Countervailing duty on imported liquor accrues at importation and remains part of taxable turnover despite deferred collection.

Countervailing duty on liquor imported into the State accrues on importation under the Andhra Pradesh Excise Act, 1968, even where collection is postponed until removal from a bonded warehouse. The bonded warehouse rules regulate only the time and mode of collection and do not alter the incidence of the duty. A purchaser's direct payment of the duty, or its omission from the sale bill, does not change the importer's statutory liability or exclude the duty component from the dealer's taxable turnover. On this reasoning, the duty continued to form part of the assessee's turnover and the challenge failed.

---

---

Issues: Whether countervailing duty on liquor imported into the State from outside, though payment is postponed until removal from a bonded warehouse and may be paid directly by the purchaser, forms part of the dealer's taxable turnover for sales tax purposes.

Analysis: Countervailing duty is intended to equalise the burden between liquor imported from outside the State and liquor manufactured within the State. The statutory scheme under the Andhra Pradesh Excise Act, 1968, and the rules made thereunder showed that liability to pay such duty accrues at the point of importation, even though collection may be deferred where the liquor is stored in a bonded warehouse. The rules governing bonded warehouses only regulate the time and mode of collection and do not alter the nature or incidence of the duty. An arrangement by which the purchaser pays the duty directly, and the omission of that amount from the sale bill, does not change the statutory liability of the importer or dealer.

Conclusion: Countervailing duty was held to accrue on importation and the amount paid by the purchaser did not cease to form part of the assessee's taxable turnover. The challenge failed.

Ratio Decidendi: Where a duty is statutorily imposed on the importer and its collection is merely postponed by the bonded warehouse regime, the taxable incidence remains at importation and private arrangements for direct payment do not displace the statutory liability or exclude the duty component from turnover.

---