Executive circulars cannot create excise duty liability without statutory backing for missing security holograms.

Excise duty or a duty-equivalent liability could not be imposed on distilleries for lost, wasted, or unverified security holograms through circulars or executive instructions alone. The statutory scheme required any fiscal levy to be authorised by the Uttar Pradesh Excise Act, 1910, or valid subordinate legislation, and regulatory directions could extend only to accounting, custody, and verification of holograms. Because no rule or notification authorised the charge during the relevant period, the attempted levy by departmental circulars was without statutory backing and invalid. Executive instructions could not create a presumption of misuse or impose duty, penalty, or liquidated damages outside the Act.

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Issues: Whether excise duty or a duty-equivalent liability could be imposed on distilleries for lost, wasted, or unverified security holograms through circulars and executive instructions in the absence of a notification, rule, or other statutory backing under the Uttar Pradesh Excise Act, 1910.

Analysis: The levy of excise duty falls within the statutory field and, in the scheme of the Act, duty had to be imposed and regulated in the manner provided by the statute. The circulars issued by the Excise Commissioner introduced a liability to pay excise duty or compensation measured by the duty on missing holograms, but during the relevant period there was no rule or notification authorising such a levy. Regulatory directions could be issued for accounting, custody, and verification of holograms, but an executive instruction could not create a presumption of misuse or impose a fiscal burden in the nature of duty, penalty, or liquidated damages. The power to levy or enlarge a tax liability could not be exercised dehors the Act or substituted by licence conditions or departmental circulars.

Conclusion: The levy based on the impugned circulars was held to be without statutory authority and therefore invalid; the challenge of the distilleries succeeded.

Ratio Decidendi: A fiscal levy or duty-equivalent liability cannot be created or enforced by executive circulars or administrative instructions unless the statute or valid subordinate legislation expressly authorises it.

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