2013 (5) TMI 139 - HC - Central Excise

Remission of the licence fee and grant of compensation - decline of claim as remission of the licence fee and for grant of compensation - assessee submitted a loss of sale of 50 working days suffered due to closure of shop attributed to the orders passed by the administrative authorities - Held that - The District Magistrate, has failed to take into consideration Rule 15 of the Rules which permits the licensee to lift 20% extra quantity of country liquor over and above monthly minimum guarantee quota. The District Magistrate had also failed to take into consideration the fact that in case the petitioner was permitted to run the shop during the said period, he might have sold more quantity of liquor so as to exhaust the upper limit which is 20% more than the minimum guarantee quota. Further failure to take into consideration, Rule 17 of the Rules which gives clear indication that the licenced premises will remain closed only on 14th April (Ambedkar Jayanti), 15th August (Independence Day), 2nd October (Gandhi Jayanti), 26th January (Republic Day) and up to 3 more days as notified for closure by the Licensing Authority or on the basis of order of the Licensing Authority on account of law and order or General Election related activity. No finding has been recorded in the impugned order that the closure of the shop beyond the prescribed period under Rule 17, was on account of the order of the Licensing Authority, keeping in view the law and order situation or General Election related activity. In this view of the matter the impugned order passed by the District Magistrate cannot be sustained & directed to pass fresh orders keeping in view the observations made hereinabove.

Summary

Issues:
Claim for remission of license fee and compensation due to closure of liquor shop beyond prescribed period.

Analysis:
1. The petitioner, a licensee for the sale of country liquor, claimed compensation for the closure of the shop due to administrative orders. The shop remained closed for 51 days in 2006 and for a period in 2008, leading to a loss of sales days. The petitioner filed applications for remission of license fees, which were rejected by the District Magistrate based on the petitioner lifting more liquor than the minimum guarantee quota for the respective years.

2. The petitioner contended that the rejection was illegal as Rule 15 of the Uttar Pradesh Excise Rules allows licensees to lift 20% more than the minimum quota. The petitioner argued that if the shop had been open, he would have lifted the additional quantity, which was not considered by the District Magistrate. Additionally, Rule 17 specifies the permitted closure days, and no compensation is to be given for those closures unless ordered by the Licensing Authority for specific reasons.

3. The Court found the District Magistrate's reasoning flawed as he failed to consider Rule 15 and Rule 17 of the Excise Rules. The District Magistrate did not assess if the closure was due to orders from the Licensing Authority based on law and order or election-related activities. As a result, the Court quashed the District Magistrate's order and directed a fresh assessment considering the relevant rules and circumstances.

4. The Court ordered the District Magistrate to reevaluate the petitioner's claim for remission of license fees and compensation in light of the observations made. The petitioner was instructed to submit a certified copy of the order to the Collector, and the District Magistrate was given a deadline to pass fresh orders within a month. Consequently, the writ petition was disposed of, emphasizing the importance of adhering to the legal provisions and factual circumstances in such matters.