{"id":9166,"date":"2026-05-20T17:27:03","date_gmt":"2026-05-20T11:57:03","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=9166"},"modified":"2026-05-20T17:27:03","modified_gmt":"2026-05-20T11:57:03","slug":"captive-power-plant-eligible-for-20-duty-rate-sc","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/captive-power-plant-eligible-for-20-duty-rate-sc","title":{"rendered":"Captive Power Plant Eligible for 20% Duty Rate | SC"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/customs\/101010000000419426\/power-plant-qualified-as-captive-plant-under-rule-3-concessional-20-duty-rate-admissible-sc\">Coromandal Electric Co. Ltd. vs. Commissioner of Customs, Tuticorin (2026) 42 Centax 81 (S.C.)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong><span id=\"111170000000114774\">Pamidighantam Sri Narasimha<\/span><\/strong> &amp; <strong><span id=\"111170000000081772\">Alok Aradhe<\/span><\/strong>, JJ<\/li>\n<li><strong>Ms Nitum Jain<\/strong>, <strong>Ms Charanya Lakshmikumaran<\/strong>, <strong>Ms Neha Choudhary<\/strong>, <strong>S\/Shri Swastik Mishra<\/strong>, <strong>Ms Medha Sinha<\/strong>, <strong>L. Badri Narayanan<\/strong>, <strong>Atreya Gc<\/strong>, Advocates,\u00a0<strong>M.P. Devanath<\/strong>, AOR, for the Petitioner<\/li>\n<li><strong>S\/Shri N. Venkataraman<\/strong>, A.S.G.,\u00a0<strong>V.C. Bharathi<\/strong>,<strong> Piyush Beriwal<\/strong>,<strong> Ms Rukhmini Bobde<\/strong>,<strong> Bhuvan Mishra<\/strong>,<strong> Arijit Prasad<\/strong>,<strong> Udai Khanna<\/strong>, Advocates,\u00a0<strong>Gurmeet Singh Makker<\/strong>, AOR, for the Respondent<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>The assessee-company had set up a power plant to cater to the sole consumer of electricity generated by the plant. The captive user held more than 26% ownership in the assessee-company and consumed more than 51% of the electricity generated. The assessee-company claimed concessional duty benefit under Notification No. 21\/2002-Customs, dated 01-03-2002 in respect of goods falling under Heading No. 9801 relating to power generation projects. The Assistant Commissioner of Customs denied the benefit of concessional duty. The Commissioner of Customs (Appeals) reversed the order passed by the Assistant Commissioner of Customs. Thereafter, the CESTAT held that under Rule 3 of the Electricity Rules, 2005, the impugned power plant was required to be considered as a captive power plant since the captive user held more than 26% ownership in the assessee-company and consumed more than 51% of the electricity generated. CESTAT further held that the concessional duty rate of 20% was applicable in respect of the impugned captive power plant despite its registration under the Project Import Regulations. The order passed by CESTAT was challenged before the Supreme Court. The matter was accordingly placed before the Hon\u2019ble Supreme Court.<\/p>\n<h2><em>Supreme Court Held<\/em><\/h2>\n<p>The Hon\u2019ble Supreme Court held that the findings arrived at by CESTAT were correct in law and on the facts. It was observed that Rule 3 of the Electricity Rules, 2005 treats a power plant as a captive power plant where the captive user holds more than 26% ownership and consumes more than 51% of the electricity generated. The Court upheld the finding that the conditions prescribed under Rule 3 stood satisfied in the present case and the power plant qualified as a captive power plant. It was further held that the concessional duty rate of 20% was admissible in respect of the impugned captive power plant despite its registration under the Project Import Regulations. Accordingly, the civil appeal was dismissed.<\/p>\n<h2><em>List of Cases Reviewed<\/em><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=2010%20(255)%20E.L.T.%20406%20(Tri.%20-%20Chennai)&amp;itemType=AP\">Commissioner v. Coromandel Electric Co. Ltd.<\/a> \u2014 2010 (255) E.L.T. 406 (Tri. &#8211; Chennai) \u2014 Affirmed [Para 2]<\/li>\n<\/ul>\n<h2><em>List of Notifications Cited<\/em><\/h2>\n<ul>\n<li>Notification No. 21\/2002-Cus., dated 1-3-2002 [Paras 1, 2]<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: Coromandal Electric Co. Ltd. vs. Commissioner of Customs, Tuticorin (2026)&hellip;<\/p>\n","protected":false},"author":19,"featured_media":9178,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38,177,47],"tags":[],"class_list":["post-9166","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-customs","category-customs-news","category-custom-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Captive Power Plant Eligible for 20% Duty Rate | SC<\/title>\n<meta name=\"description\" content=\"Supreme Court held that a power plant satisfying Rule 3 captive use conditions qualifies for concessional 20% customs duty benefit.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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