TaxTMI 
TaxTMI 
TaxTMI 
2018 (2) TMI 271
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....te Government. Previously, the retail dealers like the assessee used to deposit the cost price, excise duty, bottling charges etc in the Treasury against Form TR-7 in cash for getting supplies from the wholesale Licensee. Subsequently, the Excise Department by a notification dated 29.8.2005 changed the procedure. As per the revised procedure prescribed by the Excise Department, for lifting country spirit, the assessee, who is a retail vendor, was required to make the entire payment consisting of cost of the stock in trade, Excise duty and bottling charges etc only to the wholesale licensee appointed by the State Government. Following the revised procedure, the assessee made payments to M/s IFB Agro Industries Ltd towards purchases of country liquor. Against the aforesaid purchases, the assessee made payments in cash by depositing money directly to the bank account of the aforesaid company. The ld AO observed that the payment for purchase was exceeding Rs. 20,000/- resulting in violation of provisions of section 40A(3) of the Act and accordingly proceeded to disallow a sum of Rs. 1,20,06,656/- in the assessment. This disallowance was deleted by the ld CITA in first appeal. Aggrieved....
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....olesale:- Rules 1. Short Title and commencement.-(1) These rules may be called the West Bengal Excise (Supply of Country Spirit on Payment of Duty) Rules, 2005. (2) These rules shall come into force from 19th October, 2005. 2. Definitions.-(1) In these rules, unless there is anything repugnant in the subject or context- (i) "Commissioner" means the Excise Commissioner; (ii) "requisition" means the requisition submitted by the authorized representative of licensed wholesale vendor of country spirit in Form II appended to these rules; (iii) "retail vendor" means the person holding license in the prescribed form for retail vending of country spirit, granted by the Collector; 189; (iv) "State Government" means the Government of West Bengal; (v) "the Act" means the Bengal Excise Act, 1909 (Ben. Act V of 1909); (vi) "transport pass" means the transport pass issued in Form III appended to these rules; (vii) "warehouse" means the warehouse for supply of country spirit to retail vendors, established at convenient places by the Commissioner at the expense of the State Government, or at the expense of a person to whom the exclusive privilege of supplying or selling co....
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.... shall be paid by the retail vendor to the credit of the wholesale licensee concerned. (3) The authorized representative of the wholesale licensee shall realize the necessary amount of duty, cost price and bottling charge, if there be any, at the prescribed rate and such other imposition, as may be prescribed by law, from the retail vendor to whom country spirit is to be issued from the concerned warehouse. The authorized representative as above shall then submit requisition in duplicate in Form II appended to these rules to the Excise Officer-in-Charge of the warehouse separately for each of the retail vendors to whom country spirit is to be issued on the day. (4) On receipt of the requisition in Form II, the Excise Officer-in-Charge of the warehouse shall allow issue of country spirit from the warehouse. Duplicate copy of the requisition shall be returned to the authorized representative of the wholesale licensee after the issue has been made. (5) The Excise Officer-in-Charge of the warehouse shall issue transport pass to the retail vendor in Form III appended to these rules. (6) Notwithstanding anything contained in any provisions of the rules, orders and notificatio....
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.... impugned issue and ultimately held as below:- 21. We find that M/s Asansol Bottling & Packaging Co. Pvt Ltd is a bottling plant cum warehouse under Rule 2(vii) of The West Bengal Excise Rules 2005 with privilege granted u/s 22 of The Bengal Excise Act, 1909. At this juncture, it would be relevant to go into the definition of warehouse as provided under the State Excise Rules 2005 as below:- "Warehouse", under Rule 2(vii) of the W.B.Excise Rules 2005, means the warehouse for supply of country spirit to retail vendors, established at convenient places by the Commissioner at the expense of the State Government, or at the expense of a person to whom the exclusive privilege of supplying or selling country spirit by wholesale has been granted under section 22 of the Act, or of a licensed wholesale vendor of country spirit. The above definition makes it clear that the 'warehouse' referred to under the State Excise Rules is under the direct control and authority of the Commissioner of State Excise because it is established by the Commissioner of State Excise and as such is a State Government establishment. It is also pertinent to note that the expenditure in relation to such ware....
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....nt is made to the Government and, under the rules framed by it, such payment is required to be made in legal tender. In the instant case, the assessee (retail vendor) had made cash payments for purchase of country spirit by depositing cash directly into the bank account of M/s ABPL as per Rule 6(2) of the Excise Rules 2005, it has to be construed as payment made to the State Government authority and accordingly falls under the exception provided in Rule 6DD(b) of the IT Rules. 22. It is not in dispute that M/s Asansol Bottling & Packaging Co. Pvt Ltd have been granted licence to act as a wholesaler for supply of country liquor to the retail vendor as per the regulations of the Excise Department, Government of West Bengal. At the cost of repetition, we would like to state that the said regulation mandated the payments to be made directly into the bank account of the said wholesale licensee by the retail vendor (i.e assessee herein) for strict and effective regulation of the country liquor and for prevention of spurious stocks and black marketing transactions from the same. Hence it could be safely concluded that the said wholesale licensee had acted at the instance of the Stat....