IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.7015 of 2008 SCI INDIA LIMITED Versus THE STATE OF BIHAR & ORS ----------- For the Petitioner : Mr. Satyabir Bharti For the Respondents 1 to 5: Mrs. Nilu Agrawal, G.A. X & Mrs. Nirmala Kumari, J.C. ------------ P R E S E N T Hon'ble the Chief Justice & Hon'ble Mr. Justice Dr. Ravi Ranjan ------------ Dated, the 11th August, 2008. Counsel for both the parties are ad idem that the issue raised in the present writ petition is covered by the order dated 5th August, 2008 passed in the case of SCI India Limited Vs. The State of Bihar and others (C.W.J.C. No. 7689 of 2008). 2. In SCI India Limited, the matter was considered thus : “5. Rule 33(2) of the Rules framed by the Board of Revenue under Section 91 of the Bihar and Orissa Excise Act, 1940 reads thus: - “33(2) If the report of the officer by whom a consignment of spirits, transported or exported by land, under bond, or duty free, has been gauged and proved on arrival at its destination, should show that wastage to a greater extent than the appropriate allowance specified above has occurred, the distiller or the warehouse keeper shall pay duty at the highest rate for the time being in force on country spirit in any place through which the consignment passes, on so much of the deficiency as in excess of the above allowances : provided that, if it shall be proved to the satisfaction of the Commissioner that such deficiency has been caused by accident or other unavoidable cause, and an application has been submitted within thirty days from the storage of the spirit at its destination, the duty levied on such deficiency shall be refunded. The Commissioner’s decision shall be final.” 6. The petitioner made an application for refund of duty - 2 - amount of Rs.2,55,412.00 on account of loss of rectified spirit (6385.3 LPL of Grade-I) in transit due to accident before the Excise Commissioner, Bihar, Patna. The Excise Commissioner, Bihar, Patna by his order dated 8th December, 2005 rejected that application of refund made by the petitioner. A revision was filed by the present petitioner before the Board of Revenue. The revision came to be dismissed by the Member, Board of Revenue on 26.12.2007.Aggrieved thereby the present writ petition has been filed. 7. The Member, Board of Revenue has held that Rule 33(2) of the Rules framed by the Board of Revenue was not attracted in the fact-situation. It held that the provisions made in Rule 33(2) were applicable only in the case of transportation of the spirit on the ground of duty-free. However, since the petitioner has paid duty for rectified spirit, Rule 33(2) of the Rules is not attracted. 8. The view of the Board of Revenue is apparently inconsistent with the decision of this Court in the case of Nagendra Prasad vs. The State of Bihar and others (C.W.J.C. No. 12072 of 2006) decided on 7th February, 2007. That was a case where the refund of deposit was claimed on the plea that entire quantity of rectified spirit was wasted in course of transportation and no countrymade liquor could be made from that consignment. The application was rejected by the Excise Commissioner as well as by the Board of Revenue holding that Rule 33(2) of the Excise Rules was inapplicable. In the order dated 7th February, 2007 passed by this Court in the case of Nagendra Prasad, the consideration of the matter by the Board of Revenue was recorded thus: “From the order of the Board of Revenue it appears that the petitioner’s claim for refund was rejected mainly on the ground that there was no provision allowing for refund of a deposit made by the settlee either in the Excise Act or the Rules framed thereunder or the terms and conditions of the licence. In fact, on hearing the parties on the previous date (2.2.2005) the Board of Revenue adjourned the proceedings to enable the petitioner to bring to its notice any provision under the Excise Act or the Rules framed thereunder or the terms and conditions of the licence that would justify his claim for refund of the deposit. On behalf of the petitioner reliance was placed on rule 33(2) of the Excise Rules. But the Board of Revenue found it in-applicable to the facts of the present case because rule 33 dealt with the transportation of rectified spirit under a bond and not against any deposit.(Emphasis applied).” - 3 - 9. This Court found the view of the Board of Revenue erroneous and it was held thus: “In our view, the Board of Revenue proceeded in the matter on an erroneous premise. The basic question is not whether there was any provision for refund of deposit under the Excise Act or the Rules framed thereunder or in the terms and conditions of the license but whether the State can levy and collect excise duty on rectified spirit, unfit for human consumption. If it is held that the State Govt. is authorized to levy and collect excise duty on rectified spirit, unfit for human consumption, then there would be no question of any refund of the deposit made by the petitioner. But on the other hand if it is found and held that the State Govt. is not authorized to levy and collect excise duty on rectified spirit, then it would follow that the deposit was in reality excise duty collected in advance on country liquor that would be produced from the rectified spirit. For practical reasons the collection of excise duty in advance on country liquor to be produced from a certain consignment of rectified spirit may be justified and upheld because in a majority of cases rectified spirit actually gets converted into country liquor. But there may be one case in a thousand or even in a hundred thousand where for some unforeseen reason a particular consignment of rectified spirit does not actually gets converted into country liquor. In that case any collection by the State Govt. can not be held authorized and permissible because in reality no country liquor was made. When the issue was posed in this form, the Advocate General fairly accepted that it is no longer resintegra and it is decided against the State in Mc Dowell Company Ltd. Vs. The State of Bihar & Others, 2006(4) P.L.J.R. 269. The Advocate General accepted that in that decision on a consideration of the earlier Supreme Court decisions another Bench of this Court held that the State Govt. has no power or authority to levy or collect excise duty on rectified spirit, unfit for human consumption. In light of the legal position it follows that the amount charged by the State Govt. for issuance of permit for transportation of rectified spirit for manufacture of country liquor is in reality excise duty collected in advance on country liquor that would be produced from that consignment of rectified spirit. In order that the collection should be legal and authorized the rectified spirit must be used for production of country liquor and if for some unforeseen reason that does not happen, the collection would become unauthorized and the depositor would have the right to claim its refund.” - 4 - 10. In the light of legal position expounded by the Division Bench of this Court in the case of Nagendra Prasad, the matter needs re-examination and reconsideration by the Board of Revenue. 3. For the self same reasons, we quash and set aside the order dated 16th January, 2008 passed by the Board of Revenue and restore the revision petition (petition No.38 of 2006) to the Board of Revenue, Bihar, Patna for fresh consideration in accordance with law. 4. The parties shall appear before the Board of Revenue on 8th September, 2008. The Board of Revenue is expected to hear and decide the matter expeditiously, and in no case later than six months from the date of appearance of the parties. 5. No order as to cost. R. M. Lodha, CJ Dr. Ravi Ranjan, J AMIN/-