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1979 (3) TMI 213

Appellant : S.K. Suri, Adv. For the Respondents : Standing Counsel JUDGMENT C.S.P. Singh, J. 1. These cases are being disposed of by a common judgment as they raise a common question of law, and the essential facts are the same. For the purposes of deciding controversy that has arisen between the parties, it will be sufficient to state the facts in Writ Petition No. 2603 of 1973. 2. The petitioner, a Limited Company holds a licence in Form P. D. 1 for the manufacture of Indian made foreign liquor. The petitioner also holds licence in Form F. L. 3-A for bottling of Rum. Rum, that is bottled by the petitioner, is supplied to Military Troops exclusively. The process for bottling consists of transferring liquor from vats, which are in a bonded .....

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for payment of excise duty as soon as Rum is manufactured by him, the demand would be justified. In case, however, duty is payable only on issue of the manufactured commodity, the petitioner will not be liable. The question as to whether under the U. P. Excise Act duty is chargeable at the stage of manufacture or at the point of issue, has been considered in the case of Mohan Meakin Breweries Ltd., Ghaziabad (this very petitioner) v. State of U. P. in Civil Misc. Writ Petn. No. 839 of 1975, decided on April 27, 1978, reported in 1978 All LR 534: 1978 Tax LR NOC 107 . After considering the various decisions of the Supreme Court, the provisions of the Act, the Excise Manual, and the departmental practice, this Court held (i) that excise duty .....

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for sale, as is the case here, the rate of duty is one, which is in force on the date when the article is issued from the warehouse. Thus, the rate of duty is linked in point of time to the date of issue for sale and not to the date of manufacture. Further, as has been noticed in the earlier decision, the rate of duty on Rum varies with the place to which it is issued, and thus, whatever be the maximum rate of duty prescribed in Section 28 (3), duty can be charged only on the amount issued, at the rates appropriate for the destination where the articles are sent. The second being that by various notifications issued by the State Government, viz., Notifications Nos. 1130 E/XIII-328/ 1962, 7901 E/XIII-337-74 of November 20, 1974, 6628 E/XIII- .....

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This apart, the licence clause is ineffective, as Section 28 and Section 29 and the duty Notifications issued under the Act clearly indicate that duty is to be charged only at point of issue and the rate fixed with reference to the destination. 5. It is, thus, clear that the impugned levy cannot be sustained in all these petitions. In Special Appeal No. 79 of 1978 the matter has been remanded to the Excise Commissioner for considering the claim of the petitioner for being exonerated from payment of excise duty. However, on the view taken by us that excise duty is not payable on bottling wastage, no useful purpose would be served by asking the Commissioner to reconsider the matter. 6. The petitions and the special appeal are allowed, and the .....

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