Andhra HC (Pre-Telangana)
V. Sreenivasa Reddy vs Commissioner Of Excise, Government Of ... on 18 September, 1997
Equivalent citations: 1998(1)ALD16, 1997(6)ALT696
Author: V. Rajagopala Reddy
Bench: V. Rajagopala Reddy
ORDER
Y. Bhaskar Rao, J
1. This batch of writ petitions is filed questioning the order passed by the Commissioner of Excise, Government of Andhra Pradesh, Hyderabad to the extent they direct the licensees-petitioners to pay the compounding fees and the value of the stocks seized and sales tax for the purpose of release of stocks. The impugned orders were passed on the applications made by the petitioners under Section 47A of the A.P. Excise Act, 1968, for short 'the Act', for compounding the offences registered against them. Since the question of law involved in all the writ petitions being one and the same, they arc being disposed of by this common order.
2. We will take up the facts of Writ Petition No.4671 of 1992 for the purpose of deciding the issue.
3. In that case, F.L.24 licence was granted to the petitioner to conduct business in excisable articles and he has been doing so in the name and style of M/s. AmrutaWines. The Excise authorities have inspected the shop of the petitioner and found certain quantity of non-duty paid liquor in his possession and seized the same. Then the authorities have issued show cause notice to the petitioner, who submitted his explanation. Ultimately, the licence of the petitioner was cancelled by the Excise Superintendent vide his proceedings dated 10-10-1991. Aggrieved by that order, the petitioner filed an appeal before the Commissioner of Excise, the first respondent. The petitioner also field an application under Section 47A of the Act to compound the offence. The first respondent compounded the offence directing the petitioner to pay a fee of Rs. 15,000/- and the value of the seized stock and the sales-tax for their release.
4. The contentions raised on behalf of the petitioners are that the direction of the Commissioner of Excise for payment of value of the seized duty-paid stocks for getting them released is arbitrary and illegal, that fixation of compounding fee by the Commissioner of Excise at a uniform rate of Rs.15,000/- in all the cases irrespective of the quantity of the non-duty paid stocks is arbitrary, illegal and discriminatory and that no notice was issued to the owners of the stocks, where stocks is seized from the transporter, before imposing compounding fee.
5. The Government Pleader contended that Sections 45, 46 and 47 of the Act provide for compounding of offences and Section 47A empowers the Commissioner of Excise to fix compounding fee and order release of property seized on payment of its value and that the provisions are incorporated in the Act so as to curb the illegal sale of non-duty paid excisable articles and avoid loss of public money and also to check the violation of conditions of licence.
6. To appreciate the above contentions, it is relevant to refer to the Statement of Object and Reasons of the Act, which reads :
"At present the Andhra Pradesh (Telangana Area) Akbari Act, 1316F. (Act 1 of 1316F) and the Andhra Pradesh (Telangana Area) Intoxicating Drugs Act, 1333F. (Act IVof 1333F) are in force in the Tclangana Area of the State. The Andhra Pradesh (Andhra Area) Akbari Act, 1886, has ceased to be in force - in the Andhra Area by virtue of Section 2 of the Andhra Pradesh (Andhra Area) Prohibition Act, 1937. However, in case the State Government declares by notification under the proviso to Section 2 of the Andhra Pradesh (Andhra Area) Prohibition Act, 1937 that the provisions of the Act other than Sections 1, 3 and 6 shall cease to be in force in any local area on any particular date, the Andhra Pradesh (Andhra Area) Akbari Act, 1886, will revive and come into force in that local area from the said date. It will thus be seen that on the statute book there are in the two areas of the State two sets of laws relating to the production, manufacture, possession, transport, purchase and sale of intoxicating liquors and drugs and the levy of duties of excise and countervailing duties on alcoholic liquors for human consumption. Indian hemp and other narcotic drugs. It is, therefore, proposed to integrate the said laws for achieving uniformity of law applicable to the entire State. It is however, proposed to extend the unified law only to the Telangana Area in the first instance and to extend it to any local area in the Andhra Area only as and when a notification is issued under the proviso to Section 2 of the Andhra Pradesh (Andhra Area) Prohibition Act, 1937 declaring that the provisions of the Act, shall cease to be in force in that local area. In other words, it extends to the Telangana Area immediately after it is brought into force, while it extends to the Andhra Area only as and when the prohibition is lifted in that area. The Bill is intended to give effect to the above proposals. The important provisions of the Bill arc explained in detail in the notes of clauses appended hereto."
Section 2 of the Act deals with definition. Section 2(6) defines 'Commissioner' as an officer appointed under Section 3. Section 3 of the Act empowers the Government to appoint an officer as the Commissioner of Excise, who shall be the Chief controlling authority in all matters connected with the administration of the Act, and he shall be competent to exercise all the powers of the Collector under the Act. Section 4 says that the Collector shall exercise the powers and perform the functions assigned by or under the Act subject to the general control of the Commissioner. Section 9 provides that no intoxicant shall be imported except under a permit issued by the officer not below the rank of Excise Superintendent on such terms as may be prescribed and on payment of such excise or countervailing duty and fees as may be levied under the Act. Similarly, Section 10 provides that no intoxicant shall be exported under a permit issued by the officer not below the rank of Excise Superintendent on such terms as may be prescribed and on payment of such fees as may be levied under the Act. Section 11 provides for regulation of transport of intoxicants from one area to the other and from one State to the other. Chapter IV deals with manufacture, possession and sale of intoxicants and establishment of distilleries. It provides that no person shall manufacture, possess and sell intoxicants without a permit. Section 21 provides for levy of excise and countervailing duty on excisable articles. Section 22 prescribes modes of levying duties. Section 25 provides for recovery of duty under the Act from a person other than the licensee in certain cases. Chapter VI deals with grant of licences and permits. Chapter VII deals with offences and penalties and compounding of offences by the Commissioner falls under that Chapter.
7. Section 45 of the Act provides that whenever an offence has been committed, which is punishable under the Act, any intoxicant, materials, utensils, implements in respect of which such offence has been committed or any intoxicant which is being lawfully imported along with intoxicant liable to confiscation and any receptacle, package or covering in which the thing liable to confiscation is found, and any vehicle, animal,vessel or raft used for conveying such things, shall have to be confiscated. Section 46 empowers the Magistrate to pass orders of confiscation of the things mentioned in Section 45 while trying a case. Section 47 empowers the Collector or specially empowered Excise Officer to compound offences. On payment of the amount fixed by the Collector or the Excise Officer, the person taken into custody shall be set at liberty and all the properties seized may be released and no proceedings shall be instituted or continued against such person in any criminal Court. The acceptance of compensation shall be deemed to amount to an acquittal and in no case any further proceedings be taken against such person or property with reference to the same Act. Section 47A of the Act provides that the Commissioner is empower to compound the offences falling under clause (a) of Section 34 or Section 38 of the Act and the procedure for compounding the offences is also provided. Thus, Sections 45 to 47A are relevant for the purpose of considering the scope of compounding the offences under the Act. Section 45 provides for confiscation of excise articles or any material used for manufacture or transport of such excise articles involved in the offence under the Act. Section 46 empowers the Magistrate to pass orders of confiscation in any case tried by him in respect of things liable to confiscation under Section 45 of the Act. Section 47 empowers the Collector or any Excise Officer who is specially empowered in that behalf, to compound the offences falling under clauses (c), (d), (g) or (h) of Section 34, clauses (a), (c), (f), (g) or (h) of Section 36, clause (c) or (d) of Section 37 or Section 41 of the Act. Under Section 47A of the Act the Commissioner is specially empowered to compound the offences falling under clause (a) of Section 34 or Section 38 of the Act.
8. From a reading of the above provisions together, it is evident that the power of compounding the offences is conferred on the authorities, including the Commissioner to facilitate the licence holders to conduct their business so that they should not sustain lossdue to closing down the business. Further, the provisions provide for collection of compounding fee and release of duty paid stocks on payment of value. As stated supra, the intendment of the provisions is to regulate business in liquor by grant of permits and licences. It is a fact that sale of liquor illegally in different ways and the sale of non-duty paid stock in the market is prevalent. It, therefore, cannot be said that the exercise of power provided under Sections 45 to 47A of the Act is unreasonable or arbitrary. The said power is exercised only when a person seeks compounding of offence by filing a petition. As soon as the offence is compounded, it is deemed that the person is acquitted of all charges and no proceedings shall be instituted or continued for the same act by the department or by the prosecution. Therefore, we see no merit in the contention that the provisions are arbitrary and discriminatory and so are violative of Article 14 of the Constitution,
9. It is contended that the power of the Commissioner in directing the release of duty paid stock on payment of value of the said stock is arbitrary and unreasonable. Section 45 itself provides that where non-duty paid intoxicant is sold or transported or kept under possession along with duty paid intoxicant, the authority competent has got power to confiscate both. Section 47 provides for compounding of offences by the Collector or Excise Officer or Commissioner by levying fee and directing release of duty paid stocks, if they are capable of human consumption, on payment of value thereof. Thus, it is evident from the above stated provisions that they are deterrent in nature so as to prevent illegal sales of intoxicants and the evasion of duty. Therefore, it cannot be said that the power exercised by the authorities under the said provisions is said to be unreasonable or arbitrary.
10. It is contended on behalf of the petitioner in Writ Petition No.11610/92 that no notice was given before confiscating the stocks. The writ petition is filed by the transporter of Indian made liquor stock and it is in no way concerned with the stocks sincethe owner of the stock has not filed writ petition raising the said contention. It is for the owner of the excisable articles to agitate the matter showing his bona fides. But the owner has not taken any steps. We, therefore, cannot accede to the contention raised on behalf of the petitioner.
11. It is lastly contended that levy of compounding fee of Rs.15,000/- in cases where value of the non-duty paid liquor is less.
12. It is to be noticed that Section 47A(2) provides that the Commissioner may in his discretion order for compounding of offence on payment of fee or compensation. The first proviso to Section 47A(2) says that the sum of money fixed as compounding fee or compensation by the Commissioner shall not be less than five times but not more than ten times the duty involved and where no duty is involved not less than Rs.15,000/- but not more than Rs.1,00,000/-. The Legislature imposed limitations on the excise of discretionary power of the Commissioner in imposing compounding fee by fixing minimum and maximum compounding fee to be imposed. Thus, the discretionary power of the Commissioner is controlled by Section 47A of the Act. Therefore, the said power is neither arbitrary or discriminatory nor violative of Articles 14 and 19(1)(g) of the Constitution. In none of the cases, it is brought to our notice by filing relevant material that compounding fee imposed is more than ten times the duty involved or more than Rs. 1,00,000/- where no duty is involved. Mere assertion, without filing any relevant material, will not help in deciding the issue. When we have asked for production of panchanama or valuation certificate or certificate showing the duty evaded no such material is placed before us. Therefore, it cannot be said that compounding fee is levied arbitrarily or unreasonably.
13. For the foregoing discussion, we do not see any merit in the writ petitions. The writ petitions are dismissed without costs.