ICEBERG INDUSTRIES LIMITED Vs. STATE OF BIHAR

JUDGEMENT

(1.) IN terms of sub -section (6) of Section 2 of Bihar Excise Act, 1915 "excisable articles" means (a) any alcoholic liquor for human consumption; or (b) any intoxicating drug. Section 27 of the Act empowers the State Government to impose excise duty or a contraveiling duty on any excisable article manufactured in any distillery or brewery licensed, established, authorized or continued under the Act. Section 28 of the Act provides the ways of levying such duties. It provides, subject to the Rules made under Section 90 clause (12) of the Act, duty imposed under Section 27 may be levied on spirit or beer manufactured in any distillery or brewery licensed, established, authorized or continued under the Act by a rate charged upon the quantity produced in or issued from the distillery or brewery, as the case may be, or issued for the from warehouse established, authorized or continued under the Act. There are, therefore, three ways of levying duty on beer manufactured in any licensed distillery or brewery. First of that is upon the quantity produced in such distillery or brewery. The second is upon the quantity issued from such distillery or brewery. The third is upon the quantity issued for sale from a warehouse established, authorized or continued under the Act. Which way or ways or mode or modes would be adopted for levying such duty had been left by the Legislature upon the Board by making the provisions contained in Section 28 of the Act subject to any Rules made under Section 90 clause (12), which in turns authorizes the Board to make Rules for prescribing a time, place and manner of levying duty on intoxicant. In exercise of such power the Board framed Rules and in Rule 147 has provided that duty imposed on foreign Siquor manufactured in a distillery, and stored in a distillery or excise warehouse shall be paid before removal from the distillery or excise warehouse unless a bond has been executed for such purpose: By making the said Rule the Board has adopted the second and third options given by the Legislature for levying duty.

(2.) PETITIONER is a licensed manufacturer of beer. In addition to obtaining license to manufacture beer it has obtained a license under Form No. 19B to have an excise warehouse. In terms of the provision contained in the said license petitioner is entitled to remove manufactured beer to the said warehouse without payment of duty. It is, however, in terms of the provisions contained in the said license, obliged to pay duty at the time of removal of beer from the warehouse, other than under a bond issued before. In addition to that the petitioner is also liable to pay duty upon all wastages. The moment petitioner removes any beer stored at the said warehouse for consumption within the State, it is required to pay duty on such removed beer. In the event petitioner removes any beer from the said warehouse for being sold outside the State, it would be required to give bond before hand and then it can remove such beer for the purpose of selling the same outside the State of Bihar. Petitioner manufactured beer, sold a part thereof, but could not sell the remaining for various reasons, which remained in the said warehouse. Petitioner approached the Commissioner for permitting it to re -process the unsold beer which still remained in the said warehouse. Commissioner felt re -processing of beer is not viable, on the basis of opinion of the Chemist, and directed destruction of the same.

(3.) RULES 86 to 91 of the Rules made by the State Government in exercise of its power under the Act provides for method to be adopted in relation to spoilt beer. Rule 86 provides that a written application must be made to the Collector for allowance for spoilt beer. Rule 87 provides that there must be satisfactory evidence to enable the Collector to decide whether the beer can be identified with its proper brewing subject to Rules 88 to 91 and if he is satisfied on this point he will sanction destruction of the beer in presence of an Officer. Rule 88 provides that the brewer must sign a declaration that the beer was brewed by him and has never left his premises and that no part of it consists of "bottoms" or "returns" from vendors or other customers. Rule 89 provides that representative samples must be taken and sent to such laboratory as the Commissioner may decide. Rule 90 provides that the Officer must state the means by which he checked the bulk quantity, and after samples have been taken as aforesaid, he must witness destruction of the beer and record a note of the fact in the brewing book. Rule 91 provides that on receipt of a satisfactory report from the laboratory, the brewer may be credited with the proper amount of duty.