1975 (12) TMI 163 - SC - Central Excise

Summary

Issues involved: Interpretation of excise duty demand on liquor not lifted by contractors.

Summary:
The Supreme Court addressed the issue of excise duty demand on liquor not lifted by contractors. The Government made a demand for excise duty on liquor that had not been lifted by the contractors. The High Court, following a previous decision, ruled against the Government. The liquor contractors were bound by specific conditions at auction, including the obligation to pay a PRATIKAR amount if the fixed monthly quantity was not taken. The Court emphasized that the State has the exclusive right to manufacture and sell liquor, conferring this right through auctions or private treaties. It was clarified that excise duty is only applicable to drawn liquor, not undrawn liquor. The Court distinguished between the issue price and the lump sum payable for the exclusive privilege, stating that excise duty is not levied on undrawn liquor. The demands for excise duty on undrawn liquor were deemed unjustified, leading to the dismissal of the appeals. Each party was ordered to bear its own costs.