TMI Blog2003 (9) TMI 781X X X X Extracts X X X X X X X X Extracts X X X X ..... try liquor fixed with regard to their shops from the warehouse. Section 22A of the Bihar Excise Act confers power on the State Government to fix the cost price of country liquor includes the price of the spirit, transportation charges Warehouse maintenance charges, taxes, if any, and other charges such as bottling, packing etc. and dividend. The said power to exercised on behalf of the State Government by the Member, Board of Revenue. The retail vendor on the payment of fixed price of the country liquor obtains country liquor from the warehouse for the purpose of sale. Earlier sales tax was not imposed on the country liquor etc. The State Government by notification dated 21-5-1997 (Annexure 3) to the writ application) imposed sales tax at the rate of 25% on the country liquor at the first point of sale. The said notification was challenged before the Court by persons dealing in liquor but the said challenge was rejected by this Court. After issuance of the aforesaid notification the Commissioner with the approval of the Member, Board of Revenue vide order dated 11-2-1999 (Annexure 6-A) revised the wholesale price of the country liquor and included 25% excise duty in the total price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obligation to pay the excise duty is of the manufacturer and producer and even if the payment is made by any other person under the terms of the agreement the same will amount to meeting of the obligation of the manufacturer or the producer. If the payment is made by any other person not directly to the seller but to the Government the payment is made on behalf of the manufacturer or producer to the Government agency and the same would form part of the consideration money for sale of the country liquor. In support of his submission he relied upon judgments of the apex Court in the case of Mc Dowell Company Limited v. Commercial Tax Officer, reported in AIR 1986 Supreme Court 649, and in the case of Mohan Breweries Distilleries Ltd. v. Commercial Tax Officer, Madras and Ors., reported in (1997) 7 Supreme Court cases 542. 6. Before adverting to the submissions advanced at the bar it will be appropriate and apt to refer to the relevant provisions of the Bihar Excise Act and the Bihar Finance Act having a bearing on the question in controversy. 7. Excise duty has been defined under Section 2 (6) (a) of the Bihar Excise Act which means any such excise duty as has been mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying tax under the provisions of the Bihar Finance Act. 13. The taxing event in the case of excise duty is upon the goods manufactured or produced and as such exclusive liability is of the producer and manufacturer to pay the Excise duty. The collection may be deferred to a later stage on account of convenience, administrative ground or other grounds. Thus, even if the excise duty is paid in terms of the agreement or otherwise by any other person, such as retail vendor, it is really a payment on behalf of the manufacturer. The retailer pays the same in terms of the provisions of the Excise Act because the law says so. In terms of the provisions of the Act the retailer has to pay the cost or price which includes the sacheting price and the excise duty before the takes delivery of the liquor from the warehouse. Thus, the total amount charged from him is a consideration for the sale of the liquor and is included within the definition of the turn over as stated above. The fact that the payment of excise duty is not made directly to the manufacturer or wholesaler and is paid in Government Treasury does not mean that the same does not constitute a part of gross turn over. 14. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Dealing with the aforesaid matter, the apex Court held that the liability to pay the excise duty is of the manufacturer or producer and the collection may be deferred to a later stage on administrative or other grounds and Rule 22 provides for a convenient method of its collection. Though the payment is made by a person other than the manufacturer the payment is made in discharge of the obligation of the manufacturer. The payment of sale price to the manufacturer and payment of excise duty into the Treasury on behalf of the manufacturer does not exclude the excise duty from the consideration for sale. In this connection the element of excise duty does includes the turn over of the manufacturer just as much as it would ordinarily do. The definition of the turnover under the provisions of the Sales Tax is wide enough to cover the excise duty. In this connection, it is relevant to refer to para 11 of the judgment which runs as follows: As we look at it, the primary obligation to pay excise duty on the IMFL is of the manufacturer thereof. Rule 22 only provides for a convenient method for its collection. When the excise duty is collected from a party removing the IMFL from the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come tax under Section 206-C of the Income Tax Act is to be paid by the retail vendor only on the amount paid as cost price or it also includes the price. Mc Dowell's case (supra) was also referred to in the said case and that was distinguished on the ground that under the provisions of the Bihar- Excise Act, the obligation to pay the excise duty is on the retail vendor and as such the case is covered by earlier Mc Dowell Co. Ltd. v. Commercial Tax Officer, (1977) 39 STC 151. It was also held in that case as it appears from paragraph 52 of the judgment that excise duty payable by the retailer is not the excise duty which is payable by the manufacturer or contractors etc. The view taken in that case, if I may say with respect, ignored the fact that excise duty is payable by a manufacturer or producer and not by others. The payment by retail vendors is not the payment of excise duty on their behalf but it is a payment made by them for and on behalf of the manufacturer, therefore, it is included as a part of consideration for sale of the liquor as held in the case of Mc Dowell (supra) and Mohan Breweries Distilleries Ltd. (supra). It may also be appreciated that without paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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