9911796707
TMI Blog1995 (8) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... trength spirit, of 80 to 85%, from distillery to warehouse. Group 'C' related to the demand of excise duty on obscuration . Group 'D' related to excise duty sought to be levied on pipeline wastage. The judgment of the High Court dated 9th March, 1979, related only to duty on obscuration (i.e.,Group 'C'). It is convenient to state immediately that the issue relating to Group 'A' that is, the demands for excise duty on the wastage of IMFL exported outside the State, is now covered in its favour by the judgment of this Court in State of U.P. and ors. vs. Delhi Cloth Mills and anr., 1991-1 S.C.C. 454,and this is not disputed by the manufacturers. In regard to Groups B. C and D, the High Court took the view that the stage at which the State could levy excise duty had not been reached. Mr. Sehgal, learned counsel for the State, submitted that the State was competent to levy excise duty on liquor for human consumption. It was the content of liquor in the IMFL which was exigible. Therefore, wastage of liquor from the time the process of manufacture of IMFL began was exigible to excise duty. In the alternative, Mr. Sehgal submitted that if it was the IMFL, the ultimate beverage, which alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isable article is to be removed for consumption. or according to the varying strength and quality of such article. (2) The State Government shall, in imposing an excise duty or a countervailing duty as aforesaid and fixing its rate, be guided by the directive principles specified in Article 47 of the Constitution of India. (3) Such duty shall not exceed the maximum as provided hereinafter :- (a) Countervailing duty on excisable articles imported in accordance with the provisions of Section 12 (1)- Item Description Maximum No. of rate of excisable duty articles 1. Country liquor Rs.20 per litre. (Excepting tari) Liquor manufactured in India and sophisticated or coloured so as to resemble in flavour or colour liquor imported into India; and rectified spirit- (a) Ale,beer, porter, cider 5 per cent. and other fermented liquors (b) Perfumed spirit (other than medicinal and toilet preparations) 15 per litre (c) Wines 8 per litre (d) Liquors, cordials, mixtures and other preparations containing spirit not otherwise specified (other than drugs and medicines ) 70 per litre (e) Brandy, gin, whisky, rums, rectified spirit and other sorts of spirit not otherwis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticated or coloured so as to resemble in flavour or colour liquor imported into India; and rectified spirit- (a) Ale, beer, porter, cider and other fermented liquors 5per litre. (b) Perfumed spirit (other than medicinal and toilet preparations) 15per litre. (c) Wines 8 per litre. (d) Liquors, cordials, mixtures and other preparations containing spirit not otherwise specified (other than drugs and medicines) 70per litre (e)Brandy, gin, whisky, rum, rectified spirit and other sorts of spirit not otherwise specified. 60per litre of alcohol. (4) Notwithstanding anything contained in sub-section (3), the maximum rate of duty on Ale, beer, porter, cider and other fermented liquors occurring against item 2(a) in the table, in clause (e) of sub-section (3) shall be deemed to be Rupees 5 per litre with effect from June 4, 1975 and any notification issued on or after June 4, 1975 which is in conformity with the provisions of this sub-section shall be deemed to be, and always to have been valid and lawful as if the provisions of this sub-section were in force at all material times." It is convenient now to note the judgment of a bench of seven learned Judges of this Court in Synthetics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y excise duty upon in the Gruop 'B' cases is the wastage of liquor after distillation, but before dilution; and in the Group 'D' case, the pipeline loss of liquor during the process of manufacture, before dilution. It is clear, therefore, that what the State seeks to levy excise duty upon is not alcoholic liquor for human consumption but the raw material or input still in process of being rendered fit for consumption by human beings. The State is not empowered to levy excise duty on the raw material or input that is in the process of being made into alcoholic liquor for human consumption. That the measure of excise duty upon alcoholic liquor for human consumption is the alcoholic strength thereof does not make any difference is this behalf. It is only the alcoholic strength of the final product which is relevant. The process of obscuration, concerned in the Group 'C' cases, needs explanation. The process of obscuration takes place in the manufacture of rum, other than white rum. Therein caremel is added to plain spirit. This results in obscuration or an apparant but not actual loss of proof gallons, that is, of alcoholic strength. It is upon this apparent loss that the State seeks ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
