave Towers, Satellite Antennas used for communication activity to
HT/LT Commercial Category from HT/LT Industrial Category prevailing
prior to the date of the impugned order. Accordingly the same is set
aside.

13. However, the distribution licensee (R-2) is given liberty to file a
fresh petition containing the proposal regarding re-categorisation of the
Appellants in appropriate tariff category before the State Commission
which in turn shall consider the same and pass the appropriate orders
in accordance with law after hearing all the concerned parties.

d) Subsequent to the above decision dated 07.11.2012 of this
Tribunal, the distribution licensee issued a circular dated
15.12.2012 placing the Mobile Towers under the Industrial
Category; Further, there was no proposal of the distribution
licensee for change in categorisation from Industrial to
commercial.

e) Order dated 26.6.2015 was passed by the State
Commission in regard to MYT 2013-14 to 2015-16, inter alia,
holding as under:

“The Commission is of the view that the rationale and ruling of its
earlier Order in Case No. 116 of 2008 should continue to apply. In
other words, the Industrial tariff will apply to Mobile Towers or
other activities cited by MSEDCL only if they are covered as IT/
ITES and the provisions of GoM’s Policy apply to them”.

(Emphasis Supplied)

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12.3 Learned counsel for the Appellants contended that in utter contradiction
to its own previous orders, the State Commission vide its impugned
order dated 3.11.2016 reclassifies mobile/telecom towers from
Industrial tariff category to Commercial tariff category, and that too
without assigning reasons and without providing an opportunity of
hearing to the Appellants.

(a) In the impugned tariff order dated 3.11.2016, MERC has held as
follows :

“…Considering the above, Telecommunication Towers shall be covered
under the Commercial category, unless specifically included in the IT ITeS
Policy of the Government of Maharashtra for coverage under the Industry
category.”

Consequently, the mobile/telecommunication towers are to be re
categorized into Commercial Tariff Category (from the existing
‘Industrial Tariff Category’) unless the same are specifically
included in the applicable IT ITES Policy of Maharashtra.

12.4 Learned counsel further submitted that till the passing of the impugned
order, the distribution lincensee had duly understood and implemented
the tariff orders as categorizing mobile and broadcasting towers under
the industrial category without any doubt whatsoever on the
interpretation and application of the tariff orders. Therefore, it is not
open to the licensee or the State Commission to now change the
category of the mobile/broadcasting towers as far as tariff structure
under industrial category is concerned. Learned counsel relied on the
judgment of Hon’ble Supreme Court in the case of Indian Metals and
Ferro Alloys v. Collector of Central Excise, 1991 Supp (1) SCC 125. To
fortify its contentions that the State Commission ought not to have re-

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classified the said category of mobile/tele-communication towers. The
relevant portion of the judgment is reproduced below:-

“14. However, even assuming that there could have been some doubt as
to the intention of the legislation in this regard, the matter is placed
beyond all doubt by the revenue’s own consistent interpretation of the
item over the years. It has been pointed out that prior to March 1, 1975,
residuary Item 68 was not in the schedule. If the revenue’s contention that
these poles are not pipes and tubes is correct then they could not have been
brought to duty at all before March 1, 1975. But the fact is that transmission
poles have been brought to duty between 1962 to 1975, and that could only
have been under Item 26-AA (for there was no residuary item then). This is
indeed proved by the fact that this very assessee was thus assessed initially
and also by the issue of notifications of exemption from time to time which
proceed on the footing that these poles were assessable to duty under Item
26-AA but were entitled to an exemption if certain conditions were fulfilled.
Indeed, the assessee also applied for and obtained relief under one of those
exemption notifications since 1964.

15. It is contended on behalf of the department that this earlier view of the
department may be wrong and that it is open to the department to contend
now that the poles really do not fall under Item 26-AA. In any event, it was
submitted since the poles were exempted from duty under one notification or
other, it was not very material prior to March 1, 1975 to specifically clarify
whether the poles would fall under Item 26-AA or not. This argument
proceeds on a misapprehension. The revenue is not being precluded
from putting forward the present contention on grounds of estoppel.
The practice of the department in assessing the poles to duty (except in
cases where they were exempt as the condition in the exemption
notifications were fulfilled) and the issue of notifications from time to
time (the first of which was almost contemporaneous with the insertion
of Item 26-AA) are being relied upon on the doctrine
of contemporaneoexpositio to remove any possible ambiguity in the
understanding of the language of the relevant statutory instrument:
see K.P. Varghese v. TTO [(1981) 4 SCC 173 : 1981 SCC (Tax) 293 : (1982)
1 SCR 629] , State of Tamil Nadu v. Mahi Traders[(1989) 1 SCC 724 : 1989
SCC (Tax) 190 : (1989) 1 SCR 445] , CCE v. Andhra Sugar Ltd.[1989 Supp
(1) SCC 144 : 1989 SCC (Tax) 162] and Collector of Central Excise v. Parle
Exports P. Ltd. [(1989) 1 SCC 345 : 1989 SCC (Tax) 84] Applying the
principle of these decisions, that a contemporaneous exposition by the
administrative authorities is a very useful and relevant guide to the
interpretation of the expressions used in a statutory instrument, we think the
assessee’s contention that its products fall within the purview of Item 26-AA
should be upheld.”

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12.5 It would thus appear that the State Commission has consciously with
full application of mind had consistently categorised the Mobile /
Broadcasting Towers under HT-I Industrial Category for the purpose of
retail supply tariff to be charged from the Appellants under the Tariff
Orders issued by the State Commission from time to time. It is relevant
to add that the classification under the Electricity Act is not governed
by the classification adopted by the State Government under the
IT/ITES Policy which was brought out by the State for providing
incentives to specific industries. In a host of judgments, Hon’ble
Supreme Court has held that a long standing view taken by an authority
ordinarily be adhered to and not disturbed so as to maintain consistency
and to avoid uncertainty. Among them, these judgments are relevant
Shankar Raju v Union of India, (2011) 2 SCC 132 9(Para 10 to 17);
Rajarai Pandey v Sant Prasad Tiwari, (1973) 2 SCC 35 ((Para 10);
Mishrilal v Virendranath (1999) 4 SCC 11(Para 16); Union of India v
Azadi BachaoAndolan (2004) 10 SCC 1, para 33and 34; (b) State of
Gujarat v Mirzapur Moti Kuresh(2005) 8 SCC 534 Para 111; and
Maganlal Chaganlal v Municipal Corporation of Greater Bombay
(1974) 2 SCC 402(Para 22). Learned counsel accordingly summarised
that in terms of the above, when the State Commission has since the
year 2008 taken a conscious and consistent view that the
Mobile/Broadcasting Towers would be placed under the Industrial
category without going into details whether they fall under the
Government of Maharashtra Policy or not, the said position held good
for a very long time for more than 10 years and there is no change

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whatsoever in the factual or legal position, the above principle of law
applies squarely.

12.6 Interestingly, the contention of the State Commission and MSEDCL in
the present appeal are contradictory. It is the contention of the State
Commission that there has been no change in the position since the
year 2008 and it is MSEDCL which has erred in levy of industrial tariff
over these years. This contention is also erroneous for the following
reasons:

(a) The clear wordings of the Orders since 2008 is that telecom towers are
under industrial category, irrespective of whether they are covered by
the Government of Maharashtra Policy;

(b) In the year 2012, when the category was sought to be changed to
commercial, the position stated before the Tribunal was that the telecom
towers were industrial earlier. There was no contention that only the
towers registered under the Government of Maharashtra Policy would
be industrial.

(c) MSEDCL has specifically proposed classification to commercial
category earlier, which was rejected.

12.7 Per contra, learned counsel appearing for the Respondent Commission
submitted that the principal argument of the Appellants is that the
Commission has in the impugned order taken a complete U-turn and
treated telecom towers as “commercial” when they were hitherto being
treated as “industrial”. Learned counsel pointed out that the aforesaid
argument is entirely incorrect inter alia on account of the following:-

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I. In all its previous orders including in the current Impugned
Order the Commission had not classified “Telecom Towers” as
“Industrial”.

II. The dispensation always considered by the Commission from
2007 till the current Impugned Order is that an activity which
is covered by the IT and ITES policy of the Government of
Maharashtra would be charged an Industrial Tariff.
III. The Commission had never given a finding as to whether the
“Telecom Towers” were in fact covered by the IT and ITES
policy or not. In fact, the Commission holds, that it has not gone
into the issue as to what activities are covered by the IT and
ITES policy or not.

IV. If the Telecom Towers were covered by the IT and ITES policy,
they would be charged Industrial Tariff and all that they had to
do was to show the distribution licensee that they were covered
by the IT and ITES policy of the Government of Maharashtra .
V. The very same dispensation which was brought in year on year
was continued from 2004 till the Impugned Order as well and
the Commission has not made any change at all.

Learned counsel vehemently brought out the contents of the various
orders of the State Commission to emphasize that the Commission did
not hold that “telecom towers” would be categorised as “industrial” and
instead, held that all activities covered under the IT and ITES policy
would be treated as industrial. The Commission also clearly held that the
above dispensation was “…without getting into the details of whether

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mobile towers ….. and all other similar activities are covered under
the Government of Maharashtra Policy on IT ITES…”

12.8 Referring to MERC Order dated 16 August, 2012 in Case No.19 of 2012
and APTEL Judgment dated 7 November, 2012 in Appeal No.234 of
2011 batch, learned counsel for the State Commission clarified that the
MSEDCL in its Tariff Petition in Case No.19 of 2012, had proposed to
categorize Mobile Towers under Commercial category and there was no
objection to this proposal during the public consultation process. In view
of this, Commission in its order categorized Mobile Towers under
Commercial category which was set aside by this Tribunal vide its
judgment dated 7 November, 2012. It is important to note that in the
above judgment, this Tribunal had set aside the Commission’s order
only on account of denial of principal of natural justice and in point of
fact there was no detailed finding on this issue by the Tribunal which
categorically stated that it had not given any opinion on the merits of the
matter.

12.9 Learned counsel emphasised that while continuing the practice of
categorizing activities under Government of Maharashtra’s IT and ITES
Policy in the Industrial category vide its various Orders the Respondent
Commission reiterated that the benefit of Industrial Tariff can be availed
by Mobile Towers only if they are covered by Government of
Maharashtra’s Policy. It is pertinent to note that the above ruling of the
Respondent Commission has not been challenged before this Tribunal
and hence has, attained finality. In fact, the impugned Order dated
03.11.2016 is nothing more than to repeat and reiterate the said 2015

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Order. Accordingly, learned counsel was quick to point out that the
contentions made by the Appellants in the batch of appeals are non-
tenable and the impugned order passed by the State Commission does
not require interference by this Tribunal as the instant appeals are
devoid of any merit and accordingly ought to be dismissed. Regarding
consistent order by the State Commission considering mobile/telecom
towards under industrial category tariff, learned counsel clarified that
since 2004, in all its Tariff Orders, the State Commission reiterated that
all activities covered under Government of Maharashtra IT/ITES policy
will get the benefit of the Industrial tariff category, which means that
Telecommunication Towers will get the benefit of the Industrial tariff only
if they are covered under the IT and ITES Policy of GoM and would
otherwise be covered under the Commercial tariff category.

12.10 Further, under the Supply Code, it was upto the MSEDCL to decide
which consumer falls in which tariff category based on the usage of
electricity. In case MSEDCL desires to modify the eligibility and
applicability of the IT/ITES Policy itself then it may approach the
appropriate forum for necessary relief. Learned counsel further
contended that reliance placed by the Appellants on the doctrine of
stare decisis is irrelevant and irrational. Similarly, the judgments of this
Tribunal in MIAL vs MERC (Appeal 295 of 2009 decided on 31.5.2011
and Association of Hospitals vs. MERC (Appeal 110 of 2009 decided on
20.10.2011) on the principle that there has to be a rationale for
classification under Section 62(3) of the Electricity Act, 2003 is entirely
incorrect as the above two cases are not relevant to the present matter.

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Further, reliance of the Appellants on other judgments is also not
relevant in the facts and circumstances of the present case.

12.11 Additionally, learned counsel also submitted that in the impugned order,
the Commission had defined “industrial purpose” and has held that the
categorization for the Industrial use is applicable wherein there is
“manufacturing and processing” involved. Therefore, for the purposes of
the present matter, the question will not be whether telecom towers are
“industry” under other statues but whether “telecom towers” would
satisfy the definition of “industry” under the Impugned Tariff Order. It is
contended on behalf of the Appellants that there is a lack of reasoning in
the impugned order regarding the recategorization of the Telecom
Towers by the Commission. The Commission has simply followed the
rationale and ruling that was followed of in its earlier order in Case No.
116 of 2008, i.e. the Industrial Tariff will be applicable to the Appellants
only if they are covered as IT/ITES and the provisions of the GOMs
policy. Hence, there could be no question of not giving reasons by the
Commission. Learned counsel reiterated that accordingly the
contentions of the Appellant that definition of IT/ITES was incorporated
by the Commission in the Tariff order of 2004 and other judgments relied
upon by them are wrong. In fact, the Respondent Commission has
never ruled on which activity is or is not covered by GoM’s Policy and
has in various orders ruled that if the Appellants are covered by the
IT/ITES policy of GOM, 2003 then they will get the benefit of the
Industrial tariff . Moreover, each tariff year in itself is a different unit and
what may the dispensation in one year may not remain the same in
another year. This is especially so when the Commission has not gone

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into the question of the coverage of the IT ITES Policy. Moreover, in
terms of Clause 13 of the Maharashtra Supply Code,2005, it is the
obligation of the Distribution Licensees to verify whether a particular
consumer, in this case, each telecom tower is covered by the GoM’s IT
and ITES Policy for categorizing it in the Industrial Tariff category or not.
Summing up his arguments, learned counsel for the Respondent
Commission reiterated that there is no perversity in the impugned order
and as such all the appeals need to be dismissed.

Our Findings:-

12.12 We have carefully considered the submissions of learned counsel for the
Appellants and learned counsel for the Respondent Commission and
also taken note of the various judgments of the apex court as well as
this Tribunal relied upon by the parties. It is the contention of the
Appellants that till the impugned order dated 03.11.2016, the State
Commission has come out with several orders such as dated
17.08.2009, dated 12.10.2010, dated 16.09.2012, dated 26.06.2015 etc.
and has constantly placed the mobile / tele-communication towers under
the industrial tariff category. Further, the past proposal of MSEDCL for
proposing the mobile/tele-communication tower under commercial
category has been categorically rejected by the State Commission
clearly indicating that there is no change of ground, rational or position
since the year 2008. Learned counsel for the Appellants contended that
in utter contravention of its own previous orders the State Commission
vide its impugned order dated 03.11.2016 has reclassified mobile/tele-
communication towers from industrial tariff category to commercial tariff

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category and that too without assigning proper reasons and also without
providing an opportunity of hearing to the Appellants. The relevant
portion of the impugned order reads thus:-

“…Considering the above, Telecommunication Towers shall be covered
under the Commercial category, unless specifically included in the IT ITeS
Policy of the Government of Maharashtra for coverage under the Industry
category.”

In other words, the mobile / tele-communication tower are to be
considered now under commercial tariff category instead of the existing
industrial tariff category unless they are covered as IT/ITES under the
Policy of the Govt. of Maharashtra.

12.13 Learned counsel for the Appellants placed reliance on the judgment of
Hon’ble Supreme Court in case of Indian Metal and Ferro Alloys under
the Collector of Central Excise to contend that it is not open to the
licensee or the State Commission to now change the tariff category of
mobile / broadcasting towers in utter contravention of the conscious
decisions of the State Commission having consistently categorised the
mobile/broadcasting towers under industrial category for the purpose of
retail supply tariff. Moreover, it is relevant to note that the classification
under the Electricity Act is not governed by the classification adopted by
the State Govt. for providing incentives to specific industry. Learned
counsel for the Appellants placed reliance on a host of judgments of the
Apex Court which has held that a long standing view taken by an
authority ordinarily be adhered to and not disturbed so as to maintain
consistency and to avoid uncertainty.

12.14 Learned counsel for the Appellants have accordingly highlighted that in
terms of the various judgments of the Supreme Court when the State

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Commission since long taken a consistent view that mobile/broadcasting
towers would be placed under the industrial whether they fall under the
Govt. policy of IT/ITES or not, the said position has been held well forth
for quite a long time more than 10-12 years and admittedly, there has
been no change whatsoever in the factual or legal position, as such the
principle of law laid down by the Hon’ble Supreme Court applies
squarely in the present case.

12.15 On the other hand, learned counsel for the Respondent Commission
contended that the principal argument of the Appellants is that the State
Commission has in the impugned order taken a complete U-turn and
treated mobile/telecom towers under commercial category when they
were hitherto being treated under the industrial category. Learned
counsel clarified that in all its previous orders including the current
impugned order, the Commission has never classified mobile / telecom
towers as industrial and instead, it held that a activity which is covered
by the IT/ITES policy would be charged an industrial tariff. In fact, the
State Commission has not gone into the issues as to what activities are
covered by the IT/ITES policy of the Govt. Learned counsel reiterated
that if the telecom towers were covered by the IT/ITES policy, they
would be charged industrial tariff and all that they have to do is to show
the very same dispensation which was brought in the year on year was
continued from 2004 till the impugned order as well and the Commission
has not made any change at all. Referring to the judgment dated
07.11.2012 of this Tribunal, learned counsel for the Respondent
Commission submitted that in the above judgment, this Tribunal had set
aside Commission’s order only on account of denial of principle of

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natural justice and the Tribunal had not given any opinion on the merits
of the matter. Further, learned counsel emphasised that while
continuing the practice of categorising activities under the Government’s
IT/ITES policy in the industrial category vide its various orders, the
Commission has reiterated that the benefit of industrial category vide its
various orders, can be availed by mobile towers only if they are covered
by the Govt. of Maharashtra policy.

12.16 It is pertinent to note that the above ruling of the Respondent
Commission has not been challenged before this Tribunal and hence
has attained finality. In fact, the impugned order dated 03.11.2016 is
nothing more than repeated and reiterated the said order of 2015 .
Learned counsel for the Respondent Commission further contended that
the Commission has not gone into the question of coverage of IT/ITES
policy and in terms of Clause 13 of Maharashtra Supply Code, 2005, it is
the obligation of the distribution licensee to verify whether a particular
consumer is covered by Government of Maharashtra’s IT/ITES policy
for categorising in the Industrial Tariff Category or not.

12.17 After critical analysis of the rival contentions of the Appellants and the
Respondents Commission, it is relevant to note that after a continuation
of more than 10-12 years of considering mobile/telecom powers under
Industrial Tariff Category, the State Commission has abruptly changed
the said category under the commercial category unless otherwise these
towers are established to be under the IT/ITES policy of the Govt. of
Maharashtra. The question, thus emerges that under what changed
scenario, the State Commission has changed the tariff category of

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mobile/tariff towers from industrial to commercial unless they prove that
their towers are specifically included in the IT/ITES policy. We note that
till the passing of the impugned order, MSEDCL had duly understood
and implemented the tariff orders without any doubt whatsoever on the
interpretation and application of the tariff orders and hence it is not now
open to the licensee or the State Commission to change the category of
mobile / telecom towers as far as tariff structure under industrial
category is concerned. It is also relevant to notice that the State
Commission has contended that there has been no change in the
position since the year 2008 and it is MSEDCL which has erred in levy
of industrial tariff over these years. These contentions are contrary to
each other and also erroneous in consideration of the facts and
circumstances prevailing since announcement of the GOM IT/ITES
Policy, 2003 and various orders of the State Commission. It is pertinent
to note that in the intervening period, MSEDCL made efforts to reclassify
the ;mobile/telecom towers in the commercial category but the same
was categorically rejected by the State Commission stating that there
has been no change in the legal / physical position in the matter. The
Appellants, herein who are operators of the mobile/broadcasting towers
have enjoyed the status of industrial tariff category since last 10-12
years and obviously pre-judiced of financial loss without any established
reasons and grounds necessitating such change in classification of the
telecom towers.

12.18 In view of the facts and submissions placed before us during the
proceedings, we opine that the classification under the Electricity Act is
not governed by the classification adopted by the State Govt. under any

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policy brought out by the State Govt. for providing incentives to specific
industry. It would thus appear that the State Commission has
consciously with full application of mind categorised the
mobile/broadcasting towers under HT-I industrial category for the
purpose of retail supply tariff to be charged from the Appellants herein
under the tariff orders issued by it from time to time. We have perused
the rulings under the various judgments of the Apex Court and note that
in a host of judgments, Hon’ble Supreme Court has held that a long
standing view taken by an authority ordinarily be adhered to and not
disturbed so as to maintain consistency and to avoid uncertainty. In
terms of the above, the State Commission has since the year 2008
taken a consistent view to put mobile / telecom towers under industrial
category without going into the details where they fall under the GOM
policy or not. Besides, the said position has been held for quite a long
time and also there is no change whatsoever in the factual or legal
position, the above principles of law settled by the Apex Court applies
squarely in the instant case in hand.

12.19 In view of the above, we are of the considered opinion that the
impugned order passed by the State Commission dated 03.11.2016 is
not justified in the eyes of law settled by various courts as far as the
change of tariff category of mobile towers from industrial category to
commercial category is concerned.

13. Issue No.2:-

13.1 Learned counsel for the Appellants submitted that the broad
classification of electricity consumers is provided under Section 62(3) of
the Electricity Act. This is unlike Section 49 of the Electricity (Supply)

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Act, 1948 which provided for a residuary criteria of classification on
factors as deemed fit by the State Commission but the classification can
only be based on the specified criteria. Therefore, the criteria laid in the
impugned order that the telecom towers registered under the State
Government policy would be classified as Industry and other telecom
towers would be classified as commercial is contrary to Section 62(3) of
the Electricity Act and hence bad in law. Learned counsel relied upon
the judgment of this Tribunal dated 31.5.2009 in Appeal No. 195 of 2009
(Mumbai International Airport Pvt Limited v MERC) which set aside the
categorisation of Mumbai Airport under HT – II Commercial Category
considering the nature of service rendered by the Airport . Similarly,
hospitals have been held to be not falling under HT Commercial
Category (Association of Hospitals v MERC Appeal No. 110/2009
decided on 20.10.2011). Learned counsel was quick to point out that
the reliance placed by the Respondents on the decision in the case of
BSNL Ltd is misconceived as the issue that was there raised was
whether telecom activity amounts to “manufacture” or “service”, which
was decided to be “not manufacture” . However, the issue whether it
would be Industry or not is not dependent upon whether the activity
amounts to manufacture. In fact, in the impugned order, the State
Commission has categorised many activities such as cold storages,
LPG/CNG bottling plants etc. to be industrial, which are clearly not
manufacturing activities.

13.2 Learned counsel for the Appellants vehemently submitted that the
State Commission has itself recognised that the telecom sector amounts
to industrial activity. It is not that all Mobile/Broadcasting Towers are

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categorised as commercial. The only criteria for the differentiation by the
State Commission is the registration under the IT/ITES Policy of the
Government of Maharashtra. Such pre-requisite condition is
misconceived for the purposes of electricity classification due to the fact
that the purpose for use of the electricity, which is not affected by
registration process as the nature of the activity, whether registered
under the Government of Maharashtra Policy or not continues to be the
same. In the instant case, the Appellants are registered under the
IT/ITES Policy. Sample certificates have been produced with the
rejoinder of the Appellants. What the distribution licensee is now
insisting is a separate certificate for each of the thousand odd towers of
the Appellants and in the absence of such certificate for each tower, the
classification would be on commercial basis.

13.3 Learned counsel for the Appellants further contended that while
referring to the definitions given in the IT/ITES Policy of 2003 of Govt. of
Maharashtra, it is clear that the installation of Mobile Tower which is
part of the cellular notice telecommunication network of the Appellants
and subject matter of the present appeals come under the definition of
IT/ITES units as defined by the IT ITES Policy of the Government of
Maharashtra. Further, the fact that the mobile tower and related
installation of Appellants were treated and covered in the definition of
IT/ITES under the various policies of the State of Maharashtra will also
be evident from the Registration Certificate issued by Govt. of
Maharashtra for the said installations of the Appellants right since the
year 2004. The Appellants also relied on the following judgments in

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support of their contentions that the tele-communications services are
part /subset of information technologies and hence as industrial units:-

– Anthony Philip Witek Vs. Commissioner of Income tax. ‘Income
Tax Appellate Tribunal] 2008 110ITD 148 Delhi (2008) 113 TTJ
Delhi 740

– Amir ZaiSangin [Authority for Advance Ruling]
MANU/AR/0002/1997

– Syed Asifuddin and ORs. Vs. The State of Andhra Pradesh and
Anr. [High Court of Andhra Pradesh] Cri Petn. Nos 2601 and 2602
of 2003.

13.4 Learned counsel for the Appellants also made reference to the
Circular dated 26.06.2009 of MSEDCL by which it tried to withdraw all
the earlier letters pertaining to applicability of industrial tariff to mobile
towers being covered under the IT and IT Enabled Services. The said
circular was stayed by the Order dated 17.08.2009 of Hon’ble Bombay
High Court and the status of mobile tower for levy of industrial tariff was
restored. A reference has also been made to the APRP Tariff Petition
of MSEDCL filed before the State Commission for FY 2008-09 and also
letter dated 17.08.2009, whereby it was proposed to exclude the mobile
towers from the category of IT and ITES and to convert/classify it in
commercial category. However, the State Commission has
consciously included IT and ITES under industrial category in the tariff
orders for the erstwhile MSEB in 2004. Since then, these services
categorically continued to be charged under industrial tariff.

13.5 In view of the above, the State Commission has failed to properly
exercise the discretion vested under section 62(3) of the Act which is
not only violative of the said section but also violative of Article 14 of the
Constitution. As a matter of fact, the Appellants are in other words being

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treated equal with malls, restaurants, and other commercial
establishments which is nothing but treating unequals as equals.
Summing up their arguments, learned counsel for the Appellants
reiterated that in view of the above facts, the State Commission has
passed the impugned order in utter contravention of the provisions
under the Electricity Act as well as various policies/guidelines of the
Central / State Govts..

13.6 Per contra, learned counsel for the Respondent Commission contended
that Section 62(3) of the Act provides that the tariff for electricity is to be
fixed by the appropriate State Commission on the basis of various
factors including the purpose for which the supply is required. In this
regard, learned counsel placed reliance upon the judgment of this
Tribunal in BSNL vs PSERC (Appeal No. 116 of 2006) where it was held
that it is for the State Commission to decide which category a consumer
should fall under. The EA,2003 does not define “Industry”. In the case of
BSNL vs. UOI (2006 3 SCC 1) the Hon’ble Supreme Court held that the
nature of transaction by which mobile phone connection is made
available to the consumers, namely, whether it is carrying out
manufacture of goods/supply of goods. Precisely, the Apex Court held
that mobile towers or devices are used for transmitting
telecommunication signals, and there is no manufacturing or industrial
activity”.

13.7 Learned counsel further contended that following the aforesaid
judgment, this Tribunal in Appeal No. 116 of 2006 dated 4.10.2007 held
that:

“In view of the above mentioned decision of the Supreme Court, we
cannot accept the argument that the appellant (BSNL) is an industry.”

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Further, in Appeal 88 of 2012(Tata Teleservices vs RERC) this Tribunal
in its judgment dated 20.5.2013 held that:

“43.IT Policy and other policies issued by the State Government and classification
made by the State Government for providing incentives under various programmes
etc., do not have any role in tariff determination process. It cannot be denied that the
jurisdiction for change of categorization is of the State Commission and not of the
State Government. That apart, for the purpose of tariff determination by the
State Commission, telecom services does not fall under the category of IT
industry…”

13.8 Advancing his arguments further, learned counsel for the State
Commission vehemently submitted that the Appellants have heavily
relied on the facts that the telecom sector has been recognised as
having an infrastructure status, public utility service under Section 22A

(b) of the Legal Services Authority Act; essential service under Section
2 (a)(i) of the Essential Services Maintenance Act,1968; and Section 2

(n) of the Industrial Disputes Act,1947. The contention of the Appellants
is also equally immaterial and irrelevant for a consideration of the
present matter. To support his contentions, learned counsel placed
reliance on the judgment of this Tribunal in A.No.116 of 2006 which has
held as under:-

“..It is possible that the appellant may fall under the category of ‘Industry’
on applying the meaning of the term ‘Industry’ as it is found it other
statutes but that cannot be the basis to determine whether an
appellant is to be charged tariff by treating it as an industry..”

13.9 Regarding contentions of the Appellants that National Telecom Policy,
2012 provides infrastructure status to the telecom sector, learned

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counsel for the Respondent Commission contended that as per
objective Clause 6 of the said policy, the telecom has been recognised
as an infrastructure sector but there is no mention of the telecom section
“being not commercial”. In fact, since 2004, considering the objectives
and content of GoM’s IT and ITES Policy, the Commission has
categorized all the activities covered under GoM’s IT and ITES Policy in
the Industrial category for the purpose of electricity tariff. The
Respondent Commission has continued this approach consistently in its
all subsequent Tariff Orders. In view of these facts, learned counsel
emphasised that there is no violation of the provisions under the
Electricity Act or policies of the State/Central Govt.

Our Findings:-

13.10 It is the contention of the Appellants that the broad classification of the
electricity consumers has been provided under Section 62(3) of the Act
which is unlike Section 49 of the Electricity (Supply) Act, 1948 which
provided for a residuary criteria of classification on factors as deemed fit
by the State Commission but the classification can only be based on the
specified criteria. Accordingly, the criteria laid in the impugned order
that the telecom towers registered under the State Government policy
would be classified as Industry and other telecom towers would be
classified as commercial is contrary to Section 62(3) of the Electricity Act
and hence bad in law. To emphasise their contentions, learned counsel
for the Appellants relied upon the judgment of this Tribunal dated
31.5.2009 in Appeal No. 195 of 2009 (Mumbai International Airport Pvt
Limited v MERC) which set aside the categorisation of Mumbai Airport
under the Commercial Category considering the nature of service

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Judgment of Appeal No.337 of 2016 batch

rendered by the Airport . Similarly, in its other judgment dated
20.10.2011, this Tribunal held that hospitals would not fall under the
commercial category. Learned counsel for the Appellants also pointed
out that reliance placed by the Respondent Commission in the case of
BSNL Ltd is misconceived and not at all applicable to the present case.
Learned counsel alleged that the only criteria for the differentiation by
the State Commission now is the registration of towers under of IT/ITES
Policy of Govt. of Maharashtra. In fact, such pre-requisite condition is
misconceived for the purpose of electricity classification due to the fact
that the purposes for use of electricity is not affected by the registration
process as the nature of the activities whether registered under policy or
not continued to be same.

13.11Learned counsel for the Appellants also drew our attention towards the
IT/ITES Policy of 2003 of Govt. of Maharashtra which provided that the
installation of mobile towers which is part of the cellular notice
telecommunication network of the Appellants and subject matter of the
present Appeals come under the definition of IT/ITES units. Further, it is
evident from the Registration Certificate issued by Govt. of Maharashtra
for the said installations of the Appellants right since the year 2004. To
emphasise that the tele-communications services are part /subset of
information technologies, the Appellants relied on various judgments
such as:-

– Anthony Philip Witek Vs. Commissioner of Income tax. ‘Income
Tax Appellate Tribunal] 2008 110ITD 148 Delhi (2008) 113 TTJ
Delhi 740

– Amir ZaiSangin [Authority for Advance Ruling]
MANU/AR/0002/1997

Page 139 of 148
Judgment of Appeal No.337 of 2016 batch

– Syed Asifuddin and ORs. Vs. The State of Andhra Pradesh and
Anr. [High Court of Andhra Pradesh] Cri Petn. Nos 2601 and 2602
of 2003.

13.12 Admittedly, MSEDCL vide its Circular dated 26.06.2009 tried to
withdraw the status of industrial tariff to mobile towers and the same
was stayed by Hon’ble Bombay High Court vide its Order dated
17.08.2009. Further, in the APRP Tariff Petition of MSEDCL filed
before the State Commission for FY 2008-09, thereby proposed to
exclude the mobile towers from the category of IT and ITES and to
classify them in commercial category which was rejected by the State
Commission and since then these services are continued to be
charged under industrial tariff.

13.13 On the other hand, learned counsel for the Respondent Commission
submitted that tariff for electricity is to be fixed by the appropriate State
Commission on the basis of various factors including the purpose for
which the supply is required under Section 62 (3) of the Electricity Act.
In this regard, learned counsel placed reliance upon the judgment of
this Tribunal in BSNL vs PSERC (Appeal No. 116 of 2006) where the
Tribunal has held that it is for the State Commission to decide which
category a consumer should fall under. Further, in the case of BSNL
vs. UOI, the Apex Court precisely held that mobile towers or devices
are used for transmitting telecommunication signals, and there is no
manufacturing or industrial activity”. Accordingly, learned counsel for
the Respondent Commission contended that in view of the above
mentioned decision of Hon’ble Supreme Court, BSNL was not classified
as industry. Further, in Appeal 88 of 2012(Tata Teleservices vs RERC)
this Tribunal in its judgment dated 20.5.2013 held that:

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Judgment of Appeal No.337 of 2016 batch

“43.IT Policy and other policies issued by the State Government and classification
made by the State Government for providing incentives under various programmes
etc., do not have any role in tariff determination process. It cannot be denied that the
jurisdiction for change of categorization is of the State Commission and not of the
State Government. That apart, for the purpose of tariff determination by the
State Commission, telecom services does not fall under the category of IT
industry…”

13.14 Learned counsel further contended that the contentions of the
Appellants regarding recognition of telecom sector under the
infrastructure status, public utility service under various Act/Policies are
equally immaterial and irrelevant for a consideration of the present
matter. Learned counsel for the Respondent Commission further
contended that as relied by the Appellants, the National Telecom Policy,
2012 provides infrastructure status to the telecom sector but there is no
mention of the telecom section “being not commercial”. In fact, since
2004, considering the objectives and content of GoM’s IT and ITES
Policy, the State Commission has categorized all the activities covered
under GoM’s IT and ITES Policy in the Industrial category for the
purpose of electricity tariff. In view of these facts, learned counsel
emphasised that there is no violation of the provisions under the
Electricity Act or policies of the State/Central Govt.

13.15 After careful consideration and analysis of the submissions of both the
parties, it transpires that as per the ruling of the State Commission, in
the impugned order, the telecom towers registered under the State Govt.
Policy would be classified as industry and other telecom towers would
be classified as commercial which is contrary to Section 62(3) of the
Electricity Act, 2003. The very rationale adopted by the State

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Judgment of Appeal No.337 of 2016 batch

Commission in granting industrial tariff to mobile/telecom towers was
that these services are essential in nature and tantamount to industrial
category despite having no manufacturing activities. It is noticed that
vide the impugned order, it is not that all mobile / telecom towers have
been put under commercial category but the only criteria for their
decision is the registration under the IT/ITES Policy of Govt. of
Maharashtra. Resultantly, such pre-requisite condition may put some
towers under industrial category and some towers under commercial
category which is contrary to the purpose of electricity classification due
to the fact that use/purpose of the electricity is not affected by any
registration process as the nature of the activities whether registered or
not continues to be the same. Moreover, it has been presented by the
Appellants during proceedings that they are registered under the
IT/ITES Policy and some sample certificates were also produced before
us. It is, thus clear that the discom/MSEDCL is now insisting a separate
certificate for each of the thousands odd telecom towers of the
Appellants to avail the industrial tariff. Further, the fact that the mobile
towers and related instalments of the Appellants were treated and
covered in the definition of IT/ITES under the policy of the Govt. of
Maharashtra will also be evident from the registration certificate issued
by the Govt. for the said instalments of the Appellants right since the
year 2004. We have taken note of various judgments relied upon by the
parties and the National Telecom Policy, 2012 which provide that
telecom services are part / sub-set of the information technologies and
hence as industrial units. It is also relevant to note that based on the
nature of services, many services including telecom services have been
recognised as an important infrastructure, public utility services,
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Judgment of Appeal No.337 of 2016 batch

essential services etc. and have been considered under the incentive
scheme as far as electricity tariff is concerned. For instance, airports,
hospitals, cold storage, LPG/CNG bottling plants etc. have been
considered under the industrial tariff which clearly do not involve
manufacturing activities.

13.16 In view of above facts, we opine that the State Commission has not
adequately considered the express provisions of the Electricity Act and
various policies of the State/Central Govt. while passing the impugned
order and thus violates the statutory provisions.

14. Issue No.3-

14.1 Learned counsel for the Appellants submitted that no notice had been
issued by MERC to the Appellants before deciding Case No.48 of 2016
filed by MSEDCL for which the impugned order dated 03.11.2016 has
been passed. Learned counsel further submitted that even in the public
notice and the executive summary in respect of the said case, there was
no mention of the proposed recategorization of mobile towers. Even the
petition filed by MSEDCL does not reflect its proposal for such
recategorization. In the circumstances, the Appellants were not in a
position to know that MSEDCL had sought recategorization of mobile
towers, as alleged. In view of the these facts, the impugned order
dated 3.11.2016 is violative of principles of natural justice. To
strengthen their arguments, learned counsel for the Appellants placed
reliance on the judgment of this Tribunal dated 7.11.2012 passed in
Appeal No.215 of 2012 which had set aside the portion of the tariff
order dated 16.8.2012 regarding recategorization of mobile towers in
view of violation of the principles of natural justice. This Tribunal had

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Judgment of Appeal No.337 of 2016 batch

granted liberty to MSEDCL to file a fresh petition proposing
recategorization of mobile towers, and had specifically directed MERC to
pass appropriate orders after hearing all the concerned parties. Learned
counsel was quick to point that in spite of such clear directions of this
Tribunal, the State Commission did not hear the Appellants before
passing the impugned order dated 3.11.2016. In the circumstances, the
impugned order dated 3.11.2016 is not only violative of the principles of
natural justice, but is also in breach of the order of this Tribunal dated
7.11.2012.

14.2 Learned counsel further submitted that neither MERC nor MSEDCL in
their respective replies have disputed the said submissions of the
Appellants. In this regard, learned counsel relied upon the judgment of
Hon’ble Supreme Court in case of Uma Nath Pandey and others v/s
State of Uttar Pradesh and another, reported in (2009) 12 SCC 40
(paragraph 3).

14.3 Per contra, learned counsel for the State Commission submitted that
the contentions of the Appellants that no notice had been issued by the
Commission before passing the order in Case No.48 of 2016 ofiled by
MSEDCL are denied. He submitted that a public notice and an
Executive Summary was published by MSEDCL inviting suggestions
and objections on MSEDCL’s petition for final true up for FY 2014-15,
Provisional True Up for FY 2015-16 and MYT for FY 2016-17 to FY
2019-20 in Case No. 48 of 2016. Learned counsel clarified that both
these documents clearly mentioned that the copy of the detailed petition
was available on the website of the Commission as well as MSEDCL’s

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website. In its prayer to the Commission, MSEDCL had mentioned “..to
provide tariffs for individual categories as proposed by
MSEDCL..”.MSEDCL had made a proposal to the Commission
regarding the classification of certain telecom towers, etc. under
commercial category, irrespective of whether they were covered under
the IT/ITES Policy of the GoM. Learned counsel indicated that Bharti
Airtel was also one of the objectors before the Commission and is a
party in the present matter also (in Appeal 337 of 2016) and had
categorically submitted as under:

“Bharti Airtel Ltd. stated that MSEDCL should charge Industrial Tariff for
consumption by Mobile Towers…..requiring an IT/ITES registration
certificate..”. Therefore, it is apparent that the status of telecom towers
for tariff determination was a part of the process of public scrutiny and
subjected to comments and suggestions in accordance with Section 64.

14.4 It is, therefore, apparent that status of telecom towers for tariff
determination was a part of the process of public scrutiny and subjected
to comments and suggestions in accordance with Section 64 of the Act.
Further, it is also contended on behalf of the Appellants that there was
no proposal on behalf of MSEDCL regarding the recategorization of the
Telecom Towers. In fact, the proposal was submitted by MSEDCL to
classify certain telecom towers etc. under commercial category,
irrespective of whether they were covered under the IT/ITES policy of
the GOM. However, the Commission observed that in this regard no
rationale has been submitted by MSEDCL for this specific proposal.

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14.5 It would thus appear that adequate notice was given before deciding the
reference case leading to passing of the impugned order and one of the
Appellants namely Bharti Airtel had submitted its comments /
suggestions. As such, there is prima facie no case of violation of
principles of natural justice, as now being alleged by the Appellants.

Our Findings:-

14.6 The Appellants have alleged that no notice had been issued by MERC
to the Appellants before deciding Case No.48 of 2016 filed by MSEDCL
against which the impugned order dated 03.11.2016 has been passed.
It is the contention of the Appellants that neither in the public notice nor
in the executive summary in respect of the said case, there was any
mention and as such the order is not only violative of principles of
natural justice but also in breach of the order of this Tribunal. It is
pertinent to note that neither the State Commission nor the MSEDCL
have disputed the said submissions of the Appellants in their respective
replies.

14.7 On the other hand, learned counsel for the State Commission has tried
to justify the order of the State Commission that copy of the detailed
petition was available on the website of the Commission as well as on
MSEDCL’s website and in its prayer, MSEDCL had mentioned “..to
provide tariffs for individual categories as proposed by MSEDCL..”.
Learned counsel for the Commission contended that one of the
Appellants namely Bharti Airtel was also one of the objectors before
the Commission. Therefore, it is apparent that status of telecom towers
for tariff determination was a part of the process of public scrutiny and

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Judgment of Appeal No.337 of 2016 batch

subjected to comments and suggestions in accordance with Section 64
of the Act.

14.8 We have carefully perused all the materials placed before us during the
pleadings and note that petition filed by MSEDCL before the State
Commission was for final true up for FY 2014-15, provisionally true up
for FY 2015-16, MYT of 2016-17 to 2019-20 in case of 48 of 2016 and it
did not categorically include tariff restructuring of mobile/telecom towers
which is a matter for consideration in these Appeals. It is also worth
considering that when a matter pertaining to several service providers
and numerous mobile towers are being undertaken for tariff
determination/classification, the concerned Appellants ought to have
been given adequate notice/time to present their case and file
comments / objections. We do not find force in the arguments of the
learned counsel for the State Commission that one of the Appellants
namely Bharti Airtel had submitted its comments/suggestions and
hence, it may be concluded that restructuring of tariff for Mobile Towers
was an element in the petition. Accordingly, we hold that the Appellants
were not given requisite notices by the State Commission before
passing the impugned order. As such, a case of violation of principles of
natural justice has been established.

ORDER

In the light of the above, we are of the considered view that the present
Appeals have merits and deserve to be allowed. Hence, Appeals are
allowed. The impugned order dated 03.11.2016 passed by Maharashtra

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Judgment of Appeal No.337 of 2016 batch

Electricity Regulatory Commission in Petition No.48 of 2016 is hereby set
aside to the extent challenged in the Appeals.

In view of the disposal of the Appeals, all the pending IAs do not survive
for consideration and, accordingly, stand disposed of.

No order as to costs.

Pronounced in the Open Court on this 12th day of February, 2020.

(S.D. Dubey) (Justice Manjula Chellur)
Technical Member Chairperson

REPORTABLE / NON-REPORTABLE

Pr

Page 148 of 148

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