DOGRA DISTILLERIES Vs. STATE OF J&K

JUDGEMENT

(1.) AUDIT check indicating short payment of excise duty by M/s Dogra Distilleries during 1989 to 1994, resulted in issuance of a demand for Rs. 57,33,603.05 on M/S Dogra Distilleries, the petitioner, who, after objecting it before the Excise authorities, had come to this Court in OWP no. 893/1995 questioning the demand issued by the Excise Commissioner. This Court while disposing of the writ petition, had directed the respondents to review their demand.

(2.) ACTING on the instructions conveyed vide Excise Commissioner No. 68/Ex. Of 2000 dated 1.2.2000, Deputy Excise Commissioner (Distilleries) Jammu, issued a fresh demand vide his No.DECDJ/9679 -81 dated 29.3.2000 on the petitioner for payment of excise duty of Rs. 12,07,500/ - along with penal interest. The petitioner has filed this writ petition seeking quashing of Deputy Excise Commissioner (Distilleries) Jammus demand notice as also Rule 38 of the Jammu and Kashmir Distillery Rules on the basis whereof the demand is stated to have been raised.

(3.) RAISING a short but interesting question of law, the petitioner says that excise duty under the Jammu and Kashmir Excise Act, Svt.1958, can be levied in case of spirits either on the quantity, produced in the Distillery or passed out of the Distillery or Warehouse or exported from or imported into the State. According to it, no excise duty may be leviable under the Excise Act unless spirit is actually produced or passes out of the Distillery, meaning thereby that Excise duty on presumptive production of spirits is not chargeable under the Excise Act. The duty sought to be recovered by the respondents from the petitioner on the basis of the quantity of molasses received by it in its factory for the purpose of manufacture of spirits with the aid of Rule 38 of the Jammu and Kashmir Distillery Rules is impermissible.