- (1.) This writ petition has been preferred with a prayer to declare the Rule 106 (tha) of the Rules framed by the Board of Revenue contained in the notification dated 10thth November 2012 in exercise of powers conferred under section 90 of the Jharkhand Excise Act, 1915 as ultra vires being beyond the rule making power of the Board of Revenue under Articles 265 of the Constitution of India read with Entry-8 and Entry 51 of List-II in the Seventh Schedule of the Constitution of India. By the said rule, it has been directed that a sum of Rs. 6.00 per LP Litre shall be levied as import fees on import of rectified spirit imported firstly for manufacture of Extra Neutral Alcohol (ENA) through re-distillation process and then for manufacture of Indian made foreign liquor ( IMFL). The petitioner has also prayed for quashing of the demand notice dated 24thth November 2012 (Annexure-4) by which it has been directed to deposit import fees amounting to Rs. 8,29,911.60 on rectified spirit import and stored at distillery prior to 10thth November 2012. Consequential prayer has also been made for refund of the import fees as also restraining the respondents from taking any action for realization of the import fees @ Rs. 6.00 per LP Litre on rectified spirit imported for the purposes of manufacture of ENA for its further conversion and manufacture of foreign liquor.
(2.) According to the petitioner, it is a company incorporated under the provisions of Companies Act, 1956 and it is engaged in the manufacture of Extra Neutral Alcohol (ENA) through re-distillation process and denatured spirit from rectified spirit and Indian made foreign liquor (hereinafter to be referred as 'IMFL) from ENA under a licence granted by Excise Department, Government of Jharkhand in Form-19, 19(B), 20, 25 and 28(A) prescribed by the Board of Revenue under section 38 of the Excise Act, 1915. Copies of the licence are enclosed as Annexure-1 series. It is the case of the petitioner that denatured spirit and IMFL so manufactured is sold in the State and outside on payment of applicable excise duty, VAT as per the rates prescribed. For the purpose of manufacture and sale of IMFL, the petitioner either imports rectified spirit which is converted into ENA after undertaking the due process of manufacture or directly imports ENA from other distilleries. Both raw materials i.e. the rectified spirit and ENA are the spirit of over proof strength and are non-potable liquor. The rectified spirit received from other distilleries is meant to undergo the process of re-distillation under licence granted in Form-28A which is licence for manufacture of spirit for use in the manufacture of potable liquor from which ENA is manufactured. After ENA is manufactured, it is compounded and blended for manufacture of IMFL. The aforesaid activities of compounding and blending are undertaken under the cover of licence in Form-19 of the Act in terms of rule 34 of the Rules. After ENA undergoes the process of compounding and blending, IMFL is manufactured which is bottled under the cover of licence in Form-20 of the Act. After the IMFL is bottled, it is kept in store room under double lock, one of the keys is kept in the custody of the Excise Officer posted at the distillery. The quantity of IMFL kept in the store room is under bond meaning thereby that no duty is paid on the same and a bond is executed by the petitioner for such amount as fixed by the Excise Commissioner. For the aforesaid purposes, petitioner holds licence in Form-19B which is a licence to deposit or keep IMFL so manufactured in a warehouse under bond. After pre-payment of duty and other applicable fees like export pass fee, etc., IMFL is transferred to another warehouse in Form-19C of the Act which licence is not held by the petitioner but it is held by the brand owner of the IMFL. Certain quantity of rectified spirit received from distilleries is denatured and rendered permanently unfit for human consumption and sold for industrial use under the licence held in Form-25. Thus, according to the petitioner, it is the holder of composite licence i.e. licence for manufacture of ENA and denatured spirit which is unfit for human consumption and IMFL which is potable liquor.
(3.) Learned counsel appearing on behalf of the petitioner, has submitted that the Act of 1915 is a pre-Constitution Act enacted in the province of Bihar & Orissa relating to import, export, transport, manufacture, possession and sale of certain kinds of liquor and intoxicating drugs. The Act of 1915 has also been adopted by the State of Jharkhand after bifurcation of the parent State of Bihar. Section 2(6a) provides for excisable article which means (a) alcoholic liquor for human consumption or (b) for intoxicating drugs. Sub-c provides for excise duty and countervailing duty which means any such excise duty or countervailing duty, as the case may be, as is mentioned in Entry 51 of List II in the Seventh Schedule of the Constitution. In order to advance his submission, learned counsel for the petitioner has referred to the definitions of excisable article under section 2(6), excise duty and countervailing duty under section 2(6a), excise revenue under section 2(9), definition of import, intoxicant liquor, spirit, manufacture as defined under different sub-section of section-2. For better appreciation, definitions of the aforesaid relevant expressions referred to above, are quoted hereunder. "2. Definitions.- In this Act, unless there is anything repugnant in the subject or context.- (6)"excisable article" means- (a) any alcoholic liquor for human consumption; or (b) any intoxicating drug; (6a) "excise duty" and "countervailing duty" means any such excise duty, or countervailing duty, as the case may be, as is mentioned in Entry 51 of List II in the Seventh Schedule of the Constitution; (9) "Excise-revenue" means revenue derived or derivable from any duty, fee, tax, payment (other than a fine imposed by a Criminal Court) or confiscation imposed or ordered under this Act or any other law for the time being in force relating to liquor or intoxicating drugs; (12) "import" except the phrase "import into India" means to bring into the State otherwise than across a customs frontier as defined by Central Government; (12a) "intoxicant" means- (i) any liquor, or (ii) any substance from which liquor may be distilled and which is declared by the State Government by notification in the official Gazettee to be an intoxicant for the purpose of this Act, or (iii) intoxicating drug, or (iv) medicinal preparation as defined under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. (14) "Liquor" includes all liquids consisting of or containing alcohol, such as spirits of wine, spirit, wine, fermented tari, pachwai and bear, and also unfermented tari, and also any other substance which the State Government may, by notification, declare to be liquor for the purposes of this Act; (15) "manufacture" includes- (i) every process, whether natural or artificial, by which any intoxicant is produced or prepared (including the tapping of tari-producing trees and the drawing of tari from trees), (ii) redistillation, (iii) every process for the rectification, flavouring, blending or colouring of liquor, or for the reduction of liquor for sale; (19) "spirit" means any liquor containing alcohol obtained by distillation whether it is denatured or not;;