1993 (3) TMI 351 - SC - Central Excise

Summary

Issues:
1. Exclusive power of the Central Government to grant a license for the manufacture of industrial alcohol.
2. Applicability of provisions in the U.P. Excise Manual for obtaining a PD-2 license.
3. State Government's power to ensure industrial alcohol is not converted into potable alcohol.
4. Direction to allot molasses to the petitioner.
5. Validity of the direction given by the High Court regarding molasses supply.

Analysis:

1. The Supreme Court reiterated the exclusive power of the Central Government to grant a license for the manufacture of industrial alcohol. It was clarified that obtaining a PD-2 license from the Excise Commissioner, U.P., Allahabad was not necessary for manufacturing industrial alcohol. The State's power to regulate nonpotable alcohol to prevent its misuse as potable alcohol was affirmed. The State could charge excise duty, sales tax, and fees for services related to potable alcohol.

2. The High Court's order emphasized that provisions in the U.P. Excise Manual for obtaining a PD-2 license did not apply to the manufacture of industrial alcohol. However, other provisions of the U.P. Excise Act and Manual were applicable to prevent the conversion of industrial alcohol into potable alcohol.

3. The State Government was empowered to ensure that industrial alcohol was not converted into potable alcohol. The judgment recognized the State's authority to regulate and prevent abuse, such as converting rectified spirit into potable liquor by adding water.

4. The High Court directed the respondents to allot molasses to the petitioner based on an assurance given in a government order dated 23.3.1989. The petitioner claimed that this order had been extended in subsequent years. The Supreme Court clarified that the supply of molasses should be in accordance with the law and not contrary to any regulations governing molasses supply.

5. The Supreme Court dismissed the Special Leave Petition, subject to the observations made regarding the direction to allot molasses. It rejected additional contentions raised by the State's counsel since those were not presented before the High Court. The judgment upheld the principles established by previous decisions and affirmed the State's authority in regulating alcohol production and supply.