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TMI Blog2025 (1) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the petitioners i.e rectified spirit etc. - HELD THAT:- The State Excise Act was indisputably within the legislative competence of the State when it was enacted and continues to remain so even as on date. Otherwise also, there is no challenge to the vires of the State Excise Act. The impugned clause in the policy has been framed by the Government of Jammu and Kashmir in the exercise of powers vested in it under Section 16, read with Section 5, of the State Excise Act. So long as we do not find any fault with the State Excise Act, and in particular, with Sections 5 and 16 thereof, the impugned clause in the Excise Policy cannot be declared bad and unconstitutional for being beyond the legislative competence of the State Legislature. There are substance in the submission of the learned counsel appearing for the petitioners who are not using in their units rectified spirit/alcohol and denatured spirit etc. for medicinal and toiletry preparations. This so because the impugned clause itself makes it clear beyond any doubt that what is sought to be levied as the duty of excise at the rate of 10 per litre is only on the rectified spirit/alcohol/denatured spirit imported in the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. UPL Ltd., Ritzy Polymers, Medley Pharmaceuticals Ltd., M/s. Optima Farm Solutions Ltd., Montage Enterprises Pvt. Ltd., Ethicare Laboratories, Accent Pharma, Zuventus Healthcare Limited, M/s. Agro Life Science Corp., Uflex Limited Unit II, Ritzy Polymers, M/s. Krishi Rasayan Export Pvt. Ltd., Uflex Limited Unit III, Vivek Pharmachem India Limited EPIP, Versus State of Jammu and Kashmir through Commissioner Secretary to Government, Finance Department., Excise Commissioner, J K Government, Excise Department, Jammu, Director, Industries, Jammu, Deputy Excise Commissioner, Jammu Deputy Excise Commissioner, Lakhanpur, UT of Jammu and Kashmir through Commissioner Secretary to Government, Finance Department., UT of J K through commissioner/Secretary Industries and Commerce Department. JUDGMENT SANJEEV KUMAR J 1. The petitioners in all these petitions are entrepreneurs who have established their industrial units in the UT of Jammu and Kashmir. Some of these units are engaged in the manufacturing of medicinal and toiletry preparations, whereas the others manufacture various products out of the raw materials, such as absolute alcohol/denatured spirit/special denatured spirit/rectified spir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and that it is in the exercise of powers conferred by the State Excise Act, the impugned clause in the Excise Policy of 2019-2020 has been framed. 4. Having heard learned counsels for the parties and perused the material on record, it is necessary to first advert to the Excise Policy 2019-20 promulgated vide SRO 128 dated 25-02-2019 and the impugned clause 14 (B) thereof. The impugned clause reads thus: 14. Excise Duty: -CIVIL A .. B Rectified spirit, alcohol, denatured spirit and molasses Type Rate Rectified spirit/alcohol/denatured spirit for use in medicinal and toiletry preparations, other than in manufacture of liquor Rs. 10/litre Molasses Rs. 20 per quintal 5. SRO 128 (supra) professes to promulgate the Excise Policy 2019-20, which was to come into force on 26.02.2019 and to remain in force till 31.03.2020. The policy, as is apparent from reading of its objectives, was issued to simplify the regulatory structure by rationalizing and reducing the number of taxes, duties and other levies, thereby maximizing revenue realization. It also aimed to promote greater social consciousness about the harmful effects of consumption of liquor and alcoholic beverages etc. Apart from prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act which reads as under: 16 Duty on liquor or intoxicating drugs.- A duty shall, if the Government so direct, be levied on all liquor and intoxicating drugs manufactured in the territories of the State or imported into or exported from the State of such amount as the Government may from time to time prescribe; Provided that it shall be lawful for the Government to exempt any liquor or intoxicating drug from any duty to which the same may be liable under any of the provisions of this Act . 11. It is, thus, evident that in terms of Section 16, the Government is empowered to levy duty on all liquor and intoxicating drugs manufactured in the territories of the State or imported into or exported from the State. The Government is also empowered to prescribe the rate of such duty. It is in the exercise of powers conferred upon the Government under Section 16 of the State Excise Act, the impugned clause in SRO 128 (supra) has been framed and a duty at the rate of Rs.10 per litre has been imposed on rectified spirit/alcohol/denatured spirit for use in medicinal and toiletry preparations. The aforesaid raw materials used in the manufacture of liquor are, however, exempted. 12. It is nei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise referable to Entry 84 is only with regard to aforementioned goods manufactured and produced in India and does not touch upon such goods imported in or exported from a particular State. Entry 84 even after its amendment w.e.f 16.09.2016 does not take away, in any manner, the legislative competence of the State of Jammu and Kashmir to levy duty of excise on the import of liquor in the State of Jammu and Kashmir for manufacture of medicinal and toiletry preparations etc. Entry 54 of the State list, which in any case was not applicable to the State of Jammu and Kashmir prior to 5th August 2019 when Article 370 of the Constitution was suitably amended and abridged, only provides for the imposition of taxes through legislation on the sale of various commodities, including alcoholic liquor for human consumption. Entry 51 of the State list, which was relied upon by the learned counsel for the petitioners, to buttress their argument, was not applicable to the State of Jammu and Kashmir when the impugned excise policy was promulgated. The Entry, as is apparent from its bare reading, confers legislative power on the States to impose excise duty on goods manufactured and produced within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned clause in the policy has been framed by the Government of Jammu and Kashmir in the exercise of powers vested in it under Section 16, read with Section 5, of the State Excise Act. So long as we do not find any fault with the State Excise Act, and in particular, with Sections 5 and 16 thereof, the impugned clause in the Excise Policy cannot be declared bad and unconstitutional for being beyond the legislative competence of the State Legislature. We, however, find substance in the submission of the learned counsel appearing for the petitioners who are not using in their units rectified spirit/alcohol and denatured spirit etc. for medicinal and toiletry preparations. This so because the impugned clause itself makes it clear beyond any doubt that what is sought to be levied as the duty of excise at the rate of 10 per litre is only on the rectified spirit/alcohol/denatured spirit imported in the State of Jammu and Kashmir for its use in medicinal and toiletry preparations. The expression other than in manufacture of liquor is redundant appendix and needs to be ignored. As a matter of fact, the import of rectified spirit/alcohol/denatured spirit in the State of Jammu and Kashmir for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sly. The tax under the CGST Act, 2017 and the IGST ACT, 2017, and the duty of excise under the State Excise Act are legally distinct and address separate stages of economic activity. The plea of double taxation is, thus, a hollow argument unworthy of acceptance. 24. May be it is true that rectified spirit, alcohol, or denatured spirit supplied in the State of Jammu and Kashmir (now UT of J K) from other State/States is exigible to tax under Section 7 of IGST Act, 2017, except when used for the manufacture of liquor fit for human consumption. However, that does not take away the power of the State to levy a duty of excise under Section 16 of the State Excise Act when such goods are imported by a unit for use in medicinal and toilet preparations. The IGST is charged by the Center on inter-State supply of goods and services, as per nature of such goods or services, as the case may be. The duty of excise impugned is on the quantity of goods imported for a particular use. The two levies, being legally distinct, can be levied simultaneously, and such a levy is not hit by the double taxation, as urged by learned counsel appearing for the petitioners. 25. We have deliberately avoided to go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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