Ashim Kumar Banerjee, J. - (1.) Under the Bengal Excise Act, 1909 (hereinafter referred to as the "said Act of 1909") The State is empowered, inter alia, to regulate manufacture and sale of liquor. Under Section 27 of the said Act of 1909 excise duty can be imposed on any excisable article under the Act as and when the same is manufactured and taken out from the manufactory for sale and/or consumption. Under Section 22 State Government is entitled to grant any person exclusive privilege for manufacture and sale of liquor on the terms and conditions mentioned in the license.
(2.) Appellant before us, a private warehouse was issued a license in Form 28A. Under the conditions of licence the appellant was given a special privilege to store foreign liquor in the said warehouse with the pre-condition that excise duty leviable on the said liquor might be paid at the time of sale of the liquor. By virtue of such privilege the appellant need not have to pay the excise duty and/or countervailing duty at the time of bottling and/or import and they were allowed to store foreign liquor without payment of duty under the said Act which was to be paid at the time of actual sale from the warehouse. For the purpose of regulating such collection of duty at the selling point the State was to maintain infrastructure at the warehouse itself by engaging supervisory staff. For that purpose State was entitled to impose fee in addition to the duty by way of reimbursement of the infrastructural costs. Such imposition of fee is permitted under Section 86 of the said Act and the rules made thereunder. Section 86(7) provides as follows : - "S.86. Further power of State Government to make rules. - The State Government may make rules - (7) for prescribing the scale of fees or the manner of fixing the fees payable in respect of any exclusive privilege granted under Section 22 or any license, permit or pass granted under this Act, or in respect of the storing of any intoxicant ;"
(3.) State by virtue of the power derived from Section 86 framed Rule in 1915 being the Bengal Excise Rules under Section 86. Rules 21 and 22 being relevant herein are quoted below : - "21. Private warehouses. - Persons desirous of obtaining licenses to establish private warehouses, for the deposit and storage of spirit other than country spirit without payment of duty or fee shall apply to the Collector concerned, who shall not grant the license without the previous order of the Commissioner. Rules 2 to 4 shall apply mutates mutandis to such applications, except that the amount of the security shall be Rs. 250. 22. Establishment for supervision of private warehouses. - The Collector shall employ such officers and establishment as the Commissioner may direct to the charge of a private warehouse. The licensee of the warehouse shall pay to Government. - (a) in advance a fee in cash equivalent to the estimated cost of such officers and establishment for three months as the Commissioner may fix, and (b) monthly a fee in cash equivalent to the monthly cost, which the Commissioner may fix, within seven days after the expiry of the month to which the fee relates. In computing the cost of officers and establishment, the average of the pay (including special pay, if any) of officers and establishment, the contribution towards leave salary and pension and the compensatory allowance shall be included.";