LIQUORS INDIA LIMITED Vs. GOVT OF ANDHRA PRADESH

JUDGEMENT

(1.) The petitioners in these three writ petitions are manufacturers of Indian Made Liquor (IML). The common point for our consideration in these petitions is whether the respondents are entitled to demand the licence fee at the rates specified in Rule 5(1)(b) of A.P. Distillery Rules, 1970 (for short 'the Rules') based on the actual production capacity of the petitioners manufacturing units, ignoring the quantity they were permitted to manufacture per annum as endorsed in Column (3) of the licence granted to them in Form D-2 or without making any endorsement in the licences issued to them as to the quantity they were permitted to manufacture per annum. In order to appreciate this point, it Would be useful to refer to the provisions of Rule 5 and Form D-2. Rule 5 as substituted by G.O.Ms. No.74, Revenue (E.III) Department dated 1-2-90 and published in A.P. Gazette dated 5-2-90 reads as under: "5 (1) Where the Commissioner is satisfied that the applicant has fulfilled the conditions specified in Rule 4, he may grant a licence to the applicant. Every licence granted under these rules shall be in Form D-2 and shall be issued in the name of the applicant and shall not be transferable. (a) The annual licence fee for D2 licence for manufacture of Rectified Spirit shall be paid as prescribed hereunder: <FRM>JUDGEMENT_193_ALT3_1998Html1.htm</FRM> Provided that in case of a new licence, the licence fee payable shall be limited to Rupees five thousand only till the manufacture commences. However, before commencing manufacture, licence fee as prescribed under Clauses (a) and (b) shall be paid proportionately for the remaining period of the licence year. (2) xxxxxxx (3) xxxxxxx". <FRM>JUDGEMENT_193_ALT3_1998Html2.htm</FRM>

(2.) It is significant to note that Rule 5(1)(a) which prescribes the annuallicence fee for manufacture of rectified spirit and Rule 5(1)(b) which prescribes the annual licence fee for manufacture of Indian Made Liquor refer to only the licenced capacity of production per annum. Likewise, Column (3) of Form D-2 licence also refers to only the quantity permitted for manufacture per annum. Thus, a combined reading of these provisions, in our considered view, leaves no doubt whatsoever that the annual licence fee is payable only on the licenced capacity of production per annum and the quantity permitted to be manufactured per annum by a particular manufacturing unit and it cannot be levied on the basis of actual production capacity of a unit.

(3.) Now, let us in brief refer to the facts of each case. In W.P.No.14913/95, the licenced capacity of production of the petitioner's unit was fixed at 9000 BLs per month i.e., 1,08,000/- BLs per annum for the excise years 1982-83 to 1993-94. The unit paid the licence fee at the rate of Rs.3,00,000/- per annum for the excise years 1989-90 to 1992-93; It may be stated here that we are not concerned with other excise years. There is no dispute that the petitioner paid the licence fee* for the excise years 1989-90 to 1992-93 at the rate prescribed under Rule 5(1)(b). Yet, the respondents raised a demand for Rs.28,00,000/- towards differential licence fee for the excise years 1989-90 to 1992-93 and Rs.5,65,000/- towards interest thereon on the ground that during the audit by the Accountant-General for the years 1991-92 and 1992-93, it was pointed out that the unit's actual production capacity was 26.33 lakhs PLs. The petitioner unit paid the amount demanded under protest and filed the writ petition for the refund of the same.