C.S.P.SINGH,J. - (1.) THESE petitions are inter connected and may be conveniently disposed of by a single judgment. The facts are similar.
(2.) THE petitioner company is a licensed distillary. The process of manu ­facture of spirit is as hereinafter described. From the distillation plant, the spirit is transmitted by pipes to the receiving vat. Thereafter, it goes to the storage vat. Subsequently, it is piped to the reduction and blending vats. After spirit has been reduced and blended it is piped to the issue vats. 1 he petitioner have a bottling bounded warehouse and the spirit in piped to the bottling tank from the issue vats. It is common ground that the entire operation is checked by the officers of Excise Department. The spirit that is collected in the issue vat is measured and gauged and its strength determined by officers of Excise Department. When the spirit in receiving in the bottling tank, it is again measured. During the transmission of the spirit from the distillation plant to the issue vats through pipes, a certain amount of wastage occurs for which the petitioner are granted an allowance under the rules. During the process of piping, the finished product, from the issue vats to the bottling tank, there is no shortfall in the quantity of the spirit, which is not attributable to any act on the part of the petitioner. After the spirit is received in the bottling tank, it is bottled and issued for sale. The dispute has arisen between the parties as to the chargeability of excise duty on the shortfall in the spirit received in the bottling tank. The petitioner claim that it is a transit loss, and they are entitled to a reduction in the excise duty in accordance with paragraph 814 of the Excise Manual. It has also been contended that under the scheme of the U.P. Excise Act and the Rules and the practice adopted by the Excise Department, excise duty is chargeable only on issue of the spirit and not on the quantity manufactured.
(3.) WE will consider the question as to whether the petitioners are entitled to a reduction in the excise duty under paragraph 814 of the Excise Manual. When the spirit is piped from the issue vat to the bottling tank, a pass in Form P.D. 25 is issued under paragraph 787 of the Excise Manual. This paragraph runs as under: - "No spirit shall be removed except under a pass granted by the officer empowered in this behalf." ;