Case: Industrial Chemical Corporation Vs. Excise Commissioner, U.P., Allahabad

which the section was for the time being in force. By Section 8 the Central Government was authoirsed by notification to direct that any power conferred by the Act, subject to such conditions, if any, as may be specified in the direction, be exercisable by such officer or authority subordinate to the Central Government or such. Provincial Government or such other officer or authority subordinate to a Provincial Government as may be specified in the direction. By Section 10 power was conferred upon the Central Government to make rules for the purpose of carrying into effect the provisions of the Act and in particular for certain specified purposes including the power to licence manufacture of power alcohol, fixing the price at which the power alcohol may be sold, providing for imposing and collecting a duty or power alcohol and prescribing conditions in respect of transport and storage of power alcohol, and for other matters which may be prescribed under the Act. By Clause 10 of the Rules framed under the Power Alcohol Act, it was provided that subject to the provisions of the Act and the rules, the provisions of Chapter IX of the Excise Manual, Uttar Pradesh, Vol. I, shall apply to the manufacture of power alcohol and by-products, storage at distilleries, denaturation, issues, wastages and transport of power alcohol. We are not concerned in this case with the proviso which deals with the modifications in the rule applicable to the State of Bombay. By Section 33 it was provided :-"No person shall be permitted to sell or store for sale power alcohol at any premises which are not covered both by the licence required under the provisions of the Petroleum Act, 1934, and by a licence under these rules in Form P.A. 15.Provided that power alcohol may be issued in limited quantities to a consumer direct from a distiller with the general or special permission of the Central Government or the Power Alcohol Authority of the State concerned on production or a treasury challan in support of pre-payment of Central Excise Duty and the sales tax (if imposed by the Government of the State concerned) or after adjustment of the amount due against on advance deposit by the distillery in any treasury approved for the purpose."It is clear from the provisions of the Indian Power Alcohol Act and the Rules framed under the Act that manufacture, production and disposal of power alcohol are controlled and regulated and that power alcohol may not be issued, stored, denatured or transported otherwise than as provided in Chapter IX of the Excise Manual, U.P. Vol. I, but limited quantities may be issued to consumers direct from a distillery under the general or special permission of the Central Government or the Power Alcohol Authority. Under Rule 2(q) of the Rules framed under the Indian Power Alcohol Act, the Excise Commissioner, U.P. has been appointed as the Power Alcohol Authority.9. The licence in Form L-6 under the Central Excises and Salt Act, 1944, issued to the petitioners merely authorised them to obtain without payment of duty power alcohol for industrial purposes. But the issue of such a licence did not obviate the necessity of complying with the relevant provisions made under the Indian Power Alcohol Act, for the licence under the Central Excise Rules authorises the use of power alcohol obtained without payment of duty, but for obtaining power alcohol, the provisions of the Power Alcohol Act and the Rules have to be complied with.10. The statutory provisions and the Rules issued thereunder which we have set out in detail clearly prescribe that power alcohol may be issued to a consumer direct from a distillery as provided by the proviso to Rule 33 of the Power Alcohol Rules, and to the issue of power alcohol from a distillery in the State of U.P., Chapter IX of the Excise Manual which contains the relevant rules framed under the U.P. Excise Act applies.11. The right to obtain power alcohol directly from a distillery was therefore subject to the provisions of the Indian Power Alcohol Act, 1948, the Rules framed under that Act which incorporated therein the U.P. Excise Manual Chapter IX. The contention of the petitioners that since they obtained a licence in Form L-6 under the Central Excises Act they were entitled to obtain the quantity of power alcohol required for the purpose of their business without any restriction as to the quantity or the conditions as to obtaining permits is therefore wholly without substance. The Excise authorities required the petitioners to obtain permit after "satisfying all other necessary procedural details prescribed." In so directing, the Excise authorities were acting according to law. The contention raised by the petitioners that the provisions of Chapter IX of the U.P. Excise Manual, Vol. I, apply to power alcohol which is intended to be used as fuel and not otherwise, has, in our judgment, no substance. Rules 10 and 33 proviso of the Power Alcohol Rules apply to power alcohol used for all purposes and are not restricted to its use as fuel.12. The validity of Chapter IX of the U.P. Excise Manual which has been incorporated by Rule 10 in the Rules framed under the Indian Power Alcohol Act, has not been challenged before us. It is true that the petitioners had, under Article 19(1)(g) of the Constitution a fundamental right to carry on business of manufacture of Thinners. But that fundamental right is subject to restrictions prescribed under the Indian Power Alcohol Act and the Rules framed thereunder. The reasonableness of those restrictions has not been challenged before us. The only argument advanced by the petitioners in support of the petition is that the Central Government having granted a licence in Form L-6 no further conditions could be imposed restricting the right of the petitioners to obtain power alcohol required by them for the purpose of their business. That contention on the Rules framed under the Power Alcohol Act is wholly unwarranted, and must be rejected.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]This contention is, for reasons to be presently set out, wholly without substance. The relevant statutory provisions and rules framed thereunder which have a bearing on the plea raised by the petitioners may be briefly reviewed.It is clear from the provisions of the Indian Power Alcohol Act and the Rules framed under the Act that manufacture, production and disposal of power alcohol are controlled and regulated and that power alcohol may not be issued, stored, denatured or transported otherwise than as provided in Chapter IX of the Excise Manual, U.P. Vol. I, but limited quantities may be issued to consumers direct from a distillery under the general or special permission of the Central Government or the Power Alcohol Authority. Under Rule 2(q) of the Rules framed under the Indian Power Alcohol Act, the Excise Commissioner, U.P. has been appointed as the Power Alcohol Authority.9. The licence in Formunder the Central Excises and Salt Act, 1944, issued to the petitioners merely authorised them to obtain without payment of duty power alcohol for industrial purposes. But the issue of such a licence did not obviate the necessity of complying with the relevant provisions made under the Indian Power Alcohol Act, for the licence under the Central Excise Rules authorises the use of power alcohol obtained without payment of duty, but for obtaining power alcohol, the provisions of the Power Alcohol Act and the Rules have to be complied with.10. The statutory provisions and the Rules issued thereunder which we have set out in detail clearly prescribe that power alcohol may be issued to a consumer direct from a distillery as provided by the proviso to Rule 33 of the Power Alcohol Rules, and to the issue of power alcohol from a distillery in the State of U.P., Chapter IX of the Excise Manual which contains the relevant rules framed under the U.P. Excise Act applies.11. The right to obtain power alcohol directly from a distillery was therefore subject to the provisions of the Indian Power Alcohol Act, 1948, the Rules framed under that Act which incorporated therein the U.P. Excise Manual Chapter IX. The contention of the petitioners that since they obtained a licence in Formunder the Central Excises Act they were entitled to obtain the quantity of power alcohol required for the purpose of their business without any restriction as to the quantity or the conditions as to obtaining permits is therefore wholly without substance. The Excise authorities required the petitioners to obtain permit after "satisfying all other necessary procedural details prescribed." In so directing, the Excise authorities were acting according to law. The contention raised by the petitioners that the provisions of Chapter IX of the U.P. Excise Manual, Vol. I, apply to power alcohol which is intended to be used as fuel and not otherwise, has, in our judgment, no substance. Rules 10 and 33 proviso of the Power Alcohol Rules apply to power alcohol used for all purposes and are not restricted to its use as fuel.12. The validity of Chapter IX of the U.P. Excise Manual which has been incorporated by Rule 10 in the Rules framed under the Indian Power Alcohol Act, has not been challenged before us. It is true that the petitioners had, under Article 19(1)(g) of the Constitution a fundamental right to carry on business of manufacture of Thinners. But that fundamental right is subject to restrictions prescribed under the Indian Power Alcohol Act and the Rules framed thereunder. The reasonableness of those restrictions has not been challenged before us. The only argument advanced by the petitioners in support of the petition is that the Central Government having granted a licence in Formno further conditions could be imposed restricting the right of the petitioners to obtain power alcohol required by them for the purpose of their business. That contention on the Rules framed under the Power Alcohol Act is wholly unwarranted, and must be rejected.