Establishment charge under Bihar Excise Rules cannot extend beyond the licence class or staff actually covered by the rule.

Establishment charge under Rule 9 of the Bihar Excise Rules could not be levied on composite licensees holding licences for manufacture of potable liquor along with denatured spirit or other commercial spirit, because the proviso was confined to distilleries licensed solely and wholly for non-potable spirit; the demand was therefore unsustainable in the covered cases. Under Rule 36A, recovery was limited to the actual cost of excise staff deployed for proper supervision and could not extend to all employees in the distillery; because the impugned notices did not identify staff exclusively engaged for the relevant functions, the demands were quashed and the matter remitted for fresh, limited assessment.

---

---

Issues: (i) Whether establishment charge could be demanded under Rule 9 of the Bihar Excise Rules from licensees holding composite licences for manufacture of potable liquor along with denatured spirit or other commercial spirit; (ii) Whether, under Rule 36A of the Bihar Excise Rules, establishment charge could be levied for all employees in the distillery or only for excise staff solely engaged in compounding, blending and allied operations.

Issue (i): Whether establishment charge could be demanded under Rule 9 of the Bihar Excise Rules from licensees holding composite licences for manufacture of potable liquor along with denatured spirit or other commercial spirit.

Analysis: Rule 9 had already been held to be intra vires and referable to the enabling provisions of the Bihar Excise Act, but its proviso was confined to distilleries licensed solely and wholly for manufacture of denatured spirit or other commercial spirit unfit for human consumption. Where the licence was composite and included manufacture of potable liquor fit for human consumption, the proviso could not be invoked to levy establishment charge.

Conclusion: The demand of establishment charge under Rule 9 was not sustainable against composite licensees and was quashed in the covered cases.

Issue (ii): Whether, under Rule 36A of the Bihar Excise Rules, establishment charge could be levied for all employees in the distillery or only for excise staff solely engaged in compounding, blending and allied operations.

Analysis: Rule 36A authorised recovery of actual cost of excise staff deployed for proper supervision, and the charge could not be expanded to cover every employee in the distillery. The levy was justified only to the extent of staff actually and exclusively engaged for the relevant supervisory or operational functions. Since the demand notices did not make that distinction clear, fresh determination was necessary.

Conclusion: The impugned demands under Rule 36A were quashed and the authority was directed to determine afresh the number of excise staff exclusively engaged for the relevant purpose and issue a fresh demand.

Final Conclusion: The writ petitions succeeded to the extent that the impugned establishment-charge demands were set aside, while the authorities were left free to make a fresh, limited assessment consistent with the governing rules.

Ratio Decidendi: Establishment charge may be levied only within the confines of the enabling rule and only for the class of distilleries or staff to which the rule is specifically applicable; it cannot be extended to composite licensees or to personnel not exclusively covered by the rule.

---