1997 (9) TMI 609 - HC - Central Excise

Summary

Issues:
1. Challenge to orders directing payment of compounding fee and seized stock value.
2. Arbitrariness and discrimination in fixing compounding fee.
3. Lack of notice before imposing compounding fee.
4. Discretionary power of Commissioner in imposing compounding fee.

Detailed Analysis:

1. The writ petitions challenged orders requiring licensees to pay compounding fees and seized stock value under Sec. 47-A of the A.P. Excise Act, 1968. The petitions contended the directions were arbitrary and illegal, emphasizing lack of notice to stock owners. The Government Pleader argued that these provisions aim to prevent illegal sales and protect public money. The court noted the provisions' intent to regulate liquor business and deter illegal activities, finding the exercise of power reasonable and not violative of Art. 14 of the Constitution.

2. In examining the fixation of compounding fees, the court referred to Sec. 47-A(2), which limits the Commissioner's discretion in setting fees. The statute mandates fees not less than five times the duty involved or a minimum of Rs. 15,000 but not exceeding Rs. 1,00,000. The court found the statutory restrictions prevent arbitrary or discriminatory fee imposition, dismissing claims of excessive fees without supporting evidence.

3. The issue of lack of notice before confiscating stocks was raised by a transporter in one petition. However, as the stock owner did not challenge this, the court rejected the transporter's contention, emphasizing the need for the concerned party to raise objections.

4. Lastly, the court addressed the argument of arbitrariness in levying a fixed compounding fee of Rs. 15,000. By highlighting the statutory provisions controlling the Commissioner's discretion in fee imposition, the court concluded that the fee structure was not arbitrary or unconstitutional. The court dismissed all writ petitions, finding no merit in the challenges raised.

In conclusion, the court upheld the legality of the orders passed by the Commissioner of Excise, emphasizing the statutory framework's purpose to regulate the liquor business and deter illegal activities. The judgment dismissed the writ petitions challenging the compounding fees and seized stock value payments, citing the statutory provisions guiding the Commissioner's discretionary powers as reasonable and non-discriminatory.