The provision in the notification regarding the time limit for the production of the verification certificate is only directory and not mandatory. The demands for excise duty were illegal and opposed to Art.265 of the Constitution of India.

1. The Kerala Abkari Act, the Rules and notifications, made and issued thereunder enable the export of Indian made foreign liquor from bonded distilleries/wharehouses in this State to places outside this State. The short question is whether the slightest delay in the production of the verification certificates from the Excise authorities of the importing State can alter the rate of excise duty even in case where, before the demand is made, there is proof that the liquor has been exported and delivered in another State.

2. This appeal is by the State, aggrieved by the decision of a learned Single Judge quashing the demand and the proceedings for recovery of excise duty from the petitioner, M/s. Mc. Dowell & Co. Ltd. The brief facts are these. The petitioner engaged in the business of distilling blending, compounding and bottling of Indian made foreign liquors in this State bad valid licences and permits issued by the Excise department from time to time under the Kerala Abkari Act and the Rules made thereunder. They obtained the necessary permits to export Indian made foreign liquor, from their bonded distilleries and warehouses in this State to places outside the State. It is now admitted that during the years 1977-1983, 839 cases of Indian made foreign liquor were exported by the petitioner to some of the States outside Kerala on the strength of valid export/ transport permits, and after executing the necessary bonds, and producing the required "no objection certificates" from the Excise authorities of the importing State, and after pre¬payrnent of duty at the rate of 50 paise per proof litre. It is not in dispute that liquor was delivered in the other States and the excise officers bad issued necessary verification certificates. These certificates have since been produced before the authorise in this State also. Under the relevant notification, verification certificates from the excise authorities of the importing State had to be produced within fifteen days/forty two days of verification, in the importing State. The excise authorities demanded excise duty from the petitioner for these 839 cases at the rate of Rs. 14/- per proof litre and initiated revenue recovery proceedings in 1983 on the ground that the verification certificates were not produced during the currency of the export permit. The petitioner therefore approached this Court under Art.226 of the Constitution of India for quashing the excise demands and the notice issued under the Revenue Recovery Act, contending that there was do legal basis for insisting (a) that the verification certificates should have been produced within fifteen days of the date of export; and (b) that they should have been produced during the currency of the export permit. The State supported the demands asserting that these two contentions had to be fulfilled for earning the right to pay excise duty at the reduced rate of SO paise per proof litre.

3. The learned judge held that the relevant notification issued under the Kerala Abkari Act did not insist that the verification certificate from the excise authorities of the importing State should be produced within forty two days "of the date of export" or during the "currency of the export permit" and the notification only insisted that the verification certificates should be produced "within forty two days of

verification in the importing State". The learned judge held thus:

" ...The view taken by the State, that the period is forty two days from the date of export, finds no support on the language of the notification or on principle As long as it is permissible to export even on last day of currency of export permit, so long, it is not possible to produce a Certificate (to be issued on verification) within the currency of export permit. Issue of Verification Certificate cannot be contemporaneous with export Verification necessarily implies the exported commodity reaching the destination, the concerned authorities making physical ve