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1991 Supreme(AP) 250
Andhra Pradesh High Court
Judges : M.N.RAO, V.SIVARAMAN NAIR
Excise Superintendent, Hyderabad District - Appellant
Versus
Vijay Krishna Wines Pvt.Ltd. - Respondent
Decided On : 07-02-91
Importers who have paid the countervailing duty in advance at the rates governing at the time of their applications and the dates of issue of the permits are liable to be compelled to pay higher duty due as on the date of actual import, if the import is effected after the expiry of the permit.
Headnote:
EXCISE - IMPORT PERMIT - COUNTERVAILING DUTY - ENHANCEMENT - APPLICABILITY - IMPORT AFTER EXPIRY OF PERMIT - LIABILITY TO PAY ENHANCED DUTY - VALIDITY OF RULE 10(5) AND (6) OF A. P. FOREIGN LIQUOR AND INDIAN LIQUOR RULES, 1970 - INTERPRETATION.
Fact of the Case:
The petitioners had applied for import permits for import of liquor from outside the State. 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. 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. By a notification dt. 23-9-1988, the Government issued G. O. MS. NO. 657, Revenue, Excise Department enhancing the countervailing 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.
Finding of the Court:
The court held that the petitioners were liable to pay the enhanced countervailing duty as per the rates extant as per the valid notifications on the date of importation. The court found that the petitioners had agreed, by positive statements in their applications as also by recitals in the counter-part agreement 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 in their applications, positively stated that they had read the A. P. Excise act and the Rules made thereunder and were bound by those provisions. A corresponding provision was contained in the import permit as well. The court held that it was as if the provisions of the A. P. Excise Act and the Rules were bodily incorporated into the permit itself. If that be so, the liquor ought to have been imported within the period of validity of the permit and if it was not so done, the statutory consequences of prosecution under section 34 and liability of the liquor for confiscation under Section 45 of the Act necessarily would follow. The Revenue only required the petitioners to pay the difference in countervailing duty due on the date of importation.
Issues: 1. Whether the importers who have paid the countervailing duty in advance at the rates governing at the time of their applications and the dates of issue of the permits are liable to be compelled to pay higher duty due as on the date of actual import? 2. Whether Rule 10(5) and (6) of the A. P. Foreign Liquor and Indian Liquor Rules, 1970 are valid and enforceable?
Ratio Decidendi: 1. The court held that the petitioners were liable to pay the enhanced countervailing duty as per the rates extant as per the valid notifications on the date of importation. The court found that the petitioners had agreed, by positive statements in their applications as also by recitals in the counter-part agreement 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 in their applications, positively stated that they had read the A. P. Excise act and the Rules made thereunder and were bound by those provisions. A corresponding provision was contained in the import permit as well. The court held that it was as if the provisions of the A. P. Excise Act and the Rules were bodily incorporated into the permit itself. If that be so, the liquor ought to have been imported within the period of validity of the permit and if it was not so done, the statutory consequences of prosecution under section 34 and liability of the liquor for confiscation under Section 45 of the Act necessarily would follow. The Revenue only required the petitioners to pay the difference in countervailing duty due on the date of importation. 2. The court held that Rule 10(5) and (6) of the A. P. Foreign Liquor and Indian Liquor Rules, 1970 are valid and enforceable. The court found that the petitioners were aware of the requirement to apply for extension of the permit three days prior to the date of expiry and that they had failed to do so. The court held that the requirement was mandatory and that the petitioners could not avoid the consequences of their failure to comply with it.
Final Decision: The court allowed the writ appeals and set aside the common judgment in all the writ petitions and dismissed the writ petitions.
( 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 they 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 and 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 Andhra 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 dt. 23-9-1988, the Government issued G. O. MS. NO. 657, Revenue, Excise Department enhancing the countervailing 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 slate 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 arc 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 which this Act extends from any other area of the Slate to which this Act docs 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 "notification" as meaning "notification published in the Andhra Pradesh Gazatte 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 the Collection of the exc
