TMI Blog2002 (4) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... nt herein. The controversy raised in this appeal is confined to the rate of octroi duty levied on the Rectified Spirit imported by the appellant. On the Rectified Spirit imported by the appellant, the local authorities had been charging octroi duty @ 1.5% falling under Entry 37 of Class III of the Schedule O annexed to the Aurangabad City Municipal Corporation Octroi Rules (for short the `Rules') even before the establishment of the respondent-Corporation which came into force on 1.3.1984. Thereafter also, it continued to collect octroi duty at the same rate. Surprisingly, the appellant received a letter dated 5th August, 1986 from the respondent stating that the Rectified Spirit which the appellant had been importing was charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Wine and spirits and beer ganja, bhang, opium, charas. 5.00% Class III Articles used for fuel, lighting, washing industrial use. 37. Methylated and denatured spirits and industrial alcohols 1.50% Class IX - Miscellaneous 86. Goods not included in any of the above items and not specifically exempted in Schedule II. 2.00% From 1983, the Rectified Spirit was being declared and accepted under Entry 37 collecting octroi duty @ 1.5%. The respondent by the letter dated 16.10.1986 retrospectively revised octroi duty stating that the goods were liable to octroi under Entry 7 in Class 1 of the Schedule. It was contended on behalf of the appellant that what was imported was Rectified S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d octroi duty was paid @ 1.5%. A notice was issued on 16.10.1986 by respondent claiming octroi duty @ 5% and demanding the difference of octroy duty @ 3.5% retrospectively. In an octroi statute, the incidence of tax can only be on goods actually brought into the local area for use directly i.e. if wine spirit, beer were brought in, the rate of tax would be 5% but if industrial alcohol was brought in, the rate of tax would be otherwise irrespective of the fact that such industrial alcohol was later converted by processing into potable liquor. In the case on hand, the Rectified Spirit brought into local area was not potable liquor and could not be used for food or drink directly. Further on every consignment brought in the local ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and not articles coming into being after further processing because the octroi duty is leviable on goods actually brought into the local area at that point for use directly. The High Court was also not right in saying that the Rectified Spirit is purified or refined liquor as it has to undergo certain processes including treatment with chemicals and redistillation to remove impurities before it can be treated as pure spirit. It may be stated that even the pure spirit has strength of about 90% v/v and in this form also it is not fit for human consumption. Class I of the Schedule speaks of articles used for food or drink by men or animals and drugs. Sprits included in Entry 7 of the said Class are included in the company of wine and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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