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1992 Supreme(AP) 329
Andhra Pradesh High Court
Judges : M.N.RAO, V.SIVARAMAN NAIR
Excise Superintendent, Hyderabad District, Hyderabad - Appellant
Versus
Vijay Krishna Wines Pvt Ltd, Hyderabad - Respondent
Decided On : 07-02-92
Importers who have agreed to pay the duty due on consignments of imported liquor, if the duty due is not remitted or short-remitted, are liable to pay the enhanced countervailing duty if the import is effected after the expiry of the permit.
Headnote:
EXCISE DUTY - IMPORT PERMIT - VALIDITY - COUNTERVAILING DUTY - ENHANCEMENT - LIABILITY : Import of liquor after expiry of permit - Liability to pay enhanced countervailing duty - Petitioners' undertaking to pay duty due on consignment if not remitted or short-remitted - Petitioners' agreement to be bound by provisions of AP Excise Act and Rules - Import in contravention of Act and Rules - Petitioners' liability to pay differential duty - Rule 10(5) and (6) of AP Foreign Liquor and Indian Liquor Rules, 1970 - Forfeiture of countervailing duty remitted in advance - Petitioners' undertaking in application forms and counter-part agreement - Petitioners' liability to pay enhanced duty - Indirect taxation - Petitioners' entitlement to pass on additional liability to sub dealers or consumers - Petitioners' unjust enrichment at the expense of consumers - Petitioners' writ petitions dismissed.
Fact of the Case:
Petitioners applied for import permits for liquor from outside the State. Permits were issued with different periods of validity. Liquors were released from the distilleries within the period of validity of the permits but reached Andhra Pradesh on dates subsequent to the date of expiry of those permits. Petitioners had paid the countervailing duty at the rates prevailing at the time of receipt of permits. By a notification dated 23-9-88, the Government enhanced the countervailing duty with effect from 1-10-1988. The revenue demanded the petitioners to pay the difference in duty, since the importation was effected after the expiry of validity of the permits. Petitioners challenged these demands in writ petitions.
Finding of the Court:
The Court held that the petitioners were liable to pay the enhanced countervailing duty. The Court found that the petitioners had agreed to pay the duty due on the consignments of imported liquor, if the duty due was not remitted or short-remitted. The Court also found that the petitioners had undertaken to be bound by the provisions of the AP Excise Act and the Rules made thereunder. The Court held that the import of liquor after the expiry of the permit was in contravention of the Act and the Rules and that the petitioners were liable to pay the differential duty. The Court further held that the petitioners were not entitled to a refund of the countervailing duty remitted in advance, as they had forfeited the same by not importing the liquor within the validity of the permits. The Court also held that the petitioners were liable to pay the enhanced duty as it was an indirect tax which they could pass on to the consumers.
Issues: 1. Whether the petitioners were liable to pay the enhanced countervailing duty? 2. Whether the petitioners were entitled to a refund of the countervailing duty remitted in advance? 3. Whether the petitioners were liable to pay the enhanced duty as it was an indirect tax which they could pass on to the consumers?
Ratio Decidendi: 1. The petitioners were liable to pay the enhanced countervailing duty as they had agreed to pay the duty due on the consignments of imported liquor, if the duty due was not remitted or short-remitted. The petitioners had also undertaken to be bound by the provisions of the AP Excise Act and the Rules made thereunder. The import of liquor after the expiry of the permit was in contravention of the Act and the Rules and the petitioners were liable to pay the differential duty. 2. The petitioners were not entitled to a refund of the countervailing duty remitted in advance, as they had forfeited the same by not importing the liquor within the validity of the permits. 3. The petitioners were liable to pay the enhanced duty as it was an indirect tax which they could pass on to the consumers.
Final Decision: The Court allowed the writ appeals, set aside the common judgment in all the writ petitions, and dismissed the writ petitions. The parties were directed to suffer their respective costs.
( 1 ) THESE writ appeals arise from a common judgment disposing of writ petitions 18367, 18308, 16430, 19482 and 18300 of 1988, respectively. Common questions arise in all these five appeals. The facts are also similar. We will refer to the parties as tkey appeared in the writ petitions.
( 2 ) THE writ petitioners had applied for import permits for import of liquor from outside the State from Punjab in the four cases from Indore and Madhya pradesh in the case, W P No. 16430/88. The permits were valid for different periods. Liquors were released from the distilleries manufacturing the same within the period of validity of the permits and they reached the State of andhra Pradesh on dates subsequent to the date of expiry of those permits. In the four cases the imported liquor reached Andbra pradesh 11 to 17 days after 1-10-1988, whereas in W P No 16430 of 1988, the imported liquor reached Salur check post in Andhra Pradesh on 1-10-1988. The petitioners had paid the countervailing duty on the quantity of liquor to be imported at the rates prevailing at the relevant time, i e, when the permits are received. The rates prevailing at that time was Rs, 35/- per bulk litre. By a notification dated 23-9-88, the Government issued GO Ms No 657, Revenue, excise Department enhancing the counter vailing duty with effect from 1-10-1988 to Rs. 45/- per bulk litre. The revenue demanded the petitioners to pay the difference in duty, since the importation was effected after the expiry of validity of the permits. These demands were challenged in the writ petitions. The learned single Judge allowed the writ petitions. In respect of W P No 16430/88, the court directed refund of the differential duty which the petitioner had paid under protest along with interest at 12% per annum from the date of payment. The other four petitioners had taken delivery of the stocks after giving bank guarantees for 50% of the difference demanded in pursuance of orders of this Court. The learned single Judge directed that the bank guarantees would be cancelled. It is that common judgment that is assailed in these writ appeals.
( 3 ) IT is necessary for us to refer to the relevant provisions of the A P excise Act, the Rules and Notifications for the purpose of understanding the controversy in its proper perspective. Section 2 (10) of the A P Excise Act defines "excise duty" or "countervailing duty as meaning "the duty of excise or countervailing duty, as the case may be, mentioned in entry 51 in List II of the seventh Schedule to the Constitution. " that entry is in the following terms :"51. 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 :- (a) alcoholic liquors for human consumption ;"
( 4 ) THE other portions are not relevant for the purpose of the present case.
( 5 ) SECTION 2 (17) defines "import" to mean, except in the phrase "import into India", as, (a) "to bring into any area of the State to wkich this Act extends from any other area of the State to which this Act does not extend; (b) "to bring into the State otherwise than from a customs station, as defined in section 2 of the Customs Act, 1962 (Central Act 52 of 1962)". Section 2 (23) defines "netification" as meaning "notification published in the Andhra Pradesh gazette and that the term notified shall be construed accordingly". Section 9 which deals with the import of intoxicant reads as follows :"9. Import of intoxicant : - (1) no intoxicant shall be imported except under a permit issued by such officer, not below the rank of an Excise Superintendent, and on such terms as may be prescribed and on payment of such excise duty or countervailing duty and fees as may be levied under this Act : provided that the said officer may subject to such restrictions and conditions as may be prescribed to ensure tha Collection of the excise duty or countervailing
