CERC Rejects Phelan Energy’s Prayer to Review Old Order by SECI

The Central Electricity Regulatory Commission (CERC) has rejected the review petition of solar developer Phelan Energy India RJ Pvt. Limited, which was filed in relation to an order passed by the Solar Energy Corporation of India Limited (SECI) in 2019.

Phelan Energy stated before CERC that in an order passed in October, 2019, SECI had denied compensation of approximately Rs. 5.44 crore (which Phelan had sought on account of the imposition of safeguard duty), citing such claims to be beyond the Commercial Operation Date (COD) even though the Bill of Entry for such claims was prior to the COD.

Phelan Energy argued that SECI’s order was inconsistent with subsequent orders passed by the commission in which the claims of safeguard duty have been allowed beyond Scheduled Commissioning Date (‘SCoD’) and up to Commercial Operation Date (‘COD’) of the project.

Phelan Energy requested CERC to modify SECI’s order to allow for compensation on account of imposition of safeguard duty for import of solar cells and modules even beyond the commissioning of the project. The developer also requested the commission to pass “any such other and further reliefs as this Commission deems just and proper in the nature and circumstances of the present case.”

Phelan submitted that as per the contractual arrangement with EPC contractor, the modules were imported by the contractor and the safeguard duty in relation to the same was paid by them. As evident from Bill of Entry, all the modules were imported and liability to pay safeguard duty in relation to the same accrued prior to COD. However, solely due to operational reasons, the invoicing by contractor to Phelan Energy was delayed and actual payment of safeguard duty to its contractor took place after COD, said Phelan.

In response to the present petition, SECI submitted to CERC that it has already allowed and considered the claims of safeguard duty with respect to COD instead of SCoD in line with subsequent decisions of the Commission.

SECI also stated that there was an inordinate delay of 161 days on the part of Phelan in submitting this petition. Phelan accepted the delay and explained that it occurred mainly on account of the petitioner being occupied in truing up its account and collecting documents/ details for submission of incremental impact of change in law expenditure, significant management changes and outbreak of Covid-19 and consequent lockdown. Phelan prayed that the delay may be condoned, which CERC accepted.

After considering the facts of the matter, CERC gave the following judgment:

“We further observe that SECI has submitted that there is no evidence available regarding installation of such modules/cells at the project site by COD and the one to one correlation between the modules/cells imported and those that are installed up to COD has not been established. The Review Petitioner [Phelan] has neither pointed out any grounds for review of the impugned Order, nor pointed out any reasons for invocation of Regulation 103A of the CERC (Conduct of Business) Regulations, 1999. The prayer of the Review Petitioner is not covered under any of the grounds of review as provided in Order 47 Rule 1 of Code of Civil Procedure, 1908. Review of an order on the basis of decisions in subsequent petitions is not permissible in law. However, we do note that the Respondent No.1, SECI, has already allowed the claims of safeguard duty with respect to COD instead of SCoD in line with subsequent decisions of the Commission. Thus, as submitted by SECI, in implementation, the impugned Order dated 04.10.2019 in Petition No. 69/MP/2019 stands consistent with the subsequent Orders of the Commission in which the claims of safeguard duty has been allowed beyond SCoD and up to COD of the project.”

“Hence, there is no ground for review of the impugned Order and as such the Review Petition is not allowed,” concluded the commission.