Punjab-Haryana High Court
M/S Stella Industries Pvt Ltd vs State Of Haryana And Others on 20 February, 2014
Author: Hemant Gupta
Bench: Hemant Gupta
CWP No.15115 of 2001 & 1
CWP No.15116 of 2001
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
Date of decision:20.2.2014
1. CWP No.15115 of 2001(O&M)
M/s Stella Industries Pvt Ltd. ....Petitioner
VERSUS
State of Haryana and others .....Respondents
2. CWP No.15116 of 2001(O&M)
M/s Aerol Forumlations Pvt Ltd. ....Petitioner
VERSUS
State of Haryana and others .....Respondents
CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA
HON'BLE MR. JUSTICE FATEH DEEP SINGH
Present: Mr. Manish Gandhi, Advocate for the petitioner.
Ms. Shubhra Singh, DAG, Haryana
*******
HEMANT GUPTA, J.(Oral)
This order shall dispose of CWP No.15115 of 2001 and 15116 of 2001 wherein challenge is to the memo of Deputy Commissioner, Excise and Taxation Department, Jhajjhar dated 5.10.2000 directing the petitioner to deposit excise duty at the rate of 60% as manufacturer of toilet preparation in terms of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (for short 'the MTP Act'). The challenge is also to the communication dated 24.08.2001 whereby direction was to the excise authorities to give effect to the provisions of the Act. Diwakar Gulati 2014.03.03 11:56 I attest to the accuracy and integrity of this document CWP No.15115 of 2001 & 2 CWP No.15116 of 2001
The argument raised is that the raw material being used by the petitioner in toilet preparations is denatured spirit which is not alcohol as defined under Section 2 (a) of the MTP Act, therefore, the petitioner is not liable to pay any duty as defined under the MTP Act.
Such claim of the writ petitioner has been controverted by the State asserting that the petitioner uses Ethyl Alcohol Denatured spirit and is liable to pay duty under the provisions of the Punjab Excise Act, 1914 as applicable to the State of Haryana; under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 or the Central Excise and Salt Act, 1944. It is pleaded that the denatured spirit or Ethyl Alcohol has been defined under Clause (vi) of Rule 2 of the rules framed under the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956. As per the Rule, the "denatured spirit" or "denatured alcohol" means alcohol of any strength, which has been rendered unfit for human consumption by the addition of substances approved by the Central Government or by the State Government with the approval of the Central Government. It is submitted that definition of "alcohol" in the MTP Act does not specify the same should be fit for human consumption. It contemplates that it is ethyl alcohol of any strength and purity having the chemical composition C2H5OH. Thus ethyl alcohol that is denatured spirit is covered under the MTP Act. It is also averred that ethyl alcohol C2H5OH is potable while Methyl Alcohol CH3OH is not potable. It is thus ethyl alcohol, which is marketable and has been purchased by the petitioners from the distilleries. It can be rendered unfit for human consumption, thus the petitioner is using ethyl alcohol in the manufacturing of toilet preparations.
Diwakar Gulati 2014.03.03 11:56 I attest to the accuracy and integrity of this document CWP No.15115 of 2001 & 3 CWP No.15116 of 2001
For the purpose of present writ petition, certain statutory provisions, as amended by The Finance Act, 2010 (Central Act No.14 of 2010) are reproduced below:-
"2. Definitions.- In this Act, unless the context otherwise requires,----
(a) "alcohol" means ethyl alcohol of any strength and purity having the chemical composition C2H5OH;
(c) "dutiable goods" means the medicinal and toilet preparations specified in the Schedule as being subject to the duties of excise levied under this Act;
(k) "toilet preparation" means any preparation which is intended for use in the toilet of the human body or in perfuming apparel of any description, or any substance intended to cleanse, improve or alter the complexion, skin, hair or teeth, and includes deodorants and perfumes.
3. Duties of excise to be levied and collected on certain goods.
1. There shall be levied duties of excise, at the rates specified in the Schedule, on all dutiable goods manufactured in India.
2. The duties aforesaid shall be leviable--
a. where the dutiable goods are manufactured in bond, in the State in which such goods are released from a bonded-warehouse for home consumption, whether such State is the State of manufacture or not;
b. where the dutiable goods are not manufactured in bond, in the State in which such goods are manufactured.
(3) Subject to the other provisions contained in this Act, the duties aforesaid shall be collected in such manner as may be prescribed.
The Schedule
Item No. Description of dutiable Rate of duty
goods
1 2 3
xx xx xx
4. Toilet preparations * Forty per cent. ad
containing alcohol or valorem
narcotic drug or narcotic.
*as substituted vide notification dated 01.03.2003. Diwakar Gulati 2014.03.03 11:56 I attest to the accuracy and integrity of this document CWP No.15115 of 2001 & 4 CWP No.15116 of 2001 Medicinal and Toilet Preparations (Excise Duties) Rules, 1956
2. Definitions.--In these rules unless there is anything repugnant in the subject or context,--
(ii) "absolute alcohol" means alcohol conforming to the British Pharmacopoeial specification for dehydrated alcohol;
(vi) "denatured spirit" or "denatured alcohol" means alcohol of any strength which has been rendered unfit for human consumption by the addition of substances approved by the Central Government or by the State Government with the approval of the Central Government;"
We have heard learned counsel for the parties and find as to whether the petitioner is using ethyl alcohol or methyl alcohol is a question of fact which is required to be determined by the departmental experts. In the absence of any finding that petitioner is using methyl alcohol, we are left guessing with the nature of raw material being used by the petitioner. Such is a question of fact which we leave it to be decided by the Authorities under the Act.
We do not find that any direction can be issued at this stage and that no finding can be returned that the petitioner is not using ethyl alcohol but methyl alcohol in the manufacturing of toilet preparations.
Consequently, the present writ petitions are disposed of with liberty to the petitioner to produce evidence before the Authorities under the Act in respect of raw material being used by the petitioner in manufacturing of toilet preparations.
(HEMANT GUPTA)
JUDGE
FEBRUARY 20, 2014 (FATEH DEEP SINGH)
'D. Gulati' JUDGE
Diwakar Gulati
2014.03.03 11:56
I attest to the accuracy and
integrity of this document