Excise Act, 1915 (M.P.) - S. 26 (3) and 25 - duty enhanced retrospectively even on duty paid liquor - licencee is under obligation to pay difference on lifting the liquor from warehouse.

       Short Note

       1. This LPA is directed against the order dated 19.4.95 passed in M.P. No. 441/87 (M/s. Shevaram & Sons v. Commissioner of Excise & 3 others) of leaned Single Judge, whereby demand notice dated 31.3.87 (Annexure 'B') regarding payment of tax on stook kept by petitioner a licencee of liquor (foreign liquor made in India) in the authorised warehouse has been declared to be not liable to pay tax.

       2. Brief history of the case is that petitioner (respondent here) is a firm and carries on business as wholesale dealer of Indian made foreign liquor. Petitioner - respondent has obtained licence in the prescribed form in F.L. 11. Petitioner was given facility for keeping stock in the warehouse. The warehouse is kept under the lock and key of District Excise Officer. On requisition by the petitioner (respondent) licencee goods are released to the petitioner u/s. 25 of the Excise Act.

       3. The State Govt. (appellant) is empowered to levy and collect excise duty on import, export, transport or manufacture of excisable articles. The rates are also prescribed from time to time.

       4. The State Government had fixed the duty @ Rs. 23.00 per proof litre vide notification dated 22.1.86 the same was enhanced to Rs. 25.00 per proof litre and was made effective from 1.2.1987.

       5. Petitioner - respondent had a tax paid stock on 31.1.87. The State Govt. demanded difference of Rs. 2/ - per proof litre on the stock kept in the aforesaid warehouse and issued the notice dated 31.3.87 (Annexure 'B').

       6. Petitioner - respondent was required to deposit a sum of Rs. 21,770.94 Ps as duty. Petitioner - respondent challenged the order on grounds that petitioner has already paid the tax and it is the duty paid liquor that was kept in stock on 31.1.87 and, therefore, the petitioner - respondent is not liable to pay tax after delivery of the stock to him. It was further contended that warehouse was only working as an agent of the petitioner (as a keeper of the stock).

       7. The State Government contested the assertions of petitioner and further submitted that since the liquor was not sold to consumers or retailers of liquor business and, therefore, the petitioner is liable to pay tax even on the duty paid stock.

       8. Learned Single Judge placing reliance on a case reported in 1982 MPLJ 39 (Bharat Breweries & Allied Industries Gwalior and others v. State of M.P.) and by quoting the extracts of the judgment has accepted the petition and quashed the notice (Annexure 'B') with a further direction that the duty amount deposited by the petitioner (respondent here) be returned back. Hence this appeal by the State.

       9. Learned Additional Advocate General Shri S. Bhargava, appearing on behalf of the State has contended that there has been amendment in the Excise Act and the same has not been considered by the learned Single Judge of this Court. Learned counsel for respondent (original petitioner) opposed the contention.

       10. We have considered the rival contentions of learned counsel for parties. There is no dispute as to the imput and effect of decision referred above but there has been amendment in the law i.e. M.P. Excise Act, 1915. Sub - section (3) of section 26 of the Act has been added by Act No. 39 of 1982 by making effective from 1st Jan. 59 which reads as follows:

       "(3). Where the rate of duty is enhanced or reduced after payment of duty on issue of excisable article from warehouse and the excisable article is in stock with a holder of a licence, the excisable article in stock shall be subject to the levy of duty at the rate so enhanced or reduced and the difference in duty shall be payable or refundable, as the case may be, by or to the holder of a licence, with whom such duty paid excisable article is in stock at the material time."

       11. This is a declaratory law. The vires of this provision has not been challenged. This holds good and forms part of the statute and, therefore, it is applicable with full force.

       12. The amended provision makes holder of licence of excisable articles liable to pay duty if enhanced vide provisions of section 26 of the Act.

       13. It appears this provision of law was not brought to the notice of learned Single Judge. Consequently the same was not considered.

       14. As a result appeal succeeds. The order of learned Single Judge quashing the demand notice (Annexure 'B') and direction for refund of duty paid, is set aside.

       Counsel fee Rs. 500/ - .