IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC MONDAY, THE 2ND JUNE 2008 / 12TH JYAISHTA 1930 WP(C).No. 5946 of 2006(G) ------------------------------------- PETITIONER: ------------------ M/S.KAY CEE DISTILLERIES, CHENGALOOR, PUDUKKAD, THRISSUR DISTRICT, A REGD. PARTNERSHIP FIRM REPRESENTED BY ITS MANAGING PARTNER, K.C.PREMAN. BY ADV. SRI.T.A.SHAJI SMT.T.V.NEEMA SMT.RAGAM.S.MOHAN RESPONDENTS: ---------------------- 1. THE EXCISE COMMISSIONER, COMMISSIONERATE OF EXCISE, THIRUVANANTHAPURAM. 2. THE DEPUTY COMMISSIONER OF EXCISE, CENTRAL ZONE, KOCHI. 3. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVT., TAXES DEPARTMENT, GOVT. OF KERALA, SECRETARIAT, THIRUVANANTHAPURAM. BY GOVERNMENT PLEADER SRI.K.V.MANOJ KUMAR - R1-3 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02/06/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) NO.5946/2006 APPENDIX PETITIONERS EXHIBITS EXT.P1:- COPY OF THE LICENCE NO.1/2005 DULY RENEWED UPTO 31.3.2006 OF THE PETITIONER. EXT.P2:- COPY OF THE REQUEST DT. 29.10.05 SUBMITTED BY THE PETITIONER BEOFRE THE IST RESPONDENT. EXT.P3:- COPY OF THE COMMUNICATION DT. 31.1.2006, ISSUED BY THE IST RESPONDENT. /TRUE COPY/ P.A. TO JUDGE tss ANTONY DOMINIC, J ----------------------------------------------------------------- W.P.(C).NO.5946/2006 ----------------------------------------------------------------- Dated this the 2nd day of June, 2008 JUDGMENT Petitioner is a partnership firm owing a Distillery, which has been granted Ext.P1 licence for compounding and blending of Indian Made Foreign Liquor and Imported Foreign Liquor for the purpose of sale. According to the petitioner, the licence has been renewed periodically and is currently valid. It is stated by the petitioner that based on the Trade Mark User Agreement with M/s. Allied Domecq Spirits and Wine(India) Pvt. Ltd., from July, 2001, they have been blending liquor under the brand names Old Smuggler VSOP Brandy and Old Smuggler Mature XXX Rum. It is stated that due to poor response in the market, as on 1.4.2004 they were left with a quantity of Rs.12414 BL of brandy and 1389 BL of Rum. WP(c).No.5946/06 2 2. According to the petitioner, based on a mutual understanding between the parties, the Trade Mark User Agreement had been terminated with effect from 31.3.2004. As a result of the termination of the agreement, the petitioner is not in a position to dispose of the stock available with them and therefore the quantity referred to above, is still lying undisposed of. In view of the above situation, petitioner submitted Ext.P2 request to the first respondent seeking permission for reblending the aforesaid stock of liquor. 3. The request in Ext.P2 was considered and by Ext.P3 the petitioner has been intimated that the request cannot be considered for the reason that there is no rule permitting reblending of Indian Made Foreign Liquor. It is in this background this writ petition has been filed challenging Ext.P3 and for directing the first respondent to grant permission to the petitioner to reblend and convert the aforesaid quantity of liquor stocked in its blending tanks to one of the existing brands manufactured by the petitioner WP(c).No.5946/06 3 as requested in petitioner in Ext.P2 representation. 4. Respondents 1 and 2 have filed a detailed counter affidavit. In the counter affidavit filed they are mainly taking the stand that there is no provision for permitting reblending a brand of Indian Made Foreign Liquor into another one. It is stated that if the reblending as sought for by the petitioner is allowed, that will provoke other manufacturers to seek permission to reblend unsold brands of Indian Made Foreign Liquor into other marketable brands. 5. I heard the counsel for the petitioner and also the learned Government Pleader appearing on behalf of the respondents. 6. The fact that the petitioner had a Trade Mark User Agreement on the basis of which, the petitioner had manufactured the brands of liquor referred to above and that as on 1.4.2004, balance stock as referred by the petitioner is available with it, are not in dispute. On the other hand the only issue is as to whether in view of the WP(c).No.5946/06 4 rules as referred to above, the petitioner can be permitted to reblend Indian Made Foreign Liquor so as to convert the same into a marketable brand. The blending and compounding of Indian Made Foreign Liquor is covered by the provisions contained in the Kerala Foreign Liquor (Compounding, Blending and Bottling) Rules, 1978. Detailed provisions have been made in the rules for blending and compounding of Indian Made Foreign Liquor under the strict supervision of the Excise Officers, who are already posted in the premises of the distillery in question. 7. In this case what has happened is that, spirit is blended into two brands as Indian Made Foreign Liquor and by virtue of the termination of the Trade Mark User Agreement the petitioner is not in a position to market the liquor produced by them. It is in these circumstances the petitioner is seeking permission of the respondent to blend the available stock into different brands of Foreign Liquor that is manufactured by them. WP(c).No.5946/06 5 8. The Rules not contemplate a situation as is now canvassed by the petitioner. But, it is to be noticed that they also does not impose any prohibition in considering the request for blending as sought for by the petitioner. In such circumstances, I see no justification for the stand adopted by the Department. If the request is not accepted, the only course open to the petitioner is to destroy such huge quantity and suffer the entire loss. On the other hand if the blending is permitted and liquor is allowed to be sold by the petitioner, the Government will also be benefited and such unnecessary waste can be avoided. In the absence of the prohibitory rule contained in the Kerala Foreign Liquor (Compounding, Blending and Bottling)Rules, 1975, and as the respondents have no case that it is not technically feasible, I am of the view that the matter needs to be reconsidered. In view of the above, I quash Ext.P3 and direct that the first respondent shall consider the matter in the light of the WP(c).No.5946/06 6 observations made here-in above, within 6 weeks from the date of production of a copy of the judgment. ANTONY DOMINIC JUDGE vi. WP(c).No.5946/06 7