TaxTMI 
TaxTMI 
2023 (1) TMI 635
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....(b) commanding upon the respondents to refund the amount paid as import and countervailing duties on the stock to the tune of Rs. 1,53,68,480/-, as demanded by the petitioner, inter-alia, in its letter dated 28.11.2020 (Annexure-7 series). 2. Case of the petitioner, as per the submission of the learned counsel for the petitioner and borne from the pleadings on record are as under: Petitioner is a manufacturer and supplier of alcoholic liquor and inter-alia supplies beer in the State of Jharkhand. Respondent Nos. 1 and 2 are the State of Jharkhand and its functionaries. Respondent Nos. 3 and 4 are the Jharkhand State Beverages Corporation Ltd. and its Managing Director respectively. Respondent No. 3 holds the monopoly for supply of wholesale liquor in the State of Jharkhand. For the purpose of supply of beer, petitioner entered into a supply agreement with the Respondent No. 3 on 01.04.2019 (Annexure-2). Vide Annexure-4 dated 15.10.2019 in a meeting with Respondent No. 3, it was decided to increase the supply of beer in the State of Jharkhand so as to avoid the shortage as was noticed in the previous summer season. Accordingly, the petitioner commenced its supplies of be....
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....s levied under the Jharkhand Excise Act, 1915 (in short "the Act") and the sale of liquor in the state of Jharkhand is regulated under the Act. No liquor can be brought into the state of Jharkhand without payment of duties as per the restrictions imposed under the provisions of Chapter III of the Act. Section 15 of the Act provides for establishment of warehouses where any intoxicant may be deposited and kept without the payment of duty. Under section 17 of the Act, it is provided that no intoxicant may be removed from any brewery or distillery or warehouse or any other place of storage unless duty payable under Chapter V of the Act has been paid or a bond has been executed for the payment thereof. Under Chapter V of the Act, duties are leviable on intoxicants. Section 27 authorizes the State to impose any excise duty or CVD on any excisable item imported in the State of Jharkhand. Section 28 provides for the way of levying duty and the relevant part of Section 28 is reproduced herein: 28. Ways of levying such duty. - Subject to any rules made under Section 60, Clause (12), any duty imposed under Section 27 may be levied in any of the following ways.- (a)....
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....bsequent to such import shall be realized from, or credited to the account of the importing on transporting licence according to the revised rate of duty which may be higher or lower than the previous rate and the calculation thereof shall be made on the balance stock of excisable article on the date the revised rate of duty comes into effect:] Provided also that no tax shall be levied in respect of any tree from which tari is drawn only for the manufacture of gur or molasses and under such special conditions as the Board may prescribe." (Emphasis supplied) 5. Section 28 (1) (a) (ii), which applies to the present case, clearly provides that the event of charge of duty applies only on the removal of goods from the warehouse. The first proviso to Section 28 provides that the rate applicable shall be the rate in force on the date of issue of such article from the warehouse. The second proviso to Section 28 provides for the adjustment of duties which would have been paid in advance and provides for the payment or refund of differential duty, if any, on account of difference in the rate of duty on the date of payment and the date of issuance of the goods from the warehouse. ....
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....territory of Jharkhand does not complete the taxable event but merely commences it. The taxable event ends only on clearance of the goods from the warehouse. 7. It is further submitted that the CVD is leviable only on removal of the goods from the warehouse. A cumulative reading of Section 17 and Section 28 of the Act would clearly demonstrate that CVD is levied only when the goods are removed from the warehouse. Until the removal of goods, any payment is only an advance and the final duty is determinable only on removal. The second proviso to Section 28 which provides for adjustment of the actual duty payable on the basis of the rate of duty applicable on the date of removal, is a clear indication that the levy is applicable only on the removal of goods from the warehouse and not prior to that. When the provisions of the statute provide for the applicability of a rate of duty on a particular event, that event is the material taxable event and no duty can be lawfully imposed prior to that event taking place. Learned counsel for the petitioner has placed reliance on the judgment in the case of Sree Balaji Enterprises, Bangalore versus Excise Commissioner in Karnataka, Bangalore a....
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....t of the action of the State is arbitrary and illegal. The levy and collection of duty on such stock is arbitrary and is in contravention to Article 14 of Constitution of India and amounts to the State attempting to unjustly enriching itself at the cost of the petitioner which ought not to be permitted. Learned counsel for the petitioner submits that no duty can be charged on alcohol unfit for consumption. The Act has been legislated pursuant to the power granted under Entry 51, List II, Seventh Schedule of the Constitution of India which permits levy of excise and countervailing duties on "alcoholic liquors for human consumption". In the facts of the present case, Respondents are seeking to effectively charge CVD on alcohol which was not fit for human consumption. It is further submitted that the refund is available if duty is collected without authority of law. If any amount has been paid to the State and there is no liability under the Act, the retention of the said amount by the State would be in contravention of Article 265 of the Constitution of India. In support of the aforesaid contention, he has relied upon the judgment rendered by this court in the case of M/s WS Retail S....
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....ly misunderstood the very basis of levy of countervailing duty. Countervailing duty by its very nature, is not dependent on whether the goods were sold / removed for sale / consumed / destroyed etc. Rather, countervailing duty is leviable by the very factum of import, without anything else. Thus, the incidence of levy of countervailing duty is the import of the alcohol itself. 12. To fortify the above, it is relevant to refer to Entry 51 of List II of the Seventh Schedule of the Constitution of India which authorizes the State to make laws with respect to - Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India: (f) alcoholic liquors for human consumption: alcoholic liquors for human consumption: 13. Under the aegis of the said entry, the Bihar and Orissa Excise Act, 1915 (as adopted in the State of Jharkhand) ("the Act") is a valid piece of legislation. Section 2(6a) defines excise duty and countervailing duty, as any such excise duty and countervailing duty mentioned in Entry 51 of List II of the Seventh Schedule to the C....
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....ilar goods if manufactured within the State. So far as countervailing duty is concerned, the incidence of the impost is on the import of the excisable articles, i.e., at the time of entry into the State. 16. It was thereafter held that facility for postponement of payment of tax, can, in no manner, affect the incidence of duty on imported goods since collection and levy are different concepts. It was thus held that - "7. In this view of the matter, the demand of countervailing duty from the appellant in the established facts and circumstances of the case was perfectly justified. The fact that the liquor was rendered unfit for human consumption and destroyed after its import, which by itself attracted the levy of duty could not wipe off the liability of the appellant for payment of duty on the excisable goods, after their import, in the bonded warehouse. The Full Bench of the High Court was, therefore, perfectly justified in finding that the challenge to the demand made by the appellant had no merits. This appeal has no merits. It, accordingly, fails and is dismissed but with no order as to costs." In M/s. Mohan Meakin Breweries Ltd. versus. Excise and Taxation Comnr.....
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....thers [(2007) SCC Online Kar 16], the dispute was whether excise duty (i.e. goods manufactured inside the State) would be levied when goods are destroyed. In the said case, as per the prevalent rules, charging section for levy of excise duty is made operative only upon issue from any distillery. In the present case however, the Act is clear that CVD is levied at the time of import itself and is payable normally upon import. Only a facility for postponement of collection is provided. In any event, CVD is different to excise duty and cannot be equated with excise duty. Further, the judgments relied upon by the Respondents do not find reference in this particular judgment. The judgment rendered by this Court in the case of M/s WS Retail Services Pvt. Ltd. versus The State of Jharkhand and others [W.P (T) No. 2429/2018] was in the context of JVAT Act inter-alia holding that claim for refund would be maintainable even if there is no provision under the JVAT Act. The same is clearly inapplicable for the reason that the petitioner is not entitled to any refund in this case, since it is their liability to pay countervailing duty at the time of import. 17. Another contention raised by th....
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....e above rules, it is borne out that a manufacturer outside the State, must necessarily obtain a distributorship license in Form 19C and on obtaining such license, he can only sell to the wholesaler. In fact, the person who obtains a licensee in Form 19C, must be a manufacturer / distributor. Further, under the license, as also under Rule 7(3), import can be done only on payment of countervailing duty and on obtaining an import permit. It is thus evident that a manufacturer outside the state, can only sell to a wholesaler inside the State by obtaining a distributor licensee and for this purpose, he will have to import the goods on payment of countervailing duty. It is thus the liability of the manufacturer as an importer to pay countervailing duty for subsequent sale to the wholesaler. The import permit issued for the relevant period under consideration itself states that "PASS FOR THE IMPORT FROM THE PROVINCE OF FOREIGN/COUNTRY/COUNTRY/SPICED COUNTRY LIQUOR MADE IN INDIA OR OF RECTIFIED SPIRIT ON WHICH DUTY HAS BEEN PAID". The dealer to whom the permit is issued, name of the consignor and the name of consignee, all reflects the name of the petitioner. It is thus evident that the pe....
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....ty or countervailing duty, as the case may be; as it is mentioned in Entry 51 of List II in the seventh Schedule of the Constitution". (12) "import" except the phrase "import into India" means to bring into the State otherwise than across a customs frontier as defined by Central Government; CHAPTER III IMPORT, EXPORT AND TRANSPORT 9. Restrictions on import (1) No intoxicant shall be imported unless - (a) the State Government has given permission, either general or special, for its import; (b) such conditions (if any) as the State Government may impose have been satisfied; and (c) the duty (if any) payable under Chapter V has been paid or a bond has been executed for the payment thereof. 2. .................. 3. .................. 12. Passes for import, export and transport (1) No intoxicant exceeding such quantity as the State Government may prescribe by notification, either generally or for any specified local area, shall be imported, exported or transported, except under a pass; Provided that in the case of duty-paid foreign liquor other than denatured spirit, such passes shall be d....
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....able article exported- by payment in the State or in the State or territory to which the article is sent; (h) on an excisable article transported - (iii) by payment in the district from which the article is sent, or (iv) by payment upon issue for sale from a warehouse established, authorised or continued under this Act; (i) on intoxicating drugs manufactured, cultivated or collected - (iii) by a rate charged upon the quantity manufactured under a licence granted in respect of the provisions of Section 13, Clause (a), or issued for sale from a warehouse established, authorised or continued under this Act, or (iv) by a rate assessed on the area covered by, or on the quantity or outturn of, the crop cultivated or collected under a licence granted in respect of the provisions of Section. 13 Clause (b) or Clause (c); (j) on spirit or beer manufactured in any distillery or brewery licenced, established, authorised or continued under this Act.- (iii) by a rate charged upon the quantity produced in or issued from the distillery or brewery, as the case may be, or issued for sale from a Warehouse established, au....
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....e State Government may make rules- (a) for prescribing the powers and duties of Officers of the Excise Department; (b) for regulating the delegations of any powers by the Board, the Commissioner of a Division, the Excise Commissioner or Collectors under Section 7, clause (g); (c) for declaring in what cases or classes of cases and to what authorities appeal shall lie from orders, whether original or appellate, passed under this Act or under any rule made hereunder, and for prescribing the time and manner for presenting and the procedure for dealing with appeals; (d) for regulating the import, export or transport or any intoxicant; (e) for regulating the periods for which licences for the wholesale or retail vend of any intoxicant may be granted, and the number of such licences which may be granted for any local area; (f) for prohibiting the grant of licence for the retail sale of any intoxicant at any place or within any local area described in the rules or for defining the places in the vicinity of which shops for the retail sale of any intoxicant shall not ordinarily be licenced. (g) for prohibiting the grant to speci....
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....ditions have been satisfied:- (i) the importer has obeyed all rules in force in the district or place from which the liquor is brought; (ii) the Chief Revenue Authority of such district or place or the officer in charge of the distillery, brewery or warehouse from which it was taken has made endorsement on the pass, granted by the Collector of the importing district or place, and also on a copy thereof sent to him by the Collector of the importing district or place, or has himself issued an export pass in such form as may be prescribed for use in the district or place of issue; (iii) the Collector of the importing district has received back from the officer making the endorsement or issuing the export pass referred to in (ii), the copy of the import pass issued by the former, either endorsed by the latter or accompanied by the export pass issued by the latter; and (iv) the liquor has been brought by the route and within the period specified in the pass: Provided that no import of India made foreign liquor shall be made from the 'Sale to trade' - and 'off' in West Bengal who keeps a stock of duty-paid India-made foreign liquor. [....
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....t effectuated until the liquor is issued from the warehouse as it is on that date alone that the rate of tax applies. According to the petitioner, the amount collected from the Respondent No. 3 was only an advance paid, which is subject to the final determination of duties on the date of removal of the goods from the warehouse. Charging provision cannot be effectuated at all before the event of removal takes place. Therefore, State cannot unjustly enrich itself by claiming duties on products which are destroyed on account of their action. It is the case of the petitioner that since retention of the said amount by the State was in contravention of Article 265 of the Constitution of India, it is liable to refund the amount paid when there was no liability. Therefore, writ petition is also maintainable. 24. However, after minute scrutiny of the provisions of the Act and in particular Section 27(1)(a), it is apparent that the incidence of levy / imposition of countervailing duty is the factum of import itself. Countervailing duty, as is understood, in essence a duty levied on imported article to counterbalance the duties of excise levied on goods manufactured within the State. It is....
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.... of the said case also, it was contended by the petitioner that since the liquor was rendered unfit for human consumption and destroyed after its import, it was not liable to pay duty as payment of duty would arise only after excisable goods were removed from the bonded warehouse. Further, the Apex Court held that the fact that the liquor was rendered unfit for human consumption and destroyed after its import, which by itself attracted the levy of duty could not wipe off the liability of the appellant for payment of duty on the excisable goods after their import in the bonded warehouse. Even in the case of Mohan Meakin Breweries Ltd. (Supra), relied upon by the Respondent State, it was held that it is immaterial whether these goods were consumed or not, once they are imported into the territory of the State, which makes it liable for payment of countervailing duty. The decision relied upon by the counsel for the petitioner in the case of Kiran Spinning Mills (supra) are inapplicable to the facts of the present case as the said decision was rendered in respect of the provisions of the Customs Act. The Apex Court in the light of the provisions of the Customs Act, had held that the pr....
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...., does not hold good in the eye of law since the taxable event occurs on the import of liquor into the territory of the State, as per the provisions of Section 27 (1) (a) of the Act. In this regard, it is appropriate to refer to the recent judgment of the Apex Court in the case of State of Uttar Pradesh through Secretary (Excise) And others versus McDowell And Company Limited [(2022) 6 SCC 223, para 57], wherein it has been held as under: "57. As per Section 19, no intoxicant (and that obviously includes the liquor manufactured by the respondent) can be removed from the distillery or the place of storage unless the duty leviable thereupon has been paid or a bond has been executed for the payment thereof. Considering the overall scheme of the Act and the Rules, it may not be out of place to interpret the expression "removal" in Section 19 to include wastage in excess of permissible limit of total quantity of spirit produced or manufactured and stored. A comprehensive look at the scheme of Sections 17 to 19 and 28 and 29 of the 1910 Act and the enunciations of this Court leave nothing to doubt that in respect of the liquor that had undergone the process of distillation, exig....
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....¤¾à¤¹à¤°à¥à¤¤à¤¾/उपायà¥à¤•à¥à¤¤ (सà¤à¥€ जिला), सहायक आयà¥à¤•à¥à¤¤ उतà¥à¤ªà¤¾à¤¦/अधीकà¥à¤·à¤• उतà¥à¤ªà¤¾à¤¦ (आसवनगृह सहित सà¤à¥€ ) । विषय:- à¤à¤¾à¤°à¤¤ निरà¥à¤®à¤¿à¤¤ विदेशी शराब / वीयर के परिवहन आयात à¤à¤µà¤‚ निरà¥à¤¯à¤¾à¤¤ के दà¥à¤°à¥à¤ªà¤¯à¥‹à¤— की संà¤à¤¾à¤µà¤¨à¤¾à¤“ं को समापà¥à¤¤ करने के उदà¥à¤¦à¥‡à¤¶à¥à¤¯ से नियमों/पà¥à¤°à¤£à¤¾à¤²à¥€ में परिवà....
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....े जाय तथा उसका कर जमा कराकर 19 सी वितरक की अनà¥à¤œà¥à¤žà¤ªà¥à¤¤à¤¿ परिसर में सà¥à¤¥à¤¾à¤¨à¤¾à¤¨à¥à¤¤à¤°à¤¿à¤¤ किये जाय। राजà¥à¤¯ के अनà¥à¤¤à¤°à¥à¤—त आसवनियों तथा निरà¥à¤®à¤¾à¤¤à¤¾ के निरà¥à¤®à¤¾à¤£à¤¶à¤¾à¤²à¤¾ परिसर में रखे सà¥à¤•à¤‚ध को इससे छूट दिया जाय तथा उनà¥à¤¹à¥‡à¤‚ उतà¥à¤ªà¤¾à¤¦ पà¥à¤°à¤ªà¤¤à¥à¤°-19 बी की अनà¥à¤œà¥à¤žà¤ªà¥à¤¤à¤¿ ....
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....ेड के अनà¥à¤¤à¤°à¥à¤—त कारà¥à¤¯à¤°à¤¤ अनà¥à¤œà¥à¤žà¤ªà¥à¤¤à¤¿ परिसर का सà¥à¤•à¤‚ध का सतà¥à¤¯à¤¾à¤ªà¤¨ 31.3.1996 के बिकà¥à¤°à¥€ के बाद किया जाय तथा इसकी सूचना मà¥à¤–à¥à¤¯à¤¾à¤²à¤¯ को à¤à¥‡à¤œà¥€ जाय। अतः आपसे अनà¥à¤°à¥‹à¤§ है कि इन निरà¥à¤¦à¥‡à¤¶à¥‹à¤‚ / वà¥à¤¯à¤¾à¤–à¥à¤¯à¤¾ के आलोक में नई पà¥à¤°à¤£à¤¾à¤²à¥€ को ततà¥à¤ªà¤°à¤¤à¤¾ पूरà¥à¤µà¤• लागू कराने कà¥....