J.M. Tendon, J. - (1.) THE petitioner Jagatjit Industries Limited, Jagatjit Nagar, District Kapurthala, own a distillery at Hamira, District Kapurthala, where Indian Made Foreign Liquor (hereinafter I.M.F.L.) including been is manufactured. Their products are exported to other States in India. On June 6, 1974, the Excise and Taxation Commissioner, Patiala (exercising the powers of Financial Commissioner under the Excise Act) addressed a letter (Annexure P. 4) to four parties, including the General Manager, M/s Jagatjit Industries Limited, Hamisa, and the Excise and Taxation Officer incharge of this distillery. This letter reads : - - Subject: - -Cancellation of bonds in form L -37/breakage and shortage of bottled liquor in transit Memorandum It has been noticed that generally heavy breakage/leakage is claimed by the distilleries on the quantities of Indian Made Foreign Spirit exported outside the Punjab State. It is a clear cut violation of the rules which also involves excise revenue. You should, therefore, ensure that breakage/leakage of Indian Made Foreign Spirit is reduced to the minimum permissible limit that is below 1/2 per cent.
(2.) THE Deputy Excise and taxation Commissioner vide his letter dated February 24, 1976, (Annexure P. 9) desired the factory Manager of Jagatjit Industries, Jagatjit Nagar (Hamira), to deposit the excise duty on excess wastage detailed therein The Excise and Taxation Officer wrote another letter dated January 30, 1976 (Annexure P. TO/A) to the Factory Manager, Hamira Distillery, stating that the verification certificate in form L -38 dated September 33, 1974, for the discharge of band in form L -37 executed by the, latter in respect Of the consignment of I.M.F.S. (L) exported to Messrs Coma Hotel, Limited, Khanpur Ahmedabad, had been examined and it had been found that the loss was more than the, prescribed limit of half per cent. Another similar letter (Annexure P. 10/B) of the same date from the Excise and Taxation officer, Hamira Distrillery, to the consignment of I.M.F.S. (L) exported to Messrs Darashaw Maneherji and Sons of Indore. The petitioner has challenged the orders of the Excise authorities charging duty on excess wastage of bottled liquor in excess of half per cent in pursuance of the letter annexure P.4 dated June 6, 1974. It has been prayed that the letter Annexure P. 4 of the Excise and Taxation Commissioner, Punjab (exercising the powers of Financial Commissioner) be quashed and demand notices issued to it in pursuance thereof be cancelled and the amount of excise duty already collected in terms thereof be refunded. It has further been prayed that the Excise authorities be directed to carry out the provisions of rule 16(iv), Chapter VII of the Punjab Excise Manual. The writ has been resisted by the respondents. The learned counsel for the petitioner has argued that the scale of wastage allowance per cent for spirit conveyed in wooden and metallic vessels is prescribed in rule 16 of the Punjab Liquor Permit and Pass Rules, 1932 (hereinafter the Rules). It is specifically provided under rule 16(iv) that no scale of wastage is prescribed for bottled spirit and breakages shall be satisfactorily explained in the remarks column of form L 38 under rule 16(ii). In the event of the deficiency in excess of the prescribed limit being not satisfactorily explained it is obligatory for the Collector to obtain the orders of the Financial Commissioner as to the portion of the total deficiency which is to be charged with duty the argument proceeds that; its no scale is prescribed for wastage allowance of bottled liquor, the Collector has unlimited power to allow wastage at all if not satisfied. He is to refer the matter to the Financial Commissioner under rule 16(ii) for orders if he is not Satisfied with the explanation given regarding the deficiency. The Excise and Taxation Commissioner, Punjab (exercising the powers of Financial Commissioner) in his letter (Annexure P. 4) addressed to the General Manager, Hamira Distellery and the Excise and Taxation Officer incharge of that distellery directed to limit the breakage/leakage of I.M.F.S. to half percent and this he could not do except by framing rules. This letter (Annexure P. 4) as also, the order passed by the Excise Authorities in pursuance thereof are bad and are liable to be quashed.
(3.) THE letter Annexure P. 4 dated June 6, 1974, has been addressed to Khasa Distillery and Hamira Distillery as also to the Excise and Taxation Officers incharge of these distilleries desiring them to ensure that the breakage/leakage of I.M.F.S. is reduced to the minimum permissible limit that is below 1/2 per cent. This letter is advisory in nature and does not per se affect the petitioner adversely.;