9911796707
TMI Blog1997 (9) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... ustrial use as also for manufacturing potable liquor. On 21st March, 1995 at about 10 p.m. the Distillery Manager was informed that rectified spirit is flowing outside of storage warehouse of the Distillery. The Distillery Manager and other officials immediately rushed to the spot but due to lock of storage of the warehouse immediately check on flowing of spirit could not be taken. The said warehouse was locked by the Excise Inspector In-charge of Distillery and the keys of all the locks were with him. The Excise Inspector came to the Distillery at about 12.30 p.m. and opened the lock and repair work was done of the storage tank from which the rectified spirit was flowing. The General Manager of the Distillery informed the Excise Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h leakage. The same was calculated at Rs. 45/- per alcohol litre on the wastage of 34,124.3 alcohol litres amounting to Rs. 15,35,593.50 P. The said loss of revenue was estimated to be the loss which was likely to be incurred by conversion of rectified spirit amounting to Rs. 36,512,3 per alcohol litres for potable purposes. It was stated that the quantity of rectified spirit which was lost was due to sheer negligence of the appellant and the same was likely to be used for the manufacture of Indian made foreign liquor. In that view of the matter, the petitioner was asked to pay a sum of Rs. 15,35,593.50 by way of loss of revenue. 4.The said order of the Commissioner is challenged in this writ petition on several grounds. It was urged on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue of the rectified spirit or alcoholic liquor for human consumption several decisions of the Supreme Court has extensively dealt with the matter. Such as Synthetic Chemicals Ltd. v. State of U.P. Others, reported in 1990 (1) SCC 109; State of U.P. Others, v. Modi Distillery etc., JT 1995 (6) SCC 523; Vam Organic Chemicals Ltd. v. State of U.P. Others, reported in 1997 (2) A.W.C. 984 and Bihar Distillery Another v. Union of India Others, reported in 1997 (2) A.W.C. 879. 6.From a perusal of these decisions it is made clear that upto the stage of the rectified spirit which is not fit for human consumption the Central Government would have exclusive jurisdiction to control and manage the same. They are entitled to levy exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V.V. and the same not being an excisable item under the U.P. Excise Act of 1910, the loss occurring to the spirit of high strength cannot be treated as such and taxed by the State on the facile argument of conversion of rectified spirit for the potable purposes. The goods have to be cleared or removed for potable purpose, then the same become excisable under the State Excise Act, 1910, prior to that storage no duty under the State Excise Act can be levied. There was no conversion of rectified spirit nor the same was cleared or removed at the time of its wastage from the storage as such there was no question of loss of revenue to the State that has to be estimated in terms of para 709 of Excise Manual. The loss of revenue in paragraph 709 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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