Jharkhand High Court
Carlsberg India Private Limited vs State Of Jharkhand Through The ... on 5 January, 2023
Author: Aparesh Kumar Singh
Bench: Deepak Roshan, Aparesh Kumar Singh
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P (T) No. 378 of 2021
Carlsberg India Private Limited, Gurugram through its duly authorized
Representative Shri Pradyumna Maheshwari
--- --- Petitioner
Versus
1. State of Jharkhand through the Secretary and Commissioner of
Excise, Department of Excise & Prohibition, Ranchi
2. Secretary and Commissioner of Excise, Department of Excise &
Prohibition, Ranchi
3. Jharkhand State Beverages Corporation Limited through its
Managing Director, Ranchi
4. Managing Director, Jharkhand State Beverages Corporation Limited, Ranchi
--- --- Respondents
---
CORAM: Hon'ble The Acting Chief Justice Hon'ble Mr. Justice Deepak Roshan
---
For the Petitioner: M/s Tarun Gulati, Sr. Advocate, Pandey Neeraj Rai, Rohit Ranjan Sinha, Akchansh Kishore, Advocates For the Respondents: Mr. Rajiv Ranjan, Advocate, General, Mr. Ashok Kr. Yadav, Sr. S.C.-1
---
19/ 05.01.2023 In the present writ petition, petitioner has prayed for the following relief (s).
(a) holding and declaring the retention by the respondents, of the amount paid as import and countervailing duties on the stock whose shelf life has expired and which is not to undergo removal for retail-sale, as without authority of law, illegal, arbitrary and violative of Articles 14, 19 (1)(g), 265 and 300A of the Constitution of India.
(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 2 Jharkhand so as to avoid the shortage as was noticed in the previous summer season. Accordingly, the petitioner commenced its supplies of beer in the state of Jharkhand in accordance with its commitment to avoid shortages. In March 2020, lockdown was imposed both by the Central and the State Government due to which, sale of alcohol in the State of Jharkhand was completely stopped. Beer lying in the warehouses of Respondent No. 3, therefore, could not be removed for sale. Vide Annexure-5 series dated 10.06.2020, the Petitioner wrote a letter to the Respondent No. 2 bringing to its notice that 1,84,725 cases of beer valued at Rs. 14.00 Crores plus were lying at the warehouses of which the prescribed shelf life was expiring on account of the restriction of sale imposed by the government. Accordingly, it was requested that the shelf life of beer may be increased to 12 months, as had been done in other states to avoid unnecessary losses and wastage.
3. The Petitioner also submitted chemical analysis report of the beer on 15.07.2020 (Annexure 6) to establish that the beer was in saleable condition. Despite the Petitioner's request to increase the shelf life of beer to 12 months, permission for the same was not granted and accordingly, the beer could not be removed for sale from the warehouse of Respondent No. 3. As the beer was not removed for sale, the petitioner incurred losses in excess of Rs. 17.00 Crores. It is noteworthy that other states had increased shelf life of beer to 12 months but the State of Jharkhand did not do so despite the fact that up to March, 2019, the shelf life of beer in the state of Jharkhand was 12 months and the same was reduced only in April, 2019 to 6 months. Having incurred heavy losses on account of reasons totally beyond its control, the petitioner brought these facts to the notice of the Minister of Excise vide its letter dated 28.08.2020 (Annexure 7 series) and sought a refund of the excise duty paid in advance through Respondent No. 3 on the stock of beer which could not be removed for sale. Thereafter, a refund application dated 28.11.2020 (Annexure 7 series) was filed before the Respondent No. 2 by the Petitioner through its Advocate seeking refund of Rs 1,53,68,480/- on the above stock. On account of the failure of Respondents to refund the amounts paid in advance on which there could not be any liability, the petitioner was constrained to file the present writ petition before this Hon'ble Court.
4. Excise duty/Countervailing duty (in short "CVD") is 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 3 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) on an excisable article imported-
(i) by payment (upon or before importation) in the State or in the State or territory from which the article is brought, or
(ii) by payment upon issue for sale from a warehouse established, authorised or continued under this Act,
(a) on an excisable article exported-
by payment in the State or in the State or territory to which the article is sent;
(b) on an excisable article transported -
(i) by payment in the district from which the article is sent, or
(ii) by payment upon issue for sale from a warehouse established, authorised or continued under this Act;
(c) on intoxicating drugs manufactured, cultivated or collected -
(i) 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
(ii) 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);
(d) on spirit or beer manufactured in any distillery or brewery licenced, established, authorised or continued under this Act.-
(i) 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, authorised or continued under this Act, or
(ii) in accordance with such scale of equivalents, calculated on the quantity of materials used, or by the degree of attenuation of the wash or worth, as the case may be, as the State Government may prescribe; and
(e) on tari drawn under a licence granted under Section 14, Sub-section (1), by a tax on each tree from which the drawing of tari is permitted:
provided that, where payment is made upon the issue of an excisable article for sale from a warehouse, it shall be at the rate of duty in force on the date of issue of such article from such warehouse:4
[Provided further that in case of excisable articles imported or transported on payment of duty according to the provisions of sub-clause (i) of clause (a) or clause (c) of this section, the difference of duty resulting from any provision in the rates of duty subsequent 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.
From the above, it is clear that the duty is levied only on the issuance of the goods from the warehouse. The payment prior to the date of issuance is only an advance which is liable to the refunded if no duty is leviable at all.
Section 29A (3) provides for non-discriminatory treatment of goods manufactured and supplied from outside the state for the purpose of levy of duties by providing that the levy of such goods shall be similar to goods manufactured in the State.
6. Based on the aforesaid facts and legal provisions, following submissions have been made on behalf of the petitioner in support of the challenge.
That the process of import of liquor commences when the goods enter the State but ends only on clearance of the goods from the warehouse. It is submitted that the Act contains specific provisions for the establishment of warehouses under Section 15 where excisable goods can be stored without payment of duty. In cases where goods are warehoused, the import of goods is complete only when the goods are issued from the warehouse and duty is chargeable only on that event. Even where duties are chargeable on import of goods into the country but the goods are warehoused, the duty is chargeable only on the clearance of the goods from the warehouse. Import duties are 5 chargeable under the Customs Act on import of goods into the country like CVD is chargeable for bringing in excisable goods into the State. He has placed reliance on the judgment rendered by the Apex Court in the case of Kiran Spinning Mills Versus Collector of Customs (2000) 10 SCC 228, para-6 to submit that the process of import is complete only when the goods are cleared from the customs barrier and not when the goods enter the territory of India. It is relevant that just like the Customs Act, Section 15 provides for the levy of duty at a rate applicable on the date of clearance from the warehouse, Section 28(1) (a) (ii) read with the 1st proviso also specifically requires that the payment of duty is on issuance of the goods from the warehouse and at the rate applicable on the date of issuance of such goods from the warehouse.
The above principles squarely apply to the facts of the present case. No duty is leviable until the goods are cleared from the warehouse and become available for sale for the purpose of human consumption in the State of Jharkhand. The entry of the goods into the 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 and others [(2007) SCC Online Kar 16]. He has submitted that in the context of levy of State Excise Duty on potable liquor, the Karnataka High Court held that the charge of duty does not get effectuated until the liquor is issued from the warehouse as it is on that date alone that the rate of tax applies. If the charge of tax is not complete, no duty could be charged if the liquor is destroyed prior to that date. According to the learned counsel for the petitioner, the amount collected through the Respondent 6 No. 3 is only an advance paid which is subject to the final determination of duties on the date of removal of the goods from the warehouse. Under the Act, the levy itself is postponed to the event of removal of goods from the warehouse. The rate of tax applicable is the rate applicable on the date of removal and unless there is a removal, there is no rate available for computation of the tax. In such a situation, it is clear that the tax is chargeable only on removal of the goods from the warehouse and not any prior point of time even if the collection has been made in advance.
8. It is argued that the ingredients of tax are not available prior to the date of removal of goods from the warehouse. He placed reliance on the judgment rendered by the Apex Court in the case of Govind Saran Ganga Saran versus Commissioner of Sales Tax and others [1985 (Supp) SCC 205, Para-6] to submit that in the levy of any tax, there are four essential elements which have to be present and clearly specified before a tax can be levied. The four ingredients are the nature of the tax; the person liable to pay the tax; the rate of tax and the measure or value on which the tax is to be levied. If any of these ingredients is missing, the tax cannot be imposed.
9. In the facts of the present case, the rate of tax is determinable only on the removal of goods from the warehouse. Therefore, the charging provision cannot be effectuated at all before the event of removal takes place. Learned counsel submits that the State cannot unjustly enrich itself by claiming duties on products which are to be destroyed on account of their action. Petitioner has already lost more than Rs. 17.00 crores on account of the lockdown declared by the State and its arbitrary refusal to extend the shelf life of the beer. The charge of CVD on alcohol which could not be removed from the warehouse on account 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 7 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 Services Pvt. Ltd. Versus The State of Jharkhand and others passed in W.P (T) No. 2429/2018 wherein this Court relying on a host of judgments, held that the State cannot refuse to refund amounts paid by the petitioner where there was no liability under the Act. The writ petitions seeking refund of amounts paid where there was no liability were allowed.
10. Learned senior counsel for the petitioner has further argued that no alternative remedy / Non-Arbitral Dispute / Section 96 of the Act bars civil court jurisdiction. The writ petition has been filed seeking refund from the State of Jharkhand. There is no alternative remedy for seeking such a relief. The issues involved in the present writ petition depend on the interpretation of the statutory provision as well as the provision of the Constitution which only this Hon'ble Court has the jurisdiction to adjudicate upon.
11. Learned Advocate General has made the following submissions on behalf of the Respondent State.
In the present Writ Petition, the petitioner has sought a declaration that retention of import and countervailing duty paid by it for stock of which the shelf life had expired, and which had not undergone retail sale, is arbitrary. Consequently, it has sought refund of such duty paid to the extent of Rs. 1,53,68,480. Undisputedly, the Petitioner does not have a manufacturing facility in the state of Jharkhand. It has its breweries in Maharashtra, Telangana, West Bengal, Himachal Pradesh and Arunachal Pradesh, from where it imports beer into the State of Jharkhand. As per the supply agreement, after import, the beer is then sold to the wholesaler, Respondent No. 3, JSBCL. In its rejoinder, the petitioner has stated that it has no dispute with the Respondent No. 3 and the reliefs sought are only against Respondent No. 1. The entire dispute stems from the fact that certain stock of beer held by the petitioner had to be destroyed since it had become unfit for human consumption, having outlived its shelf life of six months. The petitioner's case is that since these imported beers never left or were removed for retail sale, the incidence of duty never happened and thus, the countervailing duty paid on such stock must be refunded. The petitioner attributes the lack of sale of their beers due to COVID-19. The inherent fallacy in the argument of the petitioner lies in the fact that it has completely misunderstood the very basis of levy of 8 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:
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 Constitution of India. Section 9(1) restricts import into the State, unless certain conditions are fulfilled viz., (a) permission must be obtained from the State Government, (b) fulfilment of conditions stipulated by State Government, and (c) payment of duty under Chapter V of the Act. Thus, it can be seen that import of liquor into the State of Jharkhand is dependent upon payment of duty under Chapter V. Section 12 stipulates that no intoxicant shall be imported except under a pass.
14. Section 27 under the Chapter V is the charging Section. Section 27(1)(a) is relevant for the purpose of the present dispute and states that State Government may impose countervailing duty on any excisable article imported. Thus, from a plain reading of Section 27(1) (a) it is beyond the pale of controversy that the incidence of levy / imposition of Countervailing duty is the factum of import itself. Countervailing duty is, in essence a duty levied on imported article, to counterbalance the duties of excise levied on goods manufactured within the State. Thus, it is levied at the time of import itself, to ensure a level playing field with excisable articles manufactured in the State.
15. Learned Advocate General has referred to the decision of the Hon'ble Supreme Court in the case of S. K. Pattanaik (Dead) through LRS. versus State of Orissa and others (2000) 1 SCC 413 (Paras 2, 4, 5, 6 and 7), where the Apex Court was dealing with a pari materia case, i.e., where the imported liquor had sedimented due to expiry of shelf life and had become unfit for human consumption and a demand for countervailing duty had been made on 9 such goods. It is relevant to mention that the Hon'ble Supreme Court was dealing with the provisions of the Bihar and Orissa Excise Act, 1915 itself, more particularly Sections 27 and 28 thereof. The Hon'ble Supreme Court first differentiated between excise duty and countervailing duty in the following terms:
4. "Excise duty" and "countervailing duty" are well-known concepts and are attracted in different situations. "Excise duty" is essentially a duty on manufacture of goods, and the taxable event is the manufacture of the excisable goods.
"Countervailing duty", on the other hand, is imposed when excisable articles are imported into the State, in order to counterbalance the excise duty, which is leviable on similar 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., Chandigarh and others (1976) 3 SCC 421 (Paras 8, 9 and 11), the Appellant therein imported liquor from its distilleries in Uttar Pradesh and Himachal Pradesh to its bonded warehouse in Chandigarh. During import, certain portion of the liquor was wasted. Countervailing duty was sought to be levied on such wasted produce. After discussing the concept of countervailing duty in paragraph 9, it was held that it was immaterial whether these goods were consumed or not. What was material was that they were imported and import permits were issued. It is on the fact that these goods had left Uttar Pradesh (i.e, their import) that the countervailing duty was levied. Further, in M/s. Shroff and Co. versus Municipal Corpn. of Greater Bombay and Another, 1989 Supp (1) SCC 347 (Paras 2, 4, 6, 16, 29, 30 and 41), the issue in dispute was levy of Octroi paid on alcohol entering into the State of 10 Maharashtra. While calculating the assessable value of the liquor for levy of Octroi, countervailing duty was sought to be included in such value. He submitted that Section 105 and 106 of the Bombay Prohibition Act, 1949, was similar to Sections 27 and 28 of the Act. The Supreme Court held that essence of countervailing duty is to set off the effect of non-payment of tax on manufacture. It is meant to protect the indigenous production. Further, it was held that importing goods into Greater Bombay with an intention to use it was sufficient for the purpose of levy of Countervailing Duty. Therefore, from this very judgment, it is evident that countervailing duty is completely different concept to customs duty / excise duty under the Central Excise Act. For countervailing duty, it matters not whether goods are destroyed since the levy is on import. Obviously, this cannot be equated with custom duty or excise duty where the incidence of levy is the clearance of the goods. The other judgments cited by the petitioner do not improve the case of the petitioner. In the case of Govind Saran Ganga Saran Versus Commissioner of Sales Tax and others [(1985) Supp. SC 205], it has been held that there is no uncertainty or vagueness in defining the taxable event, person on whom levy is imposed, rate of tax or the value to which the rate will apply. Hence, this Judgement is clearly inapplicable. In the case of Sree Balaji Enterprises, Bangalore versus Excise Commissioner in Karnataka, Bangalore and others [(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 the petitioner is that it has paid the countervailing duties on behalf of Respondent No. 3 and therefore, in any 11 event, it is not liable to pay countervailing duty- the same having been deposited on behalf of Respondent No. 3. This is completely devoid of any merit for the following reasons.
18. It has been submitted by the learned Advocate General that under Section 12 of the Act, no import can be made without an import permit. In the present case, the petitioner Carlsberg being a manufacturer outside the state, had to necessarily first import it to Jharkhand as a distribution licensee and then sell to the wholesaler (Respondent No. 3) for which it had to obtain import passes. Such import passes could be generated on the Petitioner's name after it had discharged the liability of payment of CVD. Reference in this regard may be also made to the Rules made under the Act, i.e., Vide Notification No. 470-F dated 15.1.1919 ("Rules"). These rules specify the conditions for import of liquor into the State. Rule 7(1), (3), and (4) introduced in 1996 are germane for the purpose of adjudication of the present dispute and they stipulate as under:
(i) Rule 7(1) states that a distribution license in Form 19C shall be obtained only by distilleries/manufacturers or bottlers.
(ii) Under Rule 7(3), after 1.4.1996, for manufacturers situated outside the State, import shall be done by them only through distributor's license under Form 19C, and on obtaining countervailing duty-paid permit.
(iii) Further, Rule 7(4) the liability of a distributorship licensee will inter alia be that he should be manufacturer / distiller.
19. It is further argued that a perusal of Form 19C, i.e., the license for distributorship, will make it evident that the said license mandates that the license holder (distributor) shall after payment of countervailing duty in advance, sell only to wholesalers. Further, condition 8 of the said license stipulates that such distributor, for import from outside the state, shall first obtain an import permit on payment of countervailing duty and import fee. Under Rule 8-A, import of any liquor is permitted only by way of import pass granted by the Collector, on prepayment of duty as well as any import pass fee into the treasury of the importing district. Such import pass is in Form No. 52-B.
20. From a conjoint reading of the 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 12 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 petitioner is the importer and it is his liability to pay countervailing duty. Further, there exists no provision in the Act for refund of countervailing duty to the manufacturer outside the State, neither has such occasion ever arisen. This is in consonance with the scheme of countervailing duty i.e. it is leviable on import. Once it has been imported, there exists no question of refunding the countervailing duty. He placed reliance on the judgment rendered by the Hon'ble Supreme 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] and in the case of Sneh Enterprises versus Commissioner of Customs, New Delhi [(2006) 7 SCC 714, para-21 and 22]. Based on these submissions, he submits that the writ petition is fit to be dismissed.
21. In reply, It is submitted by the learned counsel for the petitioner that the Respondent has relied upon several judgments which are not applicable at all to the present case. In none of the cases cited by the Respondents have the provisions similar to the one under the Act which have been noticed or analysed, particularly the second proviso to Section 28 in which there is a clear indication that levy itself is postponed under the Jharkhand Act. Further, the position that the import is not complete until the goods are cleared from the warehouse as noticed by two 03 Judges Benches of Hon'ble Supreme Court of India in Kiran Spinning Mills (Supra) and Garden Silk Mills Ltd. And another versus Union of India and others [(1999) 8 SCC 744, para-16 to 18] was not noticed in the said judgments. Accordingly, the said judgments are not applicable to the facts of the present case.
1322. We have considered the submissions of learned counsel for the parties and taken note of the materials relied upon from the pleadings on record. We have also gone through the provisions of Bihar and Orissa Excise Act, 1915 (hereinafter to be referred as the 'Act of 1915') and judgment cited by the parties. In order to appreciate the case of the parties, and their stand, it is appropriate to quote the relevant provisions of the Act of 1915.
Chapter I Preliminary
2. Definitions (6) "Excisable article" means -
(a) any alcoholic liquor for human consumption
(b) any intoxicating drug (6a) "Excise duty" and "countervailing duty" mean any such excise duty 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 dispensed with unless the State Government by notification, otherwise directs with respect to any local area.
(2) The passes required by Sub-Section (1) may be granted by the Collector.
(3) Such passes may be either general for definite periods and particular kinds of intoxicants or special for specific occasions and particular consignments only.
CHAPTER V DUTY
27. Power to impose duty on import, transport and manufacture (1) An excise duty or countervailing duty, as the case may be at such rate or rates as the State Government may direct, may be imposed either generally or for any specified local area, on:
(a) any excisable article imported; or
(b) any excisable article exported; or
(c) any excisable article transported; or
(d) .........................................
(e) ........................................14
(f) ..........................................
Explanation- Duty may be imposed on any article under this Sub- section at different rates according to the places to which such article is to be removed for consumption, or according to the varying strengths and quality of such article.
(2) A duty, at such rate or rates as the State Government may direct, may be imposed, either generally or for any specified local area, on any tari drawn under any licence granted under Sec. 14, Sub-section (1).
(3) Notwithstanding anything contained in Sub-sec (1):-
(i) duty shall not be imposed thereunder on any article which has been imported into the India and was liable, on such importation, to duty under the Indian Tariff Act, 1894 (8 of 1894), or the Sea Customs Act, 1878 (8 of 1878) if:
(a) the duty as aforesaid has been already paid; or
(b) a bond has been executed for the payment of such duty; and
(ii) xxxxx
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) on an excisable article imported-
(i) by payment (upon or before importation) in the State or in the State or territory from which the article is brought, or
(ii) by payment upon issue for sale from a warehouse established, authorised or continued under this Act,
(g) on an excisable 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, authorised or continued under this Act, or
(iv) in accordance with such scale of equivalents, calculated on the quantity of materials used, or by the degree of attenuation of the wash or worth, as the case may be, as the State Government may prescribe; and
(k) on tari drawn under a licence granted under Section 14, Sub-section (1), by a tax on each tree from which the drawing of tari is permitted:
provided that, where payment is made upon the issue of an excisable article for sale from a warehouse, it shall be at the rate of duty in force on the date of issue of such article from such warehouse:15
[Provided further that in case of excisable articles imported or transported on payment of duty according to the provisions of sub-clause (i) of clause (a) or clause (c) of this section, the difference of duty resulting from any provision in the rates of duty subsequent 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.
CHAPTER VI LICENCES, PERMITS AND PASSES
38. Fees for term, conditions, and form of, and duration of, licences permits & passes (1) Every licence, permit or pass granted under this Act:
(a) shall be granted:
(i) on payment of such fees (if any); and
(ii) subject to such restrictions and on such conditions; and
(b) shall be in such form and contain such particulars, as the Board may direct.
(2) Every licence, permit or pass under this Act shall be granted for such period (if any) as may be prescribed by rule made by the State Government under Sec. 89, Clause (e).
CHAPTER X Miscellaneous
89. Power of State Government to make rules (1) The State Government may make rules to carry out the objects of this Act or any other law for the time being in force relating to the Excise-revenues.
(2) In particular, and without prejudice to the generality of foregoing provisions, the 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 16 vicinity of which shops for the retail sale of any intoxicant shall not ordinarily be licenced.
(g) for prohibiting the grant to specified classes of persons of licences for the retail sale of any intoxicant
(h) for declaring, either generally or in respect of areas described in the rules, the persons or classes of persons to whom any intoxicant may or may not be sold;
(i) for regulating the procedure to be followed and prescribing the matters to be ascertained before any licence for the wholesale or retail vend of any intoxicant is granted for any locality;
(j) for restricting the exercise of any of the powers conferred by Clause (a) of Sub-section (1) of Section 68 and by Sections 69 and 70;
(k) for declaring the Excise Officers to whom and the manner in which information or aid should be given under Section 75.
(l) for the grant of expenses to witnesses;
(m) for the grant of compensation for loss of time to persons released by any Excise Officer under this Act on the ground that they have been improperly arrested, and to person charged before a Magistrate with the offences punishable under this Act and subsequently acquitted; and
(n) for prescribing restrictions or modifications in the application to Excise Officers of the provisions of the Code of Criminal Procedure [1973 (Act of 1974)] relating to powers of Police Officers which are referred to in section 78, Sub-Section (1) of this Act:
(3) The powers conferred by this Section for making rules are subject to the conditions that the rules be made after previous publication.
Provided that any such rules may be made without previous publication if the State Government considers that they should be brought into force at once."
It is relevant to extract Rule 7, 8 and 8-A which relate to Import, Export and Transport.
IMPORT, EXPORT AND TRANSPORT
7. The import, export and transport, respectively, of the excisable articles hereinafter specified shall be subject to the following rules, in addition to the restrictions imposed by sections 9, 10 and 12 and any prohibition made under section 11 and any rules made by the Board under sub- section (12) of section 90 of the Act.
। बिहार सरकार, उत्पाद एवं मध बिषेध बवभाग पत्र सं0-4/टेक- 10014/93-ऊ0-1109 ददिांक-25 मार्च 1996 प्रेषक, देवदास छोटराय, आयुक्त उत्पाद, बिहार, सेवा में समाहर्ाच/उपायुक्त (सभी बिला), सहायक आयुक्त उत्पाद/अधीक्षक उत्पाद (आसविगृह सबहर् सभी ) ।
बवषय:- भारर् बिर्मचर् बवदेशी शराि/वीयर के पररवहि आयार् एवं बियाचर् के दुरुपयोग की संभाविाओं को समाप्त करिे के उद्देश्य से बियमों/प्रणाली में पररवर्चि के संिंध में।
उपयुचक्त बवषयक बवभागीय पत्रांक-4/टेक-10014/93-839 ददिांक- 3.3 1996 के क्रम में मुझे यह कहिा है दक प्रपत्र 19 सी में बवर्रकर्ा की िई अिुज्ञबप्त स्वीकृ र् करिे से संिंबधर् कबर्पय ददशा-बिदेश की अपेक्षा स्थािीय पदाबधकाररयों द्वारा की गई है। इसी क्रम में यह ददशा-बिदेश ददये िा रहे हैं-
17(1) प्रपत्र 19 सी में बवर्रक की अिुज्ञबप्त के वल आसविी/बिमाचर्ा एवं िोटलसच धायच करें गे। यह अिुज्ञबप्त बिमाचर्ा/आसविी/कम्पिी से बभन्न अन्य दकसी व्यबक्त को िहीं दी िायेगी।
(2) प्रपत्र 19 िी में िंबधर् भांडागार की अिुज्ञबप्त के वल आसविी/बिमाचणशाला के पररसर में ही प्रभावी होगी। बिमाचणशाला के िाहर अवबस्थर् 19िी की अिुिबप्तयों को आसविी/बिमाचर्ाकम्पिी की इच्छा के अिुसार 19सी की अिुज्ञबप्त में िमा राबश के समायोिि के पश्चार् पररवर्र्चर् दकया िा सके गा, वशर्े दक वे प्रपत्र 19सी की अिुज्ञबप्त के बलए बिधाचररर् अनुज्ञा शुल्क की राबश िमा दकये हो। यहााँ यह भी स्पष्ट कर देिा आवश्यक प्रर्ीर् होर्ा है दक िंबधर् भांडागार और बवर्रक की अिुज्ञबप्त एक िहीं है, अलग-अलग है।
(3) रािस्व पषचद, अबधसूर्िा संख्या-23-5/94-2-3817 ददिांक-30 मई 1994 के द्वारा प्रपत्र 19वी में संशोधि के फलस्वरुप ददिांक- 1.4.1996 से प्रपत्र 19िी के - अिुज्ञाधारी राज्य के िाहर अवबस्थर् बिमाचणशाला से आयार् के बलए अिुमर् िहीं होंगे इसके बलए उन्हें आयार् पारक िहीं ददया िायेगा। ददिांक-1.4.1996 के िाद राज्य के िाहर अवबस्थर् बिमाचर्ाओं से के वल प्रपत्र 19सी में उिके द्वारा धाररर् बवर्रकर्ा की अिुज्ञबप्त के माध्यम से ही कर भुगर्ेय पारक के आधार पर अपिे बिर्मचर् ब्राण्ड को ही आयार् दकया िा सके गा। ((4) बवर्रक की अिुज्ञबप्त के बलए दायर्ा इस प्रकार होगी:-
(क) आवेदक का आसविी/बिमाचर्ा होिा आवश्यक है।
(ख) आसविी/बिमाचर्ा की अिुज्ञबप्त का अद्यतन िवीकरण संिंबधर् राज्य द्वारा दकया गया हो।
(ग) आवेदक (बिमाचर्ा कम्पिी) की सुदढ़ृ आर्थचक क्षमर्ा का प्रमाण उपलब्ध हो।
(घ) बवर्रकर्ा के पररसर के बलए िक्शा र्था प्लाि का अिुमोदि आयुक्त उत्पाद से प्राप्त हो।
(ङ) बवर्रक अिुज्ञबप्त के बलए उिका आवेदि पत्र संिंबधर् बिला से अग्रसाररर् कर भेिा गया हो र्था उिके बिमाचणशाला में बिर्मचर् बवदेशी शराि के ब्राण्डों का िाम हो।
(5) प्रपत्र-19 िी में भाण्डागार की अिुज्ञबप्त के वल आसविी/बिमाचणशाला र्क ही सीबमर् रहेगी। इसके साथ प्रपत्र-1 में थोक बिक्री की अिुज्ञबप्त के िदले बवर्रक की अिुज्ञबप्त उत्पाद प्रपत्र- 19 सी में लेिा अबिवायच होगा (6) बवर्रकर्ा के अिुिाधारी के वल उसी कम्पिी के बवदेशी शराि का बवर्रण कर सकें गे, बिसके बलए उन्हें अिुमबर् ददया गया हो।
इन्हें दकसी अन्य कम्पिी के शराि के बवर्रण की अिुमबर् िहीं होगी। (7) पषचदीय अबधसूर्िा संख्या-23-5/94-3-3818 ददिांक 30 मई 1994 द्वारा (यथा संशोबधर्) पषचदीय अबधसूर्िा संख्या-23-137-2 ददिांक-29 अप्रैल 1919 की बियमावली के बियम-106 के अिुसार बवर्रक की अिुज्ञबप्त सबहर् िंबधर् भांडागार की अिुिबप्त के बलए एक लाख अस्सी हिार रुपये का अनुज्ञा शुल्क र्था 25 हिार रुपये की प्रबर्भूबर् राबश प्रबर् वषच अबग्रम देय है।
(8) वर्चमाि वषच में बवर्रक की अिुज्ञबप्त के बलए ददये गये आवेदिों का बिष्पादि एक सप्ताह के अन्दर दकये िाये।
(9) र्ूाँदक यह ियी व्यवस्था की सफलर्ा आयार् पारक के त्वररर् बिगचमि पर बिभचर सील है, इसबलये बिला उत्पाद कायाचलय बवर्रक अनु ज्ञाधारियो द्वारा र्ालाि जमा कर, आयार् पारक के बलये आवेदि पत्र देिे पर, पारक का बिगचमि आवंटि पत्र प्राबप्त की बर्बथ से अबधक से अबधक दो ददिों के अन्दर की िाय, र्ादक इसमें कोई भी अिावश्यक बवलम्ि ि हो। यह आदेश थोक बिक्री अिुज्ञाधाररयों के द्वारा पारक प्राबप्त के बवषय में भी लागू होगा।
18(10)1.4.1996 से उत्पाद प्रपत्र-19 िी (िंबधर् भाण्डागार) में रखे सभी स्कं ध को सत्याबपर् कर सील कर ददये िाय र्था उसका कर िमा कराकर 19 सी बवर्रक की अिुज्ञबप्त पररसर में स्थािान्र्ररर् दकये िाय। राज्य के अन्र्गचर् आसवबियों र्था बिमाचर्ा के बिमाचणशाला पररसर में रखे स्कं ध को इससे छू ट ददया िाय र्था उन्हें उत्पाद प्रपत्र-19 िी की अिुज्ञबप्त को कायचरर् रखिे ददया िाय। (11)1.4.1996 से उत्पाद प्रपत्र-1 में सेल टू ट्रेड अिुज्ञबप्त के र्हर् मात्र बवर्रक से ही स्कं ध लेिे के बलए पारक बिगचर् दकये िाय। (12)31.3.1996 र्क सेल टू ट्रेड की अिुज्ञाधाररयों को राज्य के िाहर से या राज्य के अन्दर से िो भी आयार् पारक बिगचर् दकये गये हों, उस पर आयार् की अिुमबर् पारक की मान्यर्ा अवबध र्क ही वह मान्य होगी र्था अवबध का बवस्र्ार र्त्काल िहीं दकया िाय। ऐसे लंबिर् पारकों की सूर्ी वार्षचक स्कं ध सत्यापि बववरणी के साथ भेिी िाय।
(13) उत्पाद प्रपत्र-1 सेल टू ट्रेड के अन्र्गचर् कायचरर् अिुज्ञबप्त पररसर का स्कं ध का सत्यापि 31.3.1996 के बिक्री के िाद दकया िाय र्था इसकी सूर्िा मुख्यालय को भेिी िाय।
अर्ः आपसे अिुरोध है दक इि बिदेशों/व्याख्या के आलोक में िई प्रणाली को र्त्परर्ा पूवचक लागू करािे की व्यवस्था की िाय।
FOREIGN LIQUOR Import of Foreign Liquor "8. Imports of India-made foreign liquors by troops and military bodies or by persons holding licences for sale are allowed only under cover of passes from the Collector of the importing district and only after the following conditions 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.
[8-A. Import of India made foreign liquor in any quantity from any distillery, brewery, bonded warehouse or bonded laboratory by any person including a distributor's licence for sale of such liquor to the holders of sale" "sale to the trade" license and to holders of license for troops and military bodies is permitted only in import pass granted by the Collector of the district of import on prepayment of duty as well as import pass fee prescribed by the Board of Revenue into the treasury of the importing district provided 19 the conditions specified in Rule 8 are mutatis mutandis satisfied.]"
प्रपत्र सo 19 सी "(8) दक वह अन्य राज्यों से बवदेशी शराि के आयार् के बलये समाहर्ाच अथवा उिके द्वारा प्राबधकृ र् कककक अन्य पदाबधकारी से कर और आयार् पारक शुल्क के पूवच भुगर्ाि पर आयार् पारक प्राप्त करे गा र्था आयाबर्र् बवदेशी शराि के पहंर्िे के र्ुरंर् िाद ही इसकी सूर्िा आयार् पारक स्वीकृ र् करिे वाले पदाबधकारी को देगा र्था बििा बिलम्ि के इस उद्देश्य से प्रबर्बियुक्त उत्पाद पदाबधकारी के समक्ष इस परे पण का भंडारण करे गा र्था इसे रबिस्टर में अंदकर् करे गा िो परे षि के भंडारण के प्रमाण के रूप में उत्पाद पदाबधकारी द्वारा हस्र्ाक्षररर् दकया िायेगा।"
23. The undisputed facts from the pleadings on record reveal that the petitioner supplied beer in the State of Jharkhand kept in the warehouse of the Respondent No. 3 from its factories situated outside the State. Substantial quantity of which said to be 1,84,725 cases of beer valued at Rs. 14.00 crores could not be removed for sale from warehouses due to restriction on sale imposed by the Government during the lockdown which started due to Covid in March 2020. The prescribed shelf life of beer of six months expired in the meantime. Petitioner claimed refund of excise duty paid by it on the stock of beer which could not be removed for sale.
24. The sheet anchor of the petitioner is that the excise duty / countervailing duty (CVD) under the Jharkhand Excise Act, 1915 was paid in advance as 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. In view of proviso to Section 28(1) of the Act, duty is levied only on issuance of the goods from the warehouse and as such, payment made prior to the date of issuance is only an advance liable to be refunded, if no duty is leviable at all due to non-removal of beer from the warehouse for sale. Petitioner has relied upon the decision of the Apex Court in the case of Kiran Spinning Mills Versus Collector of Customs (2000) 10 SCC 228, para-6, and in the case of Govind Saran Ganga Saran versus Commissioner of Sales Tax and others [1985 (Supp) SCC 205, Para-6] on the four essential elements necessary for the levy of any tax. He also relied upon the case of Sree Balaji Enterprises, Bangalore versus Excise Commissioner in Karnataka, Bangalore and others [(2007) SCC Online Kar 16] on the proposition that the charge of duty does not get 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 20 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 levied at the time of import itself to ensure a level playing field with excisable articles manufactured in the State. In this regard, the 1st proviso to Section 28 provides that the rate of tax is to be realized on the date of removal of liquor from the warehouses for sale. In the case of S. K. Pattanaik v State of Orissa (Supra), the Apex Court while dealing with the same provisions of Bihar and Orissa Excise Act, 1915, more particularly Section 27 and 28 thereof, held as under:
"4. Excise duty" and "countervailing duty" are well-known concepts and are attracted in different situations. "Excise duty" is essentially a duty on manufacture of goods, and the taxable event is the manufacture of the excisable goods. "Countervailing duty", on the other hand, is imposed when excisable articles are imported into the State, in order to counterbalance the excise duty, which is leviable on similar 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.
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."
25. The Apex Court explained the difference in the concept of Excise duty and countervailing duty by holding that the excise duty is essentially a duty on manufacture of goods and the taxable event is the manufacture of the excisable goods, whereas countervailing duty on the other hand is imposed 21 when excisable articles are imported into the State in order to counterbalance the excise duty, which is leviable on similar goods if manufactured within the State. The incidence of the impost is on the import of excisable articles, i.e. at the time of entry into the State. In the facts 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 process of import is complete only when the goods are cleared from the customs barrier and not when the goods enter the territory of India. Whereas there is no quarrel as to the four essential elements on the levy of any tax, as laid down by the Apex Court in the case of Govind Saran Ganga Saran (Supra), in the facts of the instant case, taxable event of levy of countervailing duty happens on the liquor being imported into the territory of Jharkhand. Therefore, there is no uncertainty or vagueness in defining the taxable event. Proviso to Section 28(1) only indicates the rate of tax which is to be levied at the time of removal for sale from the warehouse. The decision in the case of Sree Balaji Enterprises, Bangalore (Supra) also does not fit into the case of the petitioner as the dispute was whether excise duty i.e. goods manufactured inside the State could be levied when the goods were destroyed. In the present case, as per the provisions of the Act, CVD is levied at the time of import itself and only a facility for postponement of collection is provided. The judgment rendered by this Court in the case of M/s Retail Services Pvt. Ltd. (Supra), relied upon by the petitioner, applies in different context under the JVAT Act, whereunder tax have been realized from the petitioner without any liability, though claim for 22 refund was rejected on the ground that there is no provision under the JVAT Act.
26. If we examine the provisions of rules also, it is apparent that a licence for distributorship in Form 19C can be issued only if the licence holder undertakes to make payment of countervailing duty in advance. Further, condition-8 of the said licence stipulate that such distributor, for import from outside the State shall also obtain an import permit for payment of countervailing duty and import fee. In Rule 8-A, liquor can only be imported by way of an import pass granted by the Collector on prepayment of duty as well as any import pass fee into the Treasury of the importing district. Under licence as also under Rule 7(3), import can be done only on payment of countervailing duty and on obtaining an import permit. As such, the plea of the petitioner that non-removal of beer from the warehouse during the period of its shelf life on account of Covid lockdown would not make it liable for payment of countervailing duty in terms of proviso to section 28(1) of the Act, 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, exigibility to excise duty had occurred at the end of the distillation process or when it was issued from the distillery. The point of quantification of this duty, even if linked in point of time to the date of issue for sale in terms of proviso to Section 29, does not relate to the "event of chargeability" that had occurred as soon as the liquor was distilled and received in the bottling tank or had been otherwise issued from distillery. In other words, the liquor that was lying stored in the bonded warehouse had already become subject to the excise duty, with postponement of actual charging of the duty as per the rate applicable on the date and time of issue for sale from the warehouse. It gets perforce reiterated that taxable event was production or manufacture, and not sale, of the liquor. In this view of the matter, the submission that the levy in question is not 23 authorised by law, and is hit by Article 265 of the Constitution of India, remains untenable and is required to be rejected."
It is also proper to refer to the observation of the Apex Court in the case of M/s. Shroff and Co. versus Municipal Corpn. Of Greater Bombay and Another [1989 Supp (1) SCC 347, Paras 4, 5, 6 and 41].
27. In the light of the discussion made hereinabove, and principles applicable on levy of countervailing duty upon import of liquor in the State under the Bihar and Orissa Excise Act, 1915 and the decisions on the point, we are of the considered view that the plea of the petitioner for refund of the amount to the tune of Rs. 1,53,68,480/- paid as import and countervailing duty on the stock, is not tenable in law and on facts. Writ petition being devoid of merit, is accordingly dismissed.
(Aparesh Kumar Singh, A.C.J) (Deepak Roshan, J) Ranjeet/