STATE OF U P Vs. SARAYA INDUSTRIES LTD

JUDGEMENT

(1.) Leave granted.

(2.) The respondents herein are owners of distilleries. Right to manufacture various categories of Indian Made Foreign Liquor within the meaning of the provisions of the Uttar Pradesh Excise Act, 1910, as amended in 1950, (for short, the Act) has been granted to them by the State of Uttar Pradesh. They have been granted licence for manufacturing potable liquor. They indisputably have been paying excise duty in terms of the provisions of the Act.

(3.) The State of Uttar Pradesh on or about 3-2-2001 allegedly adopted a policy decision for the excise year 2001-02 which commenced from 1-4-2001 to the effect that the distilleries had to obtain and affix security holograms issued by the department to prevent evasion of duty and smuggling of liquor. The Excise Commissioner issued a circular on 21-2-2001 providing that every distillery would receive holograms from his office, wherefor plants had been established. Another circular letter was issued on 24-3-2001 directing that holograms on bottles, pouches and canes would be affixed by the distilleries. The excise duty was payable on the bottles, pouches and canes etc. on which holograms had been affixed. Different kinds of holograms had been provided for different sizes of bottles/pouches, for different quantities and qualities of liquor. Procedures to be followed for obtaining the said holograms, transporting etc. thereof by the distilleries were also provided. It was provided that the distilleries would be entitled to receive holograms from the incharge excise inspector on day- to-day basis and a register was required to be maintained as regards the stock of the holograms issued, the number of holograms wasted and the closing stock thereof. The excise duty was to be deposited before issuance of bottles, pouches and canes affixed with holograms. Furthermore, the excise duty was to be chargeable on the wasted holograms, which would be destroyed under the orders of the Excise Commissioner.