TMI Blog1975 (11) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... actice of making a bill for the value of the goods (liquor) sold to the intending purchaser and after the preparation of the bill of sale, the purchaser pays the requisite excise duty in his own name for the liquor purchased by him and the excise departmental officials would permit the removal of the liquor purchased by the customer-buyer from the bonded warehouse. According to the petitioner, the customer, who purchases the goods lying in the bonded warehouse, agrees to pay the price of the liquor alone to the petitioner and he should himself pay the excise duty before the removal of liquor so purchased from the bonded warehouse. For the assessment year 1971-72, the Commercial Tax Officer, Hyderabad Ill, by his order dated 16th August, 1972, imposed sales tax on a turnover of Rs. 7,17,264.35 representing the excise duty paid by the purchasers separately and which was not included specifically in the bills issued by the petitioner-assessee. However, on appeal, the Assistant Commissioner deleted the disputed turnover pertaining to the excise duty paid by the purchasers directly from the assessment holding that the duty paid by the purchasers does not, in the circumstances, form part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouse that the incidence of excise duty occurs, that the petitioner-assessee is entitled to enter into an agreement with its customers that excise duty must be paid by them alone directly and as the amount of excise duty paid by the purchaser has not been included in the bill of sale, it did not form part of turnover of the petitioner and, therefore, the impugned notice is without jurisdiction and that there is no justification for the proposed revision of the order of the Assistant Commissioner. In support of his contention, he relied upon rule 10 of the Andhra Pradesh Indian Liquor (Storage in Bond) Rules, 1959, and a decision of this court in W.P. Nos. 3698, 3707 and 3797 of 1972 dated 21st September, 1972. This claim of the petitioner is resisted by the learned Government Pleader for Commercial Taxes contending, inter alia, that a statutory liability to pay countervailing duty is imposed upon the importer although the payment is postponed if the goods are stored in a bonded warehouse belonging to the importer and excise duty on liquor is payable at the point of manufacture or production in the State but not at the time of removal of the same from the bonded warehouse and, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levy countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India. The fact that countervailing duties may be imposed at the same or lower rates suggests that they are meant to counterbalance the duties of excise imposed on goods manufactured in the State. They may be imposed at the same rate as excise duties or at a lower rate, presumably to equalise the burden after taking into account the cost of transport from the place of manufacture to the taxing State. It seems, therefore, that countervailing duties are meant to equalise the burden on alcoholic liquors imported from outside the State and the burden placed by excise duties on alcoholic liquors manufactured or produced in the State. If no alcoholic liquors similar to those produced or manufactured imported into the State are produced or manufactured, the right to impose counterbalancing duties of excise levied on the goods manufactured in the State will not arise. It may therefore be accepted that countervailing duties can only be levied if similar goods are actually produced or manufactured in the State on which excise duties are being levied." Rule 4 of the Andhra Pradesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd its nature and character and the provisions of sections 21 and 22 of the Andhra Pradesh Excise Act, 1968, and the relevant Rules made thereunder, we are of the firm view that the incidence of countervailing duty which is intended and meant to equalise the burden on alcoholic liquors imported from outside the State and the burden placed by excise duties on alcoholic liquors manufactured or produced in the State, occurs or arises at the point of importation of the alcoholic liquor or any other excisable article from outside the State into the State of Andhra Pradesh. We are unable to agree with the submission of the petitioner's counsel that the liability to pay countervailing duty arises only at the point of removal of the liquors stored in the bonded warehouse but not at the point of importation. The mode and method of collection of excise duty as well as countervailing duty cannot be confused with the nature and character of the duties as well as the incidence of taxation. The State is also entitled to provide a machinery for the collection of excise duty as well as countervailing duty on liquors with the prime intendment of encouraging the industry and business and at the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Indian liquor from the bonded warehouse, shall make an application in that behalf in form BW 3 to the Deputy Commissioner through the officer-in-charge. The licensee has to maintain accounts under rule 11. He has also to account for loss of Indian liquor under rule 12. In case of any loss to the Indian liquor stored in bond or issued from the bonded warehouse, the licensee must report to the Commissioner of Excise and, if he fails to satisfactorily account for such loss, the licensee shall be liable to pay excise duty and fees at the full rates payable thereon. The petitioner herein is, no doubt, a person who owned and possessed a bonded warehouse to store the imported liquor manufactured outside the State. The petitioner is, therefore, entitled to have the concession of not paying the countervailing duty on the act of importation before the actual importation. The liability to pay the countervailing duty is postponed till the removal of the imported liquor from his warehouse but, however, it has already accrued and arisen at the point of importation of liquor manufactured outside the State. In such an event, rule 10 would come into play. The purchaser from the assessee or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot entitled to prohibit the sale of liquor stored in a bonded warehouse without the payment of the requisite excise duty. But, however, it was held that the liquor shall not be removed until and unless the excise duty is paid. In other words, that decision is an authority for the proposition that sale of liquors stored in bonded warehouses cannot be prohibited as it is open to the owner of the liquor or goods to enter into an agreement of sale or sell the same to his customers and the Government is only entitled for the recovery of excise duty or countervailing duty before the actual removal of the same from the bonded warehouse. That decision, therefore, will not come to the aid of the petitioner herein. The aspect relating to the nature and character of the countervailing duty or excise duty and the statutory liability to pay the same has not been considered by the learned Judge. Any observations made by the learned Judge contrary to the view taken by us in this case as well as T.R.C. Nos. 27 and 28 of 1974, etc., batch (Shaw Wallace Co. Ltd. v. State of Andhra Pradesh[1976] 37 S.T.C. 418., with regard to the statutory liability on, and the duty of, the manufacturer or importer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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