1 IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD CA NO.10160/2009 in WP 7033/2007 M/s Mercury Winery Pvt.Ltd. having its Registered Office at Crystal Tower Samna Niwas Compound, Kasturba X Rd., Kandivali (W), Mumbai 400 067 and its factory at Gut No.2150-1/2 10th Mile, Ozar, Tal.Niphad, Dist.Nashik. AND FOUR OTHERS. ...APPLICANTS VERSUS Vilas s/o Dongarlal Jaiswal, Age 54 years, Occ. Business, r/o. 2 - Sagar Park, Jay Nagar, Jilha Peth, Jalgaon 425 002 AND SIX OTHERS. ...RESPONDENTS ... Mr. S.P.Deshmukh, Adv., for applicant. Mr. G.V.Wani, Adv., for R.no.1. Mr. P.R.Patil, Special Counsel for Government/R.Nos. 2 to 5. Mr. R.T.Nagargoje, Adv., for R.No.6. Mr. A.N.Sabnis, Adv., h/f Mr. S.P.Shah, Adv., for R.No.7. ... WITH 2 CA NO.10161/2009 in WP No.7033/2007 1. The State of Maharashtra, Through: The Secretary, Home Department, Mantralaya, Mumbai - 32 AND THREE OTHERS. ...APPLICANTS VERSUS Vilas s/o Dongarlal Jaiswal, Age 57 years, Occu. Business, r/o. 2, Sagar Park, Jaynagar, Zilla Peth, Jalgaon 425 002 (Mah.) AND FIVE OTHERS. ...RESPONDENTS ... Mr.P.R.Patil, Special Counsel for applicant State. Mr. G.V.Wani, Adv., for R.Nos.1 to 4 in WP. Mr. S.P.Deshmukh, Adv., for R.Nos. 5 to 9. Mr. R.T.Nagargoje, Adv., for R.No.10. Mr.A.N.Sabnis, Adv., h/f Mr.S.B.Shah, Adv., for R.No.11. ... CORAM: P.R.BORKAR AND K.U.CHANDIWAL, J. DATE:25-3-2010 ... Dt.of reserving the order: 24/3/2010 Dt.of pronouncing the order: 25.3.2010 *** 3 PER COURT : 1. Heard. 2. The State and M/s Mercury Winery Pvt.Ltd. have urged to modify the order dt.19th Sept.,2008, recorded by Division Bench of this Court ( Coram: F.I.Rebello and K.U.Chandiwal, JJ.) in Writ Petition No.7033/2007. The Division Bench, on considering the report of Joint Commissioner, addressed to the Principal Secretary, Home Department ( State Excise), Mantralaya, Mumbai, in response to a query made by the Principal Bench of this Court in Writ Petition No.2388/2007, informed in communication dt.11th Feb.,2008, as under: "The present duty structure for different types of wines either produced in Maharashtra or produced by mixing with the other brands of different States or Countries by Government Notification dated 31st March, 2006. In the said notification duty structure for the manufacturers as their own brands from the grapes produced within a State is 100% of the manufacturing costs. Therefore, the formula for MRP on such wine would be four times of the manufacturing cost. But the Govt. has remitted whole excise duty on such wine under notification dated 31.3.2006. Therefore, formula for declaration of MRP would be three times of the manufacturing cost by deleting one part as excise duty. Accordingly, basic Rules of 1966 relating to the fixation of maximum retail price needs to be amended accordingly." 4 3. The Division Bench considered affidavit of Arjun Nana Ohol, Superintendent of State Excise, Jalgaon, his additional affidavit and having not satisfied with, the affiant's contention and the approach, particularly leading the same to be of the State Government, observed, "Once the excise duty is levied and collected, the said Excise duty must be paid into the State coffers. If Excise Duty is not to be levied, then it cannot form part of the M.R.P. The State cannot first charge excise duty and then allow the wine manufacturers to retain the same on the ground of remission". The Division Bench observed, "This is clearly a case of unjust enrichment". The State Government was directed to take steps in law to recover the amount collected as Excise Duty but not paid to the State pocket. It is this order which is sought to be modified. 4. The State submits that the retailer gets return of the amount of octroi, commission, etc. after selling the country liquor at the rate of M.R.P. plus 20 per cent Sales Tax. It was pointed out by the State in paragraph no.6 that vide notification dt.28.8.2008, the Rules are amended, thereby, the element of sales tax is also included in the M.R.P. and, therefore, country liquor, having M.R.P. of Rs.80.98, which is higher than 5 Rs.75.18 as shown to be landing cost of country liquor so that, CL-III licensee is recovering from the customers the landing cost of country liquor and octroi as well as retailer's commission, the total of which is less than Rs.80.98. The State submits that, having regard to the Maharashtra Grapes Industry Processing Policy, 2001, and revised policy of 2004, thereby extending hundred per cent exemption/remission of excise duty and further amendment to the Rules, the excise duty is neither intended to be imposed nor the same is recoverable from the manufacturers, being one of the component of M.R.P. of the wine. 5. The Mercury Winery Pvt.Ltd. has set out its grievance in identical manner and, in addition, has stated that the petitioner therein is not recovering any excise duty from the retailers or from the customers. The M.R.P. is printed on the wine bottles only after approval of the Excise Department. The Counsel submits, it is settled law that no duty or tax can be levied and recovered without following due process of law, including issuance of show cause notice and extending opportunity of representation and hearing. 6. It is a matter of record, after the order, notices are issued by the State Government soliciting information from different wineries so 6 as to establish that they have not levied any excise duty or whether any excise duty was recovered in the past. The responses were solicited in a time frame and then the authorities contemplated action. In the light of this opportunity being given to the respective wineries, it hardly matters that the order of the Division Bench has aggravated an uncalled for situation. The Division Bench desired that there should not be unjust enrichment as the M.R.P. to the CL-III licensee indicated collection of excise duty not added/credited to the coffers of the State Government. 7. It is urged by Shri P.R.Patil, Advocate, that the State is not entitled to recover taxes which are not permissible by law. He referred to Article 162 of the Constitution. 8. It is not disputed that the wines are subject to excise duty as per the prevailing law but, as a policy, Government wanted to give exemption to encourage wine business in the State. Inspite of this, instead of reducing the price of wine and, thereby, become competitive in the market and raise sales and also thereby increase profit, the wineries appear to have recovered excise duty from the customers and pocketed the same. This was clearly not permissible. This is nothing but unlawful enrichment. Recovery of 7 excise by the wineries from the customers but not crediting the same to the State Exchequer and, thereby, duping the customers and depriving the State of its revenue is illegal. 9. Mr.Wani, Counsel, opposing the applications for the Dealer/original applicant, has stressed that the collection of excise duty is certainly an unjust enrichment. The remission contemplated by the State does not mean that there should be collection of such excise duty from the consumer by the wineries. Mr. Wani has placed reliance to the judgment in the matter of State of Maharashtra and others Vs.Swanstone Multiplex Cinema (P) Ltd ((2009) 8 SCC 235 ) wherein a retention of amount of the exempted tax was held to be an unjust enrichment. The Apex Court directed the State to release the amount to the extent of said respondent as unjustly enriched itself and pay the same to a voluntary or charitable organization. Apart from the State notices to the wineries, it is more than clear on hearing the wineries, the order of the Collector, being appealable, under Section 137 of the Bombay Prohibition Act, a forum is available to the aggrieved wineries. 10. It was pointed out that the time frame given by the Division Bench is not complied with. However, since we are not called upon to deal with 8 the same, we are not addressing to such grievance. The contention of Mr.Deshmukh, Counsel, is that no excise duty was collected by the Mercury Winery Pvt. Ltd., and, if it is so, it should satisfy to the competent authorities, either the Collector of Excise or any person delegated by him. However, for that purpose, modification, which is indeed a review of the order, is not permissible. We do not find anything wrong in the order warranting interference. We are not sitting in appeal over the order of the Division Bench, consequently, in the garb of so called modification, virtually recalling of the order and that too, at the instance of the State, needs simply to be deprecated. No interference in the order is contemplated. Hence, both the applications (Nos.CA NO. 10160/2009 in WP 7033/2007 and CA NO.10161/2009 in WP No.7033/2007) seeking modifications are rejected. (K.U.CHANDIWAL) (P.R.BORKAR) JUDGE JUDGE ... agp/10161-09ca