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TMI Blog2022 (3) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... duty in respect of industrial alcohol. Different legislations in the different States dealing with such a power of the State Government came up for consideration before the Constitution Bench of this Court in the said case. The Constitution Bench observed thus Constitution makers distributed the term alcohol liquor into two heads, viz., (a) for human consumption; and (b) other than for human consumption. It has been held that the alcoholic liquors, which are for human consumption, are put in Entry 51 List II authorizing the State Legislature to levy tax on them, whereas alcoholic liquors other than for human consumption have been left to the Central Legislature under Entry 84 for levy of duty of excise. It has been held that what has been excluded in Entry 84 has specifically been put within the authority of the State for purposes of taxation. The Constitution Bench clearly held that the State Legislature had no authority to levy duty or tax on alcohol, which is not for human consumption as that could be levied only by the Centre. A three Judge Bench of this Court in the case of STATE OF UP. ORS. VERSUS M/S. MODI DISTILLERY ETC. AND M/S. AJUDHIA DISTILLERY [ 1995 (8) TMI 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tural Alcohol Column (hereinafter referred to ENA Column ). It is the case of the respondent-Company that the said ENA Column installed by it was the first of its kind in the State of Orissa. It was the case of the respondent-Company that the manufacturing process resulted in generation of certain weak spirit, which was not potable, and since the rules did not provide for allowing such a waste product, a representation was made by the respondent-Company to the appellant No.2 on 19th August, 1992. Accordingly, the appellants constituted a Technical Committee (hereinafter referred to as the Committee ) on 21st November, 1992, to examine the following issues: i) to examine the details of E.N.A. columns including stock of spirit inside the same. ii) Loss during trial run along with the limit of wastage during the E.N.A. process adopted by M/s Utkal Distillery Pvt. Ltd. at Brahmapura Khurda in the district of Puri. 5. The Committee submitted its report on 17th June 1993. The Committee found that though there were provisions in the Boards Excise Rules, 1965 for loss of spirit during transit, during storage, and during bottling, there was no provision for loss of spiri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand notices dated 12th March, 2003 and 20th May, 2005, were issued to the respondent-Company, which were challenged by it before the High Court of Orissa by way of Writ Petitions being Writ Petition (Civil) No.3097 of 2003 and Writ Petition (Civil) No.7108 of 2005 respectively. 10. All the three writ petitions were finally decided together by the High Court on 5th December, 2008, thereby allowing the said writ petitions, as aforesaid. Being aggrieved, the present appeals are filed. 11. We have heard Shri M.N. Rao, learned Senior Counsel appearing on behalf of the appellants and Shri Soumyajit Pani, learned counsel appearing on behalf of the respondent. 12. Shri M.N. Rao, learned Senior Counsel appearing on behalf of the appellants submits that the Committee was constituted on the basis of the representation of the respondent-Company. He submitted that once the Committee had recommended allowing of wastage only to the extent of 2%, it was not permissible for the respondent-Company to submit that the demand of excise duty on weak spirit, which was more than 2%, is not tenable. He submitted that the High Court has erred in allowing the writ petitions. 13. Shri Soumyajit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel for the petitioners this doctrine of privilege and consideration for sale of privilege also could be available to the State only in respect of alcohol or alcoholic liquors which are for human consumption. According to the learned counsel by merely widening the definition of intoxicating liquors in re10 spective excise laws enacted by the States the ambit of authority of taxation could not be enlarged by the State legislature when in List II Entry 51 the words used are alcoholic liquors for human consumption. Entry 84 in List I reads: 84. Duties of excise on tobacco and other goods manufactured or produced in India except- (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilet preparations containing alcohol or any substance included in subparagraph (b) of this entry. 96. Entry 51 in List II reads: 51. Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India:- (a) alcoholic liquors for human consumption; (b) opium, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in public interest under Industries Development and Regulation Act. 99. Entry 52 List I reads as under: 52. Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest. 100. Such a declaration is made by the Parliament and this industry that is industry based on fermentation and alcohol has been declared to be an industry under that Act and therefore is directly under the control of the Centre and therefore even in respect of regulation the authority of the State legislature in Entry 8 List II could only be subject to the Industries Development and Regulation Act or Rules made by the Centre. 101. Under these circumstances therefore it is clear that the State legislature had no authority to levy duty or tax on alcohol which is not for human consumption as that could only be levied by the Centre. 17. It could thus be seen that the Constitution Bench has held that the Constitution makers distributed the term alcohol liquor into two heads, viz., (a) for human consumption; and (b) other than for human consumption. It has been held that the alcoholic liquors, which are for human consumption, are p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and manufacture (1) An excise duty or countervailing duty, as the case may be, at such rate or rates as the State Government may direct, may be imposed either generally or for any specified local area, on (a) any excisable article imported; or (b) any excisable article exported; or (c) any excisable article transported; or (d) any excisable article (other than tari) manufactured under any licence granted in respect of Clause (a) of Section 13; or (e) any hemp plant cultivated, or any portion of such plant collected, under any licence granted in respect of Clause (b) or Clause (c) of Section 13; or (f) any excisable article manufactured in any distillery or brewery licensed, established, authorised or continued under this Act. Explanation Duty may be imposed on any article under this subsection at different rates according to the places to which such article is to be removed for consumption, or according to the varying strengths and quality of such article. 21. Perusal of Section 27(1) of the said Act would reveal that the State s power to impose duty on import, export, transport and manufacture is only in respect of any e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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