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IN THE HIGH COURT OF DELHI AT NEW DELHI
TUSHAR RAO GEDELA, J.
Brindco Sales Pvt. Ltd. - Petitioner
Versus
Govt. of NCT of Delhi and Others - Respondents
CM APPL. No.9260 Of 2023 and W.P.(C) No. 15775 Of 2022
Decided On : 02-05-2023
Rule 56 - Disposal of Leftover Stock - Rule 56, 63, 152 - The court analyzed the provisions of Rule 56, 63, and 152 of the Delhi Excise Rules, 2010. It held that Rule 56 is applicable to the disposal of leftover stock by a person whose license has expired or been determined. The court clarified that Rule 63, which pertains to the sale of approved brands, does not have any relation or nexus with Rule 56. The court also explained that Rule 152 is a charging section for excise duty and is applicable to a person who is a license holder during the relevant regime. The court further emphasized that the department cannot deprive the applicant from seeking disposal of leftover stocks under Rule 56 and is obliged to grant all benefits arising from it. The court also directed the department to consider the issue of refund of any excess excise duty levied in respect of the leftover stocks and dispose of the representation within six weeks. Additionally, the department was directed to apply Rule 56 to the leftover stocks and permit the applicant to clear/dispose of them within two weeks from the date of the order.
Fact of the Case:
The applicant sought compliance with an order to dispose of leftover stock and refund excess excise duty paid. The department argued that the disposal of leftover stock was legally incorrect and contrary to the Excise Rules. The court analyzed the relevant provisions of the Delhi Excise Rules, 2010 and considered the arguments of both parties.
Finding of the Court:
The court found that the applicant was entitled to dispose of the leftover stock under Rule 56 and to seek a refund of any excess excise duty paid. The court directed the department to consider the issue of refund and to permit the disposal of the leftover stock within a specified timeframe.
Issues: The issues involved the compliance with an order to dispose of leftover stock and refund excess excise duty paid. The court had to determine the applicability of Rule 56, 63, and 152 of the Delhi Excise Rules, 2010 and the entitlement of the applicant to seek disposal and refund.
Ratio Decidendi: The court held that Rule 56 is applicable to the disposal of leftover stock and directed the department to consider the issue of refund and permit the disposal of the leftover stock within a specified timeframe.
Final Decision: The court directed the department to consider the issue of refund of any excess excise duty levied in respect of the leftover stocks and dispose of the representation within six weeks. Additionally, the department was directed to apply Rule 56 to the leftover stocks and permit the applicant to clear/dispose of them within two weeks from the date of the order.
JUDGMENT :
(Tushar Rao Gedela, J.)
CM APPL. 9260/2023 (compliance of order dated 07.02.2023)
1. The applicant/petitioner has preferred the present application seeking the following prayers:
(1) by rectifying the Office Order No. F. No. L-1/62/Ex/Leftover/2022-23/14 dated 14.02.2023 issued by Non-applicant/respondents after adjusting the 1% Excise duty already deposited by the Applicant/petitioner on these registered brands at the time of Import in 2021- 22 amounting to Rs. 12,56,620.37/- (Rupees Twelve Lakh Fifty-Six Thousand Six Hundred and Twenty and Thirty-Seven Paise Only) on IMFL and Rs. 4,32,933.01/- (Rupees Four Lakh Thirty-Two Thousand Nine Hundred and Thirty-Three and One Paise Only) on IFL brands; and
(2) by rectifying the Office Order No. F. No. L-1/62/Ex/Leftover/2022-23/14 dated 14.02.2023 issued by Non-applicant/respondents by including the 05 registered brands as mentioned and tabulated in paragraph 10 above and to adjust the 1% Excise duty already deposited by the Applicant/petitioner on these 04 registered brands at the time of Import in 2021-2022 amounting to Rs. 17,980.25/- (Rupees Seventeen Thousand Nine Hundred and Eighty and Twenty-Five Paise Only) on 03 brands of Wine and Rs. 31,910/-(Thirty-One Thousand and Nine Hundred and Ten Only) on 01 brand of IFL; and to issue revised demand/direction for excise duty for sale/disposal of leftover stock after adjusting duty already paid.
b) Direct the Non-applicant/respondents to comply, forthwith and simultaneously, with Order dated 07.02.2023 read with Orders dated 07.12.002, 13.12.2022, 23.12.2022, 09.01.2023 and 20.01.2023 passed in the instant Writ Petition, in terms of above prayer (a) and (b) by permitting disposal/sale of Leftover stock of 2021-2022 as per Rule 56 of the Delhi Excise Rules, 2010;
c) Pass such other or further orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case.”
CONTENTIONS OF APPLICANT/PETITIONER
2. Appearing for the applicant Ms. Simran Brar, learned counsel submits that the applicant/petitioner was constrained to file the present application since the non-applicant/respondent department had not complied with the orders passed by this court on 13.12.2022, 23.12.2022, 09.01.2023 and 20.01.2023.
3. Ms. Brar, learned counsel submits that so far as the applicant/petitioner is concerned, the direction to non-applicant/respondent to permit disposal of the left over stock in terms of not only Rule 56 of the Delhi Excise Rules, 2010 (hereinafter referred to “the Rules, 2010”), but also the judgement in the case of W.P.(C) 16485/2022 dated 07.12.2022 titled as Anheuser Busch Inbev India Ltd. v. Govt. of NCT of Delhi, reported in 2022 SCC OnLine Del 4384 passed by the Coordinate Bench of this Court, relied upon in the order dated 13.12.2022, would equally bind the non-applicant/respondent. The non-compliance ought to entail strict action by this Court.
4. During the course of the arguments, Ms. Brar, learned counsel for the applicant/petitioner hands over the bench, a compilation of documents, which she extensively referred.
5. Ms. Brar, learned counsel invited attention of this court to the judgement in Anheuser Busch (Supra), particularly to Paras 17, 18 and 19. Paragraph 17 is extracted hereunder:—
“56. Procedure dealing with left over stock.- If any person, who has held a licence under these Rules, has in his possession, on the expiry, or determination of his licence, any intoxicant, he shall take action for its disposal in the following manner:—
(a) he shall submit to the D
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