TMI Blog1963 (10) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... d restricting the right of the petitioners to obtain power alcohol required by them for the purpose of their business. That contention on the Rules framed under the Power Alcohol Act is wholly unwarranted, and must be rejected. Appeal dismissed. - 348 of 1961 - - - Dated:- 24-10-1963 - P.B. Gajendragadkar, K. Subba Rao, K.N. Wanchoo, J.C. Shah and Raghubar Dayal, JJ. [Judgment per : J.C. Shah, J.]. - Messrs Industrial Chemical Corporation - petitioners herein - set up a business at Ghaziabad of manufacturing Nitrocellulose Thinners. On December 2, 1959, the petitioners obtained from the Assistant Collector, Central Excise, Meerut, a licence in Form L-6 under Rules 174 and 192 of the Central Excise Rules, 1944, for the period ending December 31, 1959, authorising them to obtain without payment of excise duty, power alcohol and toluene to be used by them in the manufacture of Thinners. This licence has been extended in favour of the petitioners by the Assistant Collector year after year. In reply to an order for the supply of 100 gallons of power alcohol, placed by the petitioners with the Central Distillery and Chemical Company Ltd., Meerut Cantt., a private distillery eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticle 19(1)(g) of the Constitution. This contention is, for reasons to be presently set out, wholly without substance. The relevant statutory provisions and rules framed thereunder which have a bearing on the plea raised by the petitioners may be briefly reviewed. 4.To consolidate and amend the law relating to central duties of excise on goods manufactured or produced in certain parts of India and to salt, the Central Legislature enacted the Central Excises and Salt Act I of 1944. By Section 2(d) of the Act the expression "excisable goods" means goods specified in the First Schedule as being subject to duty of excise and includes salt. Item 4 in the First Schedule is `Motor Spirit' which includes Power alcohol, "that is to say, ethyl alcohol of any grade (including such alcohol when denatured or otherwise treated), which by itself or in admixture with any other substance, is suitable for use as fuel for internal combustion engines". By Section 3 of the Act duty is leviable in such manner as may be prescribed on all excisable goods other than salt produced or manufactured in India. Section 6 authorises the Central Government to provide that no person shall from such date as may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pedient that the power alcohol industry should be developed under the control of the Central Government. The reason for assuming control over power alcohol industry was this : Prior to 1920 alcohol of strength higher than 95 per cent was obtainable in laboratories or in small scale plants at cost which rendered its use as fuel prohibitive. During World War II on account of great scarcity of motor fuel, necessity to tap indigenous sources for a substitute for petroleum was acutely felt. It was found that alcohol could be used as fuel for propelling heavy vehicles, but ordinarily fuel alcohol contained moisture which hindered satisfactory working of internal combustion engines. Diverse processes were devised for removing humidity and water, and the resultant product called commercial power alcohol with a strength of 99 per cent mixed with petroleum worked satisfactorily as motive power for automobiles. Several factories were soon set up in the Uttar Pradesh area, and to control manufacture and production of power alcohol, the U.P. Legislature enacted Act 10 of 1940. 8.The Central Government then enacted the Indian Power Alcohol Act XXII of 1948 with the objection of developing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mited quantities to a consumer direct from a distiller with the general or special permission of the Central Government or the Power Alcohol Authority of the State concerned on production or a treasury challan in support of pre-payment of Central Excise Duty and the sales tax (if imposed by the Government of the State concerned) or after adjustment of the amount due against on advance deposit by the distillery in any treasury approved for the purpose." It is clear from the provisions of the Indian Power Alcohol Act and the Rules framed under the Act that manufacture, production and disposal of power alcohol are controlled and regulated and that power alcohol may not be issued, stored, denatured or transported otherwise than as provided in Chapter IX of the Excise Manual, U.P. Vol. I, but limited quantities may be issued to consumers direct from a distillery under the general or special permission of the Central Government or the Power Alcohol Authority. Under Rule 2(q) of the Rules framed under the Indian Power Alcohol Act, the Excise Commissioner, U.P. has been appointed as the Power Alcohol Authority. 9.The licence in Form L-6 under the Central Excises and Salt Act, 1944, iss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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