Decided on February 13,2015

Development Commissioner Santacruz Electronics Export Processing Appellant
STATE Respondents


- (1.) The Development Commissioner, Santacruz Electronics Export Processing Zone (SEEPZ) Special Economic Zone (SEZ), Andheri (East), Mumbai has filed a Petition on 10 June, 2014 seeking clarification as to whether the SEEPZ SEZ will be considered as a separate licensed area for its Deemed Distribution Licensee (Developer / Co developer) in the light of the amendment dated 3rd March, 2010 of Section 14 of the Electricity Act (EA), 2003, and regarding undertaking distribution of power.
(2.) The Petitioner's prayers are as follows: "a) Hon'ble MERC may please clarify on the issue whether the SEEPZ -SEZ will be considered as separate licensed area for the deemed distribution licensee (Developer / Co developer) of SEEPZ SEZ in the light of amendment dated 3rd March, 2010 under Section 14 of The Electricity Act 2003 and whether the deemed distribution licensee can undertake power distribution by developing own dedicated distribution network for SEEPZ area and at a tariff determined by Hon MERC separately for SEEPZ SEZ..."
(3.) The Petition states that: 3.1 SEEPZ was established in 1973 by the Govt. of India (GoI) as an Export Processing Zone. It mainly houses electronic hardware manufacturing companies, software companies and jewellery manufacturing units, apart from trading units. 3.2 By Notification dated 27 February, 2009 (SO 569) (E)), GoI constituted the SEEPZ SEZ Authority. 3.3 The Ministry of Commerce and Industry (Department of Commerce), GoI, vide Notification dated 3 March, 2010 issued under Section 49(1)(b) of the SEZ Act, 2005, specified that the Developer of the SEZ is deemed to be a Distribution Licensee under the provisions of EA, 2003. 3.4 In the SEEPZ SEZ area, the Developer will also be a Deemed Distribution Licensee under Section 14 of EA, 2003 and will have the right to distribute electricity there. Under Rule 5.5 (C) of the SEZ Rules 2006, the Deemed Distribution Licensee is required to supply uninterrupted power within the SEZ. 3.5 SEZ is a specifically delineated duty free enclave deemed to be foreign territory for the purposes of trade operations, duties and tariff. The fiscal / tax exemptions are available to industries within the SEEPZ SEZ in terms of the SEZ Act and Rules. 3.6 Units in the SEEPZ SEZ suffer financial loss as at present there is no separate Tariff for them despite other fiscal benefits, which impacts the cost of export production activities, and consequently their competiveness. 3.7 The SEEPZ SEZ area is embedded in the licensed area in Mumbai of two existing Distribution Licensees, viz. Reliance Infrastructure Ltd. (RInfra) and the Tata Power Co. (TPC). 3.8 In Appeal No. 4223 of 2012, the Supreme Court has held that if, in a particular area, a Local Authority has its network and does not permit wheeling of electricity by making available its network, the other Distribution Licensee will have to provide the electricity from its own network, if necessary by laying down such network. 3.9 As per the provisions of the EA, 2003, the Licensee for the area will have to comply with the MERC (General Conditions of Distribution Licence) Regulations, 2006, undertake all the functions all the functions envisaged and shall also require to have Specific Conditions of Licence under Section 16 of the EA, 2003 defining its area of supply. The Petitioner wishes to appoint a Co developer (Deemed Distribution Licensee for SEEPZ SEZ), after following the due procedure under the SEZ Act, 2005, who will undertake the distribution of reliable and economical power within the SEEPZ SEZ in addition to the existing Distribution Licensee. ;

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