( Second Edition - 2003 )

manual

STATE RECEIPT AUDIT MANUAL

STATE EXCISE DUTIES

OFFICE OF THEPRINCIPAL ACCOUNTANT GENERAL (AUDIT), PUNJAB & UT, CHANDIGARH.

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PREFACE

The Manual has been prepared for the guidance of those entrusted with the audit of State Excise receipts and refunds. In this book, the basic provisions of Excise Duties and Fees including rules and executive instructions issued by the Excise and Taxation Commissioner, Punjab, have also been incorporated. As this manual is in no way a substitute for the original law and is exclusively meant for departmental use, it may not be quoted as reference in the course of audit. Such references should always be made to the Sections of the Act/Rules or proper orders of the Excise and Taxation Commissioner, Punjab.

2. State Receipt Audit Wing headquarters will be responsible to keep this book up-to-date. The Section Officers, Assistant Audit Officer, Audit Officer and the Sr. Audit Officer of the field parties will bring to the notice of Headquarters Section State Receipt Audit Wing any inaccuracy or omission or orders which have become obsolete or which require amendment.

Y.C. SATYAWADI,

Principal Accountant General (Audit) Punjab & UT

CHANDIGARH

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CONTENTS

Pages

Chapter-I Constitutional Provisions 1

Chapter-II The Excise Department – the nature of Excise Receipts and some important definitions.

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Chapter-III Supply and distribution of molasses for distillation

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Chapter-IV Breweries 30

Chapter-V Excise Bonded Warehouse 36

Chapter-VI Winery 41

Chapter-VII Wholesale Vends of Bhang 45

Chapter-VIII Medicinal and Toilet Preparations 48

Chapter-IX District Excise Office 53

Chapter-X Excise and Taxation Commissioner’s Office

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Chapter-XI Offences and Penalties 73

Chapter-XII Searches, Seizures and Confiscations 78

Chapter-XIII Miscellaneous Provisions 83

Appendices 86

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CHAPTER-I CONSTITUTIONAL PROVISIONS

Introductory:

1.1. The power of the State Government to levy and collect the State Excise duties is derived from Article 246 of the Constitution of India and entry 51 of List II – State List of Seventh Schedule thereto.

Basis of levy and collection:

1.2. The following Central and State Laws and the Rules made thereunder govern the levy and collection of excise duties and other excise receipts like fees, fines etc.

Central Laws:

(a) Central Laws:

(i) The Opium Act, 1978 and rules made thereunder seeking to control the cultivation of poppy and manufacture of opium therefrom.

(ii) The Dangerous Drugs Act, 1930 and rules made thereunder seeking to suppress contraband traffic and control the abuse of dangerous drugs, especially those derived from opium, Indian Hemp.

(iii) The Medicinal and Toilet Preparation (Excise Duties) Act, 1955 and rules made thereunder providing for levy and collection of duties of excise on medicinal and toilet preparations containing alcohal opium, Indian hemp or other narcotic drugs.

State Laws:

(b) State Law:

(i) The Punjab Excise Act, 1914 and the rules made thereunder to regulate the production, manufacture, possession,

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transport, purchase and sale of intoxicating liquor and drugs, the levy of duty of excise and countervailing duties on alcoholic liquors, production and distribution of power alcohol.

(ii) The East Punjab Molasses (Control) Act, 1948 and the rules made thereunder.

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CHAPTER-II THE EXCISE DEPARTMENT, THE NATURE OF EXCISE

RECEIPTS AND SOME IMPORTANT DEFINITIONS

Organization:

2.1. The organization of the Excise and Taxation Department is patterned on a three tier administrative system, i.e. State level, Division level and district level. A brief description of the official hierarchy at the three levels is as follows:-

A – State Level:

The department is headed by the Excise and taxation Commissioner, who is assisted by the Joint Excise and Taxation Commissioner, who has certain definite delegated statutory powers apart from the duties of supervision and control of work relating to the various taxation Acts. In addition there are officers of other categories designated and appointed for various specific jobs and duties. These other officers and their jobs are as under:-

(i) The Deputy Excise and Taxation Commissioner (Distilleries) has been appointed to discharge the functions of a Collector throughout the State of Punjab. He also supervises the functioning of the distilleries and Breweries in the State.

(ii) There is an enforcement organization headed by the Deputy Excise and Taxation Commissioner who is assisted by Excise and Taxation Officers with their supporting staff.

B – Division level:

There are three divisions in the State and each division is controlled by a Deputy Excise and Taxation Commissioner (Division). Apart from carrying out some statutory functions, he is empowered and charged with the administration of various taxation measures in his division. He acts as co-coordinating and supervising officer for the districts in his division. There is an officer of the same rank, viz., Deputy Excise and

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Taxation Commissioner, who is exclusively doing the judicial and appellate work under the various taxation measures in his division. There is also a small divisional enforcement unit manned by the officer of the rank of an Excise and Taxation officer for enforcing the taxation measures.

All the Deputy Excise and Taxation Commissioners are appointed to discharge the functions of a collector under the said Act throughout the districts under their respective charge except the powers under section 79 of the said Act.

C – District Level:

Each district is under the charge of an Assistant Excise and Taxation Commissioner. These Officers are charged with the responsibility of administering all the taxation measures in the district as a primary unit. The lower hierarchy in the field consists of the Excise Inspectors, who are the inspecting and enforcing staff.

Classes of Excise Revenue:

2.2. Nature of Excise Taxation:- Receipts on account of Excise revenue may be broadly divided in to the following categories:-

*(i) Duties;

**(ii) License fees which are of the following kinds:-

(a) fixed fees;

(b) assessed fees;

(c) fees fixed by auction.

(iii) Cost price of intoxicants and opium.

(iv) Miscellaneous receipts such as composition fee, sale proceeds, fines and confiscations and receipts for service rendered.

* Section 31 of the Punjab Excise Act, 1914 and the Punjab Excise Fiscal Orders, 1932. ** Rule 24 of the Punjab Liquor Licensee Rules, 1956.

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Kind of duties leviable

2.3. The duties on the following are imposed in Punjab:-

(i) On Indian made foreign liquor imported into or manufactured in Punjab and issued from distilleries, affixed still head duty calculated in terms of proof litre of the strength of London proof.

1(ii) On country liquor plain or spiced imported into or manufactured in Punjab and issued from distilleries and bonded warehouses, a fixed duty calculated per proof liter.

2(iii) On spirits manufactured in distilleries and exported to places outside the State, a fixed export duty per proof litre.

3(iv) On Indian made beer imported into or manufactured in Punjab and issued from breweries, a fixed duty per bottle of 650 ml. Dependable on its alcoholic strength.

(v) On medicinal and toilet preparation containing alcohol, duties at the rates given in the Schedule appended to the Medicinal and toilet Preparations (Excise Duties) Act, 1955.

4 (vi) Fixed duties by weight on ‘bhang’ issued to licensed vendors from warehouses.

5 (vii) On Excise opium issued from a Government treasury, a fixed duty by weight collected before issue.

6(viii) On bhang exported from warehouse or places of collection in certain districts on pre-payment of affixed duty by weight of in certain cases after execution of bond for subsequent payment.

Section 32 of the Punjab excise Act, 1914. 1 Order 1 The Punjab Excise Fiscal Orders, 1932. 2 Order 1-A, ibid. 3 Order 5 ibid. 4 Section 32, The Punjab Excise act, 1914 and Order 7 ibid. 5 Section 32, ibid. 6 Order 7, ibid.

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2.4. Definitions:

1. ‘Absolute Alcohol’ means alcohol of a strength containing not less than 99.5 per cent by volume of Ethyl alcohol as measured at 60 degree F. For medicinal use absolute alcohol conforms to the standards laid down in the approved pharmacopocine.

2. ‘Alcohol’ (a) in a popular usage means pure ethyl alcohol (C2H5OH2) and includes all dilutions and mixtures of this substance (including liquors intended for potable use containing alcohol).

(b) ‘Alcohol’ means ethyl alcohol of any strength and purity having the chemical composition C2H5OH2.

3. ‘Alcoholic litre’ means a litre with reference to alcoholic contents of the spirit.

4. ‘Attenuation’. The attenuation of the wash, is the number of degrees on the saochan metre by which the highest or initial gravity and the final or lowest one differ.

5. ‘Beer’ means any liquor prepared from malt or grain with or without the addition of sugar and hopes and includes ale, porter and stout.

6. ‘Bhang’ means the dried leaves of hemp plant whether male or female and whether cultivated or uncultivated.

7. ‘Blending’ means the mixing together of two or more liquors of different strength of a different qualities.

8. ‘Bonded Manufacturing’ means the premises or any part of premises approved and licenced for the manufacture and storage of medicinal and toilet preparations containing alcohol, opium, Indian hemp and other narcotic drugs or narcotic on which duty has not been paid.

9. ‘Bub’ is a composition, itself in a State of fermentation prepared for addition to wash, to promote fermentation.

10. ‘Bulk litre’ means a litre with reference to the bulk or quantity of the contents.

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11. ‘Cooler’ means any vessel into which worts are passed to be cooled; and includes a refrigerator.

12. ‘Copper’ means any vessel in which either worts or water is boiled or heated in the course of brewing.

13. ‘Country liquor’ means all liquor other than rectified spirit, denatured spirit and perfumed spirit not included in the definition of foreign liquor and also includes ‘lahan’.

14. ‘Denatured’ means rendered unfit for human consumption in such manner as may be prescribed by the State Government by a notification in this behalf.

15. (1) “Excisable article” means-

(a) any alcoholic liquor for human consumption; or

(b) any intoxicating drug.

(2) ‘Distiller’ means a person who produces distilled spirits or who brews, makes mash, wort or wash, fit for distillation or production of spirits or who by any process of evaporation separates spirit from any fermented substance, or who, making of keeping mash, wort or wash has also in his possession or use a still suitable for production of spirits.

17. “Feints” means that portion of the distillate from the low wines which is considered unfit by reason of its impurities collected in the spirit receiver.

18. ‘Fermenting vessel’ means any vessel in which worts are fermented by the action of yeast.

18. 1 “Foreign liquor” means-

(a) all liquor (other than country liquor, rectified spirit, denatured spirit and perfumed spirit), imported into India, on which customs duty is leviable under the Indian Tarrif Act, 1934 (XXXII of 1934) or the Customs Act, 1962 (52 of 1962).

(b) all liquor manufactured in India (other than rectified spirit denatured spirit, and perfumed spirit), on which duty at a rate higher than that levied on Country liquor is leviable; 1 The Punjab Liquor Definitions, 1954.

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(c) all beer (including ale, porter and stout) manufactured in India or abroad, and

(d) all sacramental wine prepared from pure dried grapes by a process of fermentation only without the addition of alcohol or any other ingredient.

19. 1‘Gravity’ means the proportion which the weight of a liquid bears to that of an equal bulk of distilled water the gravity of distilled water at 5.15o C (60o F) being taken to be 1000o.

20. ‘Hopback’ means any vessel into which worts are run after boiling in order to remove the spent hops.

21. ‘Hops’ means the ripe female flowers of the hop plant or its other parts used in brewing for giving bitter taste to beer and for preserving and clarifying it.

22. “Intoxicant” means any liquor or intoxicating drug.

23. “Intoxicating drug” means:-

(i) The leaves, small stalks and flowering or fruiting tops of the Indian hemp plant (Cannabis Sotiva L.) including all forms known as bhang, saddhi or ganja;

(ii) Charas, that is, the resin obtained from the Indian hemp plant, which has not been submitted to any manipulation other than those necessary for packing and transport;

(iii) any mixture, with or without neutral materials, of any of the above forms of intoxicating drug, or any drink prepared therefrom; and

(iv) any other intoxicating or narcotic substance which the State Government may, by notification, declare to be an intoxicating drug, such substance not being opium, coca leaf, or a manufactured drug, as defined in section 2 of the Dangerous Drugs Act, 1930.

24.2‘LAHAN’ means any solution made from any kind of gur or molasses or both :-

1 Rule 2, the Punjab Brewery rules, 1956. 2 Section 3 of the Punjab Excise Act, 1914.

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(i) to which a fermentation agent has been added to promote fermentation; or

(ii) which has undergone the process of fermentation; and from which spirit can be obtained by distillation. 25. “Liquor” means intoxicating liquor and includes lahan and all liquid consisting of or containing alcohol; also any substance which the State Government may by notification declare to be liquor for the purposes of this Act. 26. 1 “Low Wines” means impure spirits produced from the first distillation of the wash in a pot still. 27. “Manufactury” means the room of building specified in the licence for manufacture of an excisable article. 28. “Malt” means the basic germinated grain used for brewing obtained as a result of diastatic fermentation or subjecting grain to the process of stooping and couching. 29. “Malt whisky” means whisky manufactured from malt only. 30. “Malt whisky” means whisky manufactured in wood for a period of not less than two years. 31. 2‘Mashtun’ means any vessel in which malt or grain is exhausted in the course of brewing. 32. 3Narcotic drugs or narcotics means a substance other than alcohol which when swallowed or inhaled by, or injected into human being induces drowsiness, sleep, stupefaction or insensibility in the human being. For purposes of Medicinal and toilet preparations (Excise Duties) Act, 1955 it should also be a dangerous drug within the meaning of Dangerous Drug Act, 1930.

33. 4Obscuration. The difference caused by the Caramel in solution, between the true strength of spirit and that indicated by the hydrometer is termed obscuration.

1 The Punjab Distillery Rules, 1932. 2 Rules 2 The Punjab Brewery Rules, 1956. 3 Section 2 Medical and Toilet preparation (Excise Duty) Act, 1955. 4 Defined in Revenue Audit Manual, Uttar Pradesh – State Excise – First Edition, 1977

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34. 1 “Permit” means a no objection statement issued by the Collector of the district of destination concerned or an officer authorised in this behalf in the import and transport of liquor, but not empowered to authorise its removal from the place of issue. This term is also used for permits authorising possession of liquor exceeding the limit of retail sales.

Permits are issued in form ‘L32’.

35. 1 “Pass” means a document which actually authorises the removal of liquor.

Passes are issued in form L-34.

Passes for removal of bulk spirit and bottled spirit from a distillery are issued in form ‘D-20’ and ‘D-20-A’, respectively.

36. 2 ‘Plain spirit’ means spirit to which no flavour has been communicated and to which no flavouring or colouring matter or other material or ingredient has been added.

37. 2‘Patent still’ includes any part of a still and any apparatus whatever for distilling or manufacturing spirit other than indigenous pot still.

38. 2‘Pot still’. Still and any apparatus for distilling or manufacturing spirit through indigenous system is known as pot still.

39. 2‘Reduction of liquor’ means the reduction of liquor from a higher to a lower strength by the addition of water.

40. 3 “Racking or settling back” means any vessel into which worts are passed from a fermenting vessel and rackied either at once or after a time into store vats or casks.

1 Rules 1 – The Punjab Liquor Permit and Pass Rules, 1932. 2 Derined in Revenue audit manual, Uttar Pradesh, State Excise Duty – first Edition 1977. 3 Rule 2 – The Punjab Brewery Rules, 1956.

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41. 1 “Receiver” means and vessel into which the wort of a still discharges.

42. 1“Rectified Spirit” means sprit of a strength of 43 degrees or more over proof.

43. 1“Spirit” means both finished and unfinished spirit.

44. 1“Special spiced spirit” means spiced spirit approved by the Excise commissioner for issue as special spiced spirit. In includes matured spirit more than two years old.

45. 1“Spiced spirit” means spirit redistilled after the addition of flavours and spices to plain spirit.

46. 1“Spent less” means the residue left after unfinished spirit has been redistilled.

47. 1“Spend wash” means the residue left after the wash has been exhausted of spirit.

48. 2 “To guage” means to determine the quantity of liquid that is, or can be contained in or taken from a receptacle.

49. 2To prove” means to test the strength of spirit by a Hydrometer or other instrument prescribed by the Excise Commissioner.

50. “Under back” means any vessel into which worts run either from the mushtun or hopback.

1 “Vat” means any fixed vessel used for storage of spirits alcohol or liquor in a distillery warehouse or excise depot. In includes tanks made of metal.

51. 1“Wash” means a saccharine solution from which, after distillation spirit is obtained.

1The Punjab Distillery Rules, 1932. 2 Defined in revenue Audit Manual, Uttar Pradesh State Excise Duty – first Edition 1977.

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52. 1“Worts” means the liquor obtained by the exhaustion of malt or grain or by the solution saccharine matter in the process of brewing.

2Note : Mechanism of gauging and proving:

Vessels used are receptacles for spirit and constructed of any material approved by the Excise commissioner. Generally, however, receptacles are made of wood or steel, proper arrangement is made for gauging to determine the quantity of liquid that is inside or can be contained in or taken from a receptacle by means of a dipping rod, which is brought into use after it has been verified and approved by the Officer-in-charge. Gauge tables are prepared showing the number of bulk litters contained in each vessel when filted to every tenth of an inch. Gauge register of receivers and vats is compiled in form D-5 and D-6 from the figures obtained in the gauging of vessels. Since the levy of excise duty is dependent on the strength of spirit, i.e. alcoholic contents in the bulk, gauging and proving of spirit is essential at the time of production, receipt and issuance thereof. The bulk contents are ascertained by dipping rod with reference to gauge register. The strength or proof of the spirit is detained by measuring the indication of the spirit by a hydrometer and taking its temperature and referring to a temperature indication chart which gives the strength corresponding to any particular indication and temperature.

1 Defined in Revenue Audit Manual, Uttar Pradesh State Excise Duty – first Edition 1977. 2 Rule 62 to 66 and 84 of the Punjab Distillery Rules, 1932.

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CHAPTER – III DISTILLATION

A – Supply and distribution of molasses for distillation:

3.1. The supply and distribution of molasses in Punjab is governed by the East Punjab Molasses (Control) Act, 1948 and the Punjab Molasses (Control) Rules, 1962. The salient features of the Act and Rules are given below.

3.2. Definitions:

(a) 1‘Molasses’ means the heavy dark coloured residual syrup drained away in the final stage of the manufacture of sugar by vacuum pans or in open pans in sugar factories either from sugarcane or by refining gur; when such syrup has a density of not less than 75 degrees brix and a fermentable sugar content (expressed as reducing sugars) of 19 per cent.

(b) Controller2 means the Excise and Taxation commissioner, Punjab.

(c) ‘Brix’3 is the density of solutions expressed on brix densitomatric scales and is taken to represent the percentage of dissolved solid matter in it.

3.3. Preservation of Molasses:

Every sugar factory shall store4 molasses in Steel tanks or pucca covered tanks or other receptacles and take all reasonable precautions to ensure that the quality of molasses does not deteriorate on account of intake of water or other impurities through any preventable cause or the quantity of molasses does not decrease by leakage and shall observe all instructions issued by the Controller from time to time.

1 Section 2(c) – The East Punjab Molasses (Control) Act, 1948. 2 Section 2(b) of the East Punjab Molasses (Control) Act, 1948. 3 Para 3.2. of Revenue Audit manual Uttar Pradesh – State Excise Duty, first Edition – 1977. 4 Rule 9-The Punjab Molasses (Control) Rules, 1962.

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3.4. The occupier and the manager of the factory shall1 afford all reasonable facilities in the matter of inspection of premises, stocks, registers, accounts, maintained by him and in the matter of taking samples by the officers of the Punjab Excise and Taxation and Department not below the rank of an Excise Inspector.

3.5. Supply and Distribution – Save in accordance with a written permit issued by the Controller no person shall2 :-

(i) move molasses by road, rail, river or other means : or

(ii) sell or otherwise dispose of molasses to any person other than the government or a person licensed by the Government in this behalf.

The Controller may, by order require the occupier of any sugar factory to sell and supply in the prescribed manner such quantity of molasses to such person as may be specified in the order and the occupier shall comply with the order.

3.6. The price3 at which and the manner in which different grades of molasses may be sold are regulated by the Government.

3.7. The Government may, by notification make rules prescribing4 the specifications and tests in respect of the purity of molasses and regulate the taking of sample of molasses.

3.8. Statements and records of molasses. – The following statements/records have been prescribed under the Punjab Molasses (Control) Rules, 1962.

(i) From M.C.1. – Estimated requirements of molasses during the twelve months commencing from the first January to be submitted by the distillery to the Controller.

(ii) Form M.C.2. – Estimated production of molasses during the following cane-crushing season to be submitted by the Sugar factory to the Controller. 1 Rule 10 – The Punjab Molasses (Control) Rules, 1962 2 Section 4-The East Punjab Molasses (Control) Act, 1948 3 Section 5 – The East Punjab and rule 6 of the Molasses (Control) Rules, 1962 4 Section 13 ibid 3, Rule 3 ibid

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On receipts of estimates, the controller prepares a consolidated statement showing the requirements of each distillery indicating the sugar factories from which these requirements are to be met and makes a provisional allotment of molasses to each distillery.

(iii) After the close of the cane-crushing season, every sugar factory shall furnish to the Controller a report in form M.C. 3 showing the total production of molasses within a week of the close of every crushing season.

The Controller may call for revised requirements of molasses of the distilleries in form M.C. 4 and on receipt thereof, the provisional allotment may be made final, with such modifications as the Controller may consider necessary. The final allotment of molasses shall be communicated to all concerned.

(iv) The owner of occupier of a sugar factory shall maintain correct account of production and sale of molasses in form M.C. 5 and furnish return in form M.C. 6. 1

Every distillery shall furnish to the Controller a weekly return in Form M.C. 7 showing2 receipts and consumption of molasses.

3.9. Audit Checks (Molasses). – In the audit of accounts of molasses in a distillery, the following audit checks should be exercised among others:-

(i) Whether the distillery has submitted a statement in form M.C. 1 to the Controller of Molasses specifying its estimated requirement of molasses for the purposes of distillation during the next following molasses year should be seen.

(ii) The requirement of molasses of the distillery form M.C. 1 (indent) should be co-related with the allotment made by controller of Molasses and account of receipt of molasses in form M.C. 7 with a view to seeing that the quantity allotted has been received in full by the distillery and that there is no pilferage.

1 Rule 14(1) ibid 2 Rule 14(2) ibid

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(iii) It should be checked that no molasses supplied to an allottee have been used for a purpose other than that for which it was allotted or that no molasses were transferred to any other person without the prior permission of controller of Molasses.

(iv) The correctness of the records of all molasses received, utilized for distillation and the balance in the register in Form M.C. 7 should be checked.

(v) Disposal of molasses or articles forfeited under the Excise Act or Rules should be checked to see if such disposal is in accordance with the Rules. Any sum of money received on this account is creditable to the head “0039 – state Excise – Other receipts”.

(vi) The loss of molasses either during transit or during storage in a distillery should be examined and suitably commented upon.

8 – DISTILLERIES

General :

3.10. Definition of distillery. – ‘Distillery’ means the manufactory where spirits are distilled, compounded, blended, processed, fortified and/or diluted to produce wines of Indian liquor other than arrack, beer, or toddy and includes an operation for bottling of such liquor.

3.11. Distillation. – Separation of the constituents of a liquid mixture by partial vaporization of the mixture and separate recovery of the vapour and residue is known as distillation. The more volatile constituents of the original mixture are obtained in increasing concentration in the vapour, the less volatile remaining in greater concentration in the residue. The apparatus or equipment in which this process is carried on is called a ‘still’. The essential parts of a still are :

(1) the kettle in which the vaporization is affected, (2) the connecting tube or column conveying the vapours and (3) the condenser in which the vapour is liquefied. Modifications involving

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the addition of other parts to the still are introduced for various purposes, such as, the conservation of heat and to effect rectification. The fact that it is difficult to secure alcoholic concentrations in excess of 12-14 per cent by fermentation alone necessitates the application of a process of distillation for production of stronger liquors.

3.12. Fermentation. – Fermentation is an obscure and seemingly spontaneous change or decomposition which takes place in most vegetable and animal substances when exposed at ordinary temperatures to air and moisture. While the term ‘fermentation’ when broadly used “covers decay and purification also, it has been used in this manual in the restricted sense of the process for producing alcohol and alcoholic liquors from succhariferous mashes”.

3.13. Distillery Licences. – (i) Any person desiring to obtain a license for a distillery shall submit an application1 in form D-1 to the Collector. The Excise Commissioner has full powers to grant or refuse application for licence.

(ii) No licence shall be granted unless and until the applicant, therefore has:-

(a) deposited a sum of four lakh2 rupees in cash as licence fee.

(aa) deposited as security in cash or in National Saving certificate fee the fulfillment of all the conditions of his licence a sum of rupees one lakh in amount or given a bank guarantee of a scheduled Bank as security for an amount equivalent to the aforesaid sum for aforesaid purpose.

(b) Satisfied the (Excise commissioner) that the proposed buildings, plant and apparatus to be used in connection with the business of distillery storage and issue of spirit are built in accordance with the prescribed regulations and the precaution has been taken against fire; but in respect of the present buildings, plant and apparatus of existing distilleries, which do not conform with the

1 Rule 3 of the Punjab Distillery Rules, 1932. 2 Rule 4 of the Punjab Distillery Rules, 1932.

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provision of these rules, the Excise Commissioner may, in testing, grant exemption from the operation of any of these rules.

(iii) The licensee shall execute1 a bond in Form D-3 pledging the premises, stock of spirit, stills, all apparatus and utensils employed in the manufacture and storage of spirit for the due discharge of all payments which may become due to Government. With the sanction of the Excise Commissioner, the licence may, in lieu of executing such a bond, deposit Government promissory notes (or in National Savings Certificates) of such value as the Financial Commissioner may direct. A deposit made under this rule shall be separate and distinct from the security deposit specified in sub-para (ii) (aa) above.

Period of licence:

(iv) A licence granted under the rules shall be valid2 for a period of one years from the date of issue unless it is cancelled, determined or surrendered earlier and shall be renewable annually on the application of the licensee of payment of one thousand rupees.

Provided that such a licence may be cancelled for breach of the terms thereof or may be determined by the Excise Commissioner, after giving the licensee 6 months’ notice.

An application for the renewal of the licence shall be made at least 90 days before the expiry of the old licence.

Provided that if such application is not made within such period the Excise Commissioner may renew the licence on payment of the fee chargeable for a new Licence.

Overtime fee:

3.14. In case the distillery remains open for work on a public holiday or on any other day being a holiday in Government officers provided notice is given to the Excise and Taxation officer or in his absence of the excise Inspector of the distillery at least 24 hours before the public holiday or the holiday as the case may be

1 Rule 6 of the Punjab Distillery Rules, 1932 2 Rule 7 ibid

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and a fee1 of Rs.2000 per day or past of a day is paid to Government.

Explanation. – “Open for work” shall mean any normal operation connected with the distilling and bottling of spirit and includes the fermentation of bub or wash (and issue spirit).

Office Incharge of distillery:

3.15. For the purpose of ensuring the due observance of rules and for watch and ward and control of distilleries the Excise Commissioner appoints2 an Excise and Taxation Officer and Excise Inspectors and other staff in each distillery. The Deputy Excise and Taxation Commissioner (Distilleries) supervises the functioning of distilleries in the State.

Records of distillery:

3.16. (i) a list of registers maintained in a distillery and reference to the Punjab Distillery Rules, 1932 under which they are maintained is given at appendix ‘A’.

(ii) The provision with regard to the upkeep of Buildings, Plant, Stills Receivers, charges and Store vats are contained in Rules 42 to 94 of the Punjab Distillery Rules, 1932.

Control over manufacturing process of spirit:

3.17. (i) Manufacture of Spirit. – The licensee is required to enter in register in Form D-8 (Licensee General Register) the exact quantity of gur, molasses or other substance used. When wash is to be prepared, the licensee is required to give notice to the officer-in-charge for the verification of the quantity. The entires for the preparation of bub are made in form D-10 (Bub Register). As soon as wash is ready for gauging/proving it is entered in the Main Wash Register in form D-11. The officer-in-charge on the receipt of intimation proceeds to verify the same and enters the results in his diary in form D-9. The accounts of distillery operations are kept in form D-12 (Abstract of distillery operations). As soon as wash is fully attenurated and ready for distillation, the licensee again informs the officer-in-charge who by gauging and use 1 Rule 32 ibid. 2 Rule 13 ibid.

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of the Sacharometre and alcoholometre ascertains the specific gravity of the attenurated wash and records the particulars in his diary.

(Rule 70, 72, 73, 74, 75, and 86 of Punjab Distillery Rules, 1932.)

(ii) The spirit whether finished or un-finished, produced1 by any one distillation, shall be run into an empty receiver of receivers and such spirit shall be gauged and proved by the Inspector, in the presence of the licensee or a responsible representative deputed by him for this purpose in the receiver or receivers of the still or set of stills in which it is produced, before it is passed out of such receiver or receivers or mixed with spirit produced by any other distillation.

Table Books:

3.18. No receptacle (vats/receivers, etc.) of which contents are estimated by a gauge rod shall be brought originally into use till it has been gauged2 and passed by the Inspector and table books in form D-5 (bub and Fermentation wash) and D-6 (Spirit receiver vats) have been prepared. In case any receptacle is repaired it cannot be brought into use again unless it has been regauged and passed by the Inspector and revised table books in form D-5 and D-6 have been prepared.

3.19. Dip measurements need close scrutiny in audit as these form the basis of all quantitative accounts within the distillery.

Outturn of spirit:

3.20. The prescribed outturn of spirit and stocks of spirit and distillery base have been dealt within Rule 35 to 37 ibid with a view to seeing that outturn commensurate with the wash sent in for distillation and that the wash is thoroughly exhausted of spirit, the result of each single distillation is required to be gauged and proved immediately after it is completed. The object is to see whether the working of the still is efficient in as much as the spirit outturn is not below the minimum yield prescribed in Rule 35 and 37 ibid. In case the outturn is below the minimum prescribed yield, the variation has to be explained by the licensee.

1 Rule 84 ibid. 2 Rule 6 ibid.

21

Kinds of Receipts:-

State Excise Receipts:

3.21. In the distillery, the following State Excise receipts are mainly realised:-

(a) License fee and renewal fee.

(b) Overtime fee.

(c) Still head duty on (i) Country liquor, (ii) Rectified spirit, (iii) Indian made foreign liquor, (iv) Indian made rum issued to troops.

(d) Assessed fee on denatured spirit.

(e) Manufacture and export duty on all issues of country liquor, rectified spirit, Indian made foreign liquor and denatured spirit when issued to any other State or Union Territory in India.

Issues and Payment of Duty Fee:

3.22. (i) No spirit shall be issued1 except under a distillery pass granted by the inspector in form D-20 or D-20-A.

A distillery pass for the removal of spirit fit for human consumption may be granted only in favour of the persons specified in Rule 1(a) to (h) of Rule 115 of the Punjab Distillery Rul;es 1932.

(ii) Every application for a distillery pass for the removal of spirit shall be made in writing to the Inspector, and shall be accompanied by the certificate or permit required under the relevant rules, such certificates or permit being either a general one for the purpose of removals to be made from time to time or a special one for the purpose of a single removal.

If the applicant tenders cash2 in payment of still head duty the Inspector shall after ascertaining that the licensee’s price has been paid, fill up the challan, for presentation with the cash, at the treasury or sub-treasury of the district in which the distillery is situated. The applicant shall present the treasury receipt in token of

1 Rule 117 ibid. 2 Rule 118 ibid.

22

his having paid the duty and the inspector shall affix it to counter foil of Form D-20 or D-20-A.

(iii) If in removing spirit from the distillery as an agent for a licensed vendor, the licensee prefers not to pay duty at the time, he may remove the spirit subject to the adjustment of such duty against an advance1 payment made by him into the Government Treasury account of the duty recoverable on such removals. Such an advance payment shall be not less than Rs. 2,000 and each time an advance is replenished, it must be by a sum that will bring it up to at least Rs. 2,000. The Treasury Officer will keep the Inspector informed of all payments credited to an advance, and the Inspector shall maintain a statement in Form D-15 showing such payments and the duty debitable against them. He shall balance this statement on every day on which the distillery is open for the issue of spirit, and on every such day shall inform the licensee of the balance standing to his credit, and he shall permit the removal of spirit of which the duty is debitable against the advance only as long as the balance is not exhausted.

(iv) In addition to the methods described above spirit may be removed from a licensed distillery2 (a) free of duty in bond; and (b) on the execution of a bond in form D-19 for the payment of duty, Removals under (a) require in each case the sanction of the Collector, which payments of duty in arrears under (b) can only be authorised by the Financial Commissioner.

(v) If the Inspector is satisfied3 that applicant is entitled to remove spirit and the still head duty or export fee has been paid or accounted for in one of the methods prescribed above he shall issue the spirit. At the same time he shall make over a pass in the form prescribed (form D-20) sending a duplicate to the Inspector of the district of destination.

Audit checks on receipts:

3.23. It has to be checked in audit that duty/export fee or assessed fee on the issues are being levied and realised at the correct

1 Rule 120 ibid. 2 Rule 121 ibid 3 Rule 122 ibid.

23

rates in force from time to time. Some of these levies are realised in cash by means of treasury challans while other levies are realised from the Advance Deposit Account D-15 or the distillery. It has to be ensured that the amount has either been deposited in cash through challans or actually deducted from the Running Deposit Account of the distillers. Since all issues of spirit from a distillery are made against passes in form D-20 or D-20-A, so these need a very close scrutiny with reference to permits and treasury challans.

Audit checks on records:

3.24. Records maintained in the distillery and audit checks thereon. – (i) The terms and conditions of licence granted should be seen generally to find out whether they were adhered to by the distiller.

(ii) In the Advance Deposit account D-15, the advances are realised through deposit in State Bank of India/Treasury and credited to the accounts of distiller. As and when duty/export fee, etc. is levied, the amount is deducted from the standing advance and the balance is struck. The challans in token of having made the deposits have to be checked with reference to the records maintained in the Treasury Office.

(iii) It has to be seen whether the spirit outturn is commensurate with the raw materials used (vis wash sent in for distillation) as per provisions of Rules 35 and 37 of the Punjab Distillery Rules, 1932, for this D-8 (Licence General Register) D-10 (Bub-Register) D-11 (Wash register) D-12 (Abstract or distillery operations) and D-9 (Inspector’s Diary) have to be scrutinized. It has also to be checked whether all the production has been taken to register of receipt of spirits maintained in form D-13.

3.25. Sometimes spirits are received from other distilleries and these are entered in form D-13-A (register of receipt and disposal of spirit received in bond from the distilleries). It has to be seen that receipts of spirit are also taken into stock in D-13 (Register of receipt of bulk into the spirit store room and the issue of bulk and bottled spirit from the store room). The receipt entries in D-13. A register should be verified with the Excise passes issued by the Excise Officer of the exporting State. It should also be ensured

24

that one copy of the verified pass has been duly returned to the distilleries from where these have been received.

Wastage allowance:

3.26. The following scales of wastage1 allowance for spirit are prescribed for a distillery licensed in Punjab:-

Wastage allowance in case of:

Spirit store-room

Bottling operations

Bottled spirit-room

Re-distillation

1. 2. 3. 4.

2 percent 1.5 percent 1 percent 1 percent

The above scales will apply both to country spirit and Indian made foreign spirit. Where the wastage of spirit exceeds the prescribed limit duty on wastage of each kind of spirit, for which a separate rate of duty is fixed will be calculated separately, but, for this purpose, various brands of Indian made foreign spirit, which are chargeable to the same rate of duty, will be taken up together.

(ia) Wastage shall be calculated for each month, but the charge on account of duty shall be made at the end of the financial year and the distilleries shall be allowed to set off the results of the month, in which the wastage of spirit was less than the prescribed scale against those of the months in which the wastage exceeds this scale.

If it is found that the wastage in any distillery is excessive, the licensee shall pay duty2 as on issue, in respect of all losses attributed to a wastage in excess of the scale fixed.

(ii) The above scale will apply both to country spirit and Indian made foreign liquor. Where the wastage of spirit exceeds the prescribed limit, duty on wastage of each kind of spirit, for which a separate rate of duty is fixed, will be calculated separately, but for

1 Rule 101-A ibid. 2 Rule 101 ibid.

25

this purpose, various brands of Indian made foreign spirits which are chargeable to the same rate of duty, will be taken up together.

(iii) Wastage shall be calculated for each month but the charge on account of duty shall be made at the end of the financial year and the distilleries shall be allowed to set of the results of the month in which the wastage of spirit was less than the prescribed scale, against those of the months in which the wastage exceeds this scale.

The figures of wastage in various operations shall be worked out in forms D-26, D-27, D-28 and D-29.

(iv) In audit it has to be seen that wherever there is excess wastage, statements have been prepared and sent to the Excise Commissioner and duty has been realised from the licensee for the quantity of excessive wastage at the prescribed rates.

(v) In case extraordinary wastage of spirit occurs in a distillery owing to any cause, an enquiry into the circumstances shall be made immediately under the orders of the Collector of Financial commissioner, and, if it is found that the wastage was due to preventable causes, which the licensee should have foreseen or guarded against, and that the spirit was required to meet a demand, made on the distillery the meeting of which was delayed by reason of the loss, the licensee shall, if directed to do so by the financial Commissioner, pay all or such part, as seems reasonable, of the duty that would have been recovered on the wasted spirit if it had been issued.

(Rule 102 of the Punjab Distillery Rules, 1932.)

3.27. Allowance for loss in transit. – (i) Allowance for loss in transit. An allowance is made for the actual loss in transit by leakage, evaporation or other unavoidable causes of spirit transported or exported under bond.

The scale4 of wastage allowance per cent for spirit conveyed in (a) wooden, (b) metallic vessels is as follows:-

4 Rule 16(iii) of the Punjab Liquor Permit and Pass Rules, 1932.

26

(a) (b)

For a journey taking not more than 2 days 2 ½

For a journey taking more than 2 days, but not more than 9 days

3 1

For journey taking more than 9 days, but nor more than 18 days

4 1 ½

For journey taking more than 18 days 5 2 No scale of wastage is prescribed for bottled spirit.

Breakages shall be satisfactorily explained in the remarks column in Form L-38.

Explanation. – In calculating the time taken by a journey, the day of receipt at the destination but not the day of dispatch shall be included.

(ii) When the liquor is transported under bond (Form L-37), the licensee is1 required to furnish a certificate (Form L-38) from the Collector of the District of destination. If the certificate shows a deficiency greater than that allowable as noted above, then unless the said deficiency is satisfactorily explained, the Collector shall obtain the orders of the Financial Commissioner for charging duty at the rates for the time being fixed under the Act.

In all cases of issues of spirit under bond, the return of Certificates (Form L-38) should be checked to ensure that duty stands charged/explained for any excessive transit losses.

(iii) If the temperature of the spirit on arrival at its destination is found to be lower than the temperature when dispatched, a further allowance shall be made (if required to cover any wastage that has occurred) of 0.9 per cent for every degree centigrade (0.5 per cent for every degree Fohrenheit) of difference between the two temperatures.

(Rule 16 of the Punjab Liquor Permit and Pass Rules, 1932).

Insert:- Re-distillation losses have been incorporated under Punjab Govt. notification dated 29.6.99 @ 1 %.

1 Rule 14,15 and 16 of the Punjab Permit and Pass Rules, 1932. (2) and (3) definition at (I) and (M) of the Punjab Distillery rules, 1932.

27

Denatured Spirit: 3.29. The procedure for denaturation of spirit is laid

down in Rule 95 to 100; Punjab Distillery Rules, 1932. The licensee provides a special room for the storage of denaturing agents and vessels and respectacles used in the process of denaturation and the process is carried out in this room and in the presence of the Inspector. After the denaturation is completed the denatured spirit shall be immediately issued and stored in a special room which shall be secured with double locks one of which shall be a revenue Lock, key of which shall remain with the Inspector. The account of denatured spirit shall be kept in form D-16 and will be issued against passes after levy and charge of prescribed fees as in the case of other spirits.

Pipe Line wastages: 3.30. Wastage of spirit transferred through pipelines. –

In the audit of distilleries, it has been noticed that generally the quantity of spirit actually received in the bottling section through pipe lines is short of the quantity transferred from the blending section of the distillery. Duty on wastage of spirit transferred from one section to another through pipeline within the distillery premises is chargeable from the distilleries as rules do not provide for any free allowance in this regard and such cases need to be scrutinized closely.

Export of liquor from Punjab to other State: 3.31. (a) It has been decided by the State Government

that (i) export of liquor from the licensed distilleries in Punjab and (ii) import of liquor into the State should be allowed against following kinds of permits:- Sr. No.

Kind of Permit Name of the State export to and import from which can be made against permit mentioned in Col. 2.

1. Import-in-bond permit in case of which no excise duty is payable.

Bihar, West Bengal, Andhra, Assam, Rajasthan, Himachal Pradesh, Delhi, Andaman and Nicobar Islands, Mysore, Jammu and Kashmir, Uttar Pradesh.

28

2. Pre duty paid permits in which case duty has already been paid in the importing State at the rate prevalent there.

All States in India.

3. Permits in which case duty is paid in the exporting State at the rate prevalent in the importing State for subsequent payment to the State of import by book adjustment under the principle “Duty follows consumption”.

Uttar Pradesh and West Bengal.

(Memorandum No. 4272-MSII, dated the 21st December, 1961, from the Excise and Taxation Commissioner, Punjab, to all the Deputy Excise and Taxation Commissioners in Punjab).

(b) Extension of privilege of export of liquor in bond from Punjab to Goa:

Government have accorded permission for the export of Indian made foreign spirit free of duty to Goa from the distilleries of Punjab on the principle of “Duty follows consumption” with effect from the financial year 1965-66.

(Memorandum No. 631 X.S.II, dated the 11th February, 1965, from the Excise and Taxation Commissioner, Punjab).

(c) A manufacture and export duty at the prescribed rates shall be levied on all duty paid or under bond issues of country spirit, rectified spirit, Indian made foreign liquor, beer and denatured spirit to any other State or Union Territory in India from any of the distillery, wholesale vend or warehouse in Punjab.

The rates of manufacture and export duty for the year 1997-98 to 2001-2002 have been given in Appendix ‘B’.

(ii) Procedure for issue:

The distillery pass for removal of spirit shall be issued in favour of a person holding a permit signed by the Collector or

29

officer duly authorised in that behalf for export of such spirit to any union territory or State in India after the prescribed excise duty and manufacture and export duty has been levied and paid. Consignments of spirits shall be issued under export in bond authorities in form L-36 granted by the Collector of the district in which the distillery is situated. Further the distiller shall execute and give a bond in form L-37binding himself to produce in respect of each consignment to be dispatched a certificate in Form L-38 signed by the Collector/authorised officer of the State/district of destination showing that the delivery has occurred in full within the period of the currency of the pass and also binding himself to pay such duty as may be demanded from him under the rules in respect of the consignments not delivered or less delivered at the place of destination. On the receipt of correct certificate in form L-38 the bond in form L37 shall be discharged failing which duty shall be charged for the quantities not delivered or less delivered.

Audit Checks:

In audit it should be checked that the consignments of spirit have been issued on the receipt if authorities in form L-36. The manager of the distillery has executed bonds in form L-37 in respect of each consignment for export out of Punjab State and all the bonds have been entered in the prescribed register and are discharged on the receipt of valid certificates in form L-38. In cases where the certificates show deficiency greater than allowable as transit losses, duty has been charged on the quantities less delivered.

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CHAPTER-IV BREWERIES

4.1. ‘Brewery’ means a building where beer is manufactured and includes every place therein where beer is stored or issued.

Brewery licence:

4.2. (i) The Punjab Brewery Rules, 1956 lay down the rules regarding establishment of breweries, manufacture and issue of beer. Any person desirous of obtaining a licence for a brewery shall1 apply to the Excise Commissioner, who has full powers to grant or refuse application for licence with reference to the requirement of the State. The licenses are granted in form “B-I” for a period of one year from the date of issue.

(ii) No licence “in form B-I” shall be2 granted until the applicant therefore has:-

(a) deposited a sum of Rs. 25,000 in cash as license fee;

(b) deposited as security the specified amount in the prescribed manner. The amount of security fixed by the Commissioner shall not be less than Rs. 2,000 or more than Rs. 5,000.

(iii) The licensee shall execute a3 bond in form B-3, pledging the premises, stock of beer, all apparatus and utensils employed in the manufacture and storage of beer for the due discharge of all payment which may become due to Government. The licensee may, however, in lieu of executing such a bond, execute a bond in form B-16 and deposit government promissory notes or NationalSaving Certificates of such value as the Financial commissioner may direct or furnish a guarantee by the State Bank of India in form B-17 to the satisfaction of the Financial Commissioner. A deposit made under this rule shall be separate and

1 Rule 3 of the Punjab Brewery Rules, 1956. 2 Rule 5 of the Punjab Brewery rules, 1956. 3 Rule 6 of the Punjab Brewery Rules, 1956.

31

distinct from the security deposit mentioned in the preceding para 4.2 (ii).

(iv) The licence granted is1 renewable annually in the prescribed manner on the payment of five hundred rupees:

Provided that such a licence may be cancelled for breach of the terms thereof or may be determined by the Financial Commissioner after giving the licensee six months notice.

Note:-The Brewery licence (form B-1) is granted to work a brewery and to bottle beer made therein. This licence does not authorise any kind of vend of beer for sale. Consequently the brewery manager has to obtain a licence in form L-I for wholesale to trade only under the provisions of the Punjab Liquor Licence Rules, 1956 in the prescribed manner.

Excise Inspector-in-charge of the brewery:

4.3. Control of the brewery. – The brewery is placed under the charge of an Excise Inspector designated as officer-in-charge of the Brewery who works under the supervision of the Deputy Excise and Taxation Commissioner (D) who conducts imspection of breweries and examines premises and warehouse connected therewith.

Control over manufacturing process:

4.4. Working of the brewery. – The brewery is required to2 send to the officer-in-charge 48 hours before brewing a written notice of his intention to brew. The brewer is also required to keep a3 Book in Form B-5 (Brewing Book) in which he enters separately the quantity malt, corn, sugar, hops and hop substitutes which he intends to use in his next brewing and also the day and hour when such next brewing is intended to take place. The brewer enters the dip and the gravity of warts produced from each brewing and also the description and number of vessels into which the warts have been conveyed in the brewers book. The account of the produce of

1 Rule 8(i) ibid. 2 Rule 29 (8) ibid. 3 Rule 29 to 34 ibid.

32

each brewing is kept separate till an account regarding bulk and gravity of each has been taken by the officer-in-charge.

Records of brewery:

4.5. Records maintained in the brewery. – The following records are maintained by the officer-in-charge of the brewery:-

Sr. No.

Form No.

Particulars Reference to the Rule of the Punjab Brewery Rules, 1956.

1. B-4 Register of Gauging Tables Rule 26.

2. B-5 Brewing Book Rule 29

3. B-16 Survey Book Rule 35

4. B-11 Abstract of Brewing operations Rule 35(4)

5. B-12 General Register Rule 16 & 21

6. B-14 Quarterly statement showing the quantity of beer issued to troops and other States

Rule 35(4)

7. B-15 Register regarding issue of beer Rule 35(5)

8. B-15-A

Register showing the amount of duty realised

Charge of duty and allowable wastage:

4.6. (i) The1 duty on beer at the prescribed rate shall be charged on the total quantity actually brewed as entered in the brewing book by the licensee or as ascertained by the Inspector and entered in his survey book in Form B-6, whichever is higher, less an allowance of 8 per cent for wastage.

(ii) The duty on beer shall become due immediately the account of brewing has been taken by the Inspector. An account of

1 Rule 35 ibid.

33

duty to be realised on collection of daily brews shall be maintained by the Inspector in the register in form B-15-a.

(iii) The Financial commissioner, may, however, cause the charge to be made up at the close of each quarter in respect of all the brewings within the quarter, and may, if the licensee executes a bond in form B-16 for its payment, refer the payment to a date not later than the fifteenth day of the month succeeding the quarter in respect of which the duty was charged. The Inspector shall at the end of each quarter prepare Beer Duty Voucher in form B-7 and shall cause a notice in form B-8, to be served upon the licensee for the payment of the amount.

(iv) At the end of each quarter the Inspector shall prepare an abstract of brewing operations in form B-11 and a statement, showing the quantity of beer issued to troops in Punjab and other States in B-15 in form B-14 during the quarter. The abstract and the statement shall be submitted to the Collector concerned who after check will forward them to the Financial commissioner.

(v) The Inspector shall also maintain a register in form B-15 showing issue of beer made to other States.

The proviso to order No. 5 of the Punjab Excise Fiscal Orders, 1932 lays down that while assessing duty on beer manufactured in any quarter, in accordance with the aforesaid provisions, beer issued in bond during the quarter shall be deducted from the total quantity brewed and the ten per cent wastage allowance shall be calculated on the balance thus arrived at.

Refund of Excise Duty on Beer:

4.4. If the licensee objects to the amount of duty demanded from him, he may move the collector to revise the charge, after making the full payment of the sums demanded from him under Rule 35. In the event of the original charge being found incorrect any duty levied in excess from the licensee shall be1 refunded to him.

1 Rule 36 ibid.

34

When beer, on which duty has been paid, becomes1 unfit for human consumption, or is destroyed while on the entered premises of the licensee, by accident or fire or other unavoidable cause, the Financial Commissioner may on receipt of a formal claim from the licensee through the collector order a remission or refund of duty. But no refund will be given if there is reason to believe that the beer has been spoiled more than six months before it was brought to notice. When the refund is in respect of beer unfit for human consumption will be allowed as soon as the Excise and Taxation Officer furnishes a certificate in form B-9 or B-10 that the beer has been either (i) destroyed in his presence or (ii) distilled or (iii) turned into vinegar.

4.8. The rates of Excise duty leviable on beer as sanctioned by the State Government during the years 1997-98 to 2001-2002 have been given in Appendix ‘C’.

Overtime fee:

4.9. The Punjab Distillery rules have been made applicable to the Breweries in so far their working overtime and on holidays concerned. (In this connection please refer to para 3.15 of this Manual).

[Excise and Taxation Commissioner, Punjab, Memorandum No. 4705-X(IV)76/3119, dated 22nd dJune, 1976.]

Audit Checks:

4.10. Audit checks. – In audit of a brewery the following audit checks are to be exercised:-

(i) The brewer’s licence in the prescribed form B-1 on the payment of the prescribed licence fee has been renewed in time.

(ii) The entries made by the brewer in the brewing book in form B-5 are promptly and correctly made. These should be checked with the survey book Form B-6 maintained by the Inspector, as the duty on beer is charged on the total quantity actually brewed as entered in the brewing book of the survey book which ever is higher.

1 rule 37 ibid.

35

(iii) No words are removed from the brewery until an account of them has been taken.

(iv) the produce of each brewing as shown in the brewing/survey book has been taken over in the registers of brewing operations and issues in form B-11 and B-15.

(v) In the case of export out of Punjab necessary bonds in form L-37 have been executed and the certificates in form L-38 are furnished.

(vi) The rates of duty and export fee in the case of issues outside the State are correctly applied with reference to the orders for the time being in force.

Duty voucher in form B-7 and notices in form B-8 should be checked in detail.

(vii) In the case of breweries, excise duty is to be charged immediately the account of brewing has been taken after allowing an allowance of eight1 per cent for wastage, provided that the quantity of beer issued in bond during a quarter shall be deducted from the total quantity brewed and ten per cent allowance is to be calculated on the balance thus arrived at. It should be ensured that wastage allowance has been calculated in accordance with the provisions of Punjab Brewery Rules, 1932 and Punjab Excise Fiscal Orders, 1932.

1 Rule 35(1) of the Punjab Brewery Rules, 1956.

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CHAPTER-V EXCISE BONDED WAREHOUSES

Definition:

5.1. 1“Bonded warehouse” means a warehouse licensed by the Financial commissioner for the receipt, storage under bond of liquor, both bottled and bulk of Indian manufacture, transported or imported into Punjab from any place within the Indian Union, as approved by the Punjab government, for its reduction, bottling, transport or export in bond, or on payment of duty within or outside the State.

Grant of Licence:

5.2. (i) The application for the grant of licence shall be made in form B.W.H. 1 and the licence shall be in form B.W.H. 2. The financial Commissioner may grant the licence subject to the2 deposit of security not exceeding Rs. 25,000 in amount of execution of a bond in form B.W.H.3 (or the giving of a bank guarantee of scheduled Bank) for the same amount as security, for the fulfillment of all the conditions of the license.

The licence may be3 granted or renewed on payment of Rs. One lakh as licence fee for a period not exceeding one year and the 31st March following the date of grant:

Provided that before the grant or renewal of the licence, the licensee shall be required to furnish a security in addition to one mentioned above, equivalent to 25 per cent of the amount of Excise Duty on the maximum quantity of foreign liquor allowed to be stored at any one time. The security shall be furnished in cash, or in the shape of saving certificates or bank guarantee of a scheduled bank or by hypothecation of assets. The maximum quantity of liquor allowed to be stored by the licensee shall be fixed by the Financial commissioner on an application made by the licensee before the grant or renewal of the license. 1 Section 22 of the Punjab Excise Act, 1914 read with Rule 1 (ii) of the Punjab Excise Bonded Warehouse Rules, 1957. 2 Rule 3 ibid. 3 Rule 4 ibid.

37

Receipt and verification of consignments.

5.3. Liquor may be1 obtained on bond without the payment of duty from any distillery, brewery or winery in Punjab or outside on the authority of a permit issued by the Excise and Taxation Officer in-charge of the district.

No liquor shall be received in the bonded warehouse unless accompanied by a pass from the Officer-in-charge of the distillery (brewery or winery) from which it has been imported or transported.

Immediately on arrival of a consignment at the bonded warehouses the Officer-in-charge shall be informed and the consignment shall not be opened until the same has been2 examined and verified with the pass by the Officer-in-charge who shall also note the results in the register maintained for the purpose in form B.W.H. 8 (Register of receipts and disposal of liquor) and also on the pass of receipt covering the consignment. One copy of the pass with entries shall be immediately returned to the Officer, who issued the pass, and the other copy with entries thereon shall be kept in the warehouse.

Wastage Allowance:

5.4. A3 wastage allowance not exceeding ½ per cent shall be made for the actual loss in transit by leakage or breakage or vessels or bottles containing liquor. The allowance shall be determined by deducting from the quantity dispatched, the quantity received at the destination, both quantities being stated in terms of proof liters of spirit contents or in case of beer in bulk liters.

If the report of the Officer-in-charge shows that the wastage exceeds the prescribed limit, the licensee shall be4 liable to pay duty at the prescribed rate as if the wastage in excess of the prescribed limit had actually been removed from the warehouse:

1 Rule 6 ibid. 2 Rule 7 ibid. 3 Rule 8 ibid. 4 rule 9 ibid.

38

Provided that each case of excessive wastage shall be reported to the Financial Commissioner, for orders, who may in his discretion, on good cause being shown, remit the whole or part of the duty leviable on such wastage.

Procedure for issue and maintenance of accounts:

5.5. (i) An1 account of all receipt into and issues of liquor from the warehouse shall be maintained in registers in forms B.W.H. 8, D. 13, D. 13-B, D. 14, D 1 A,B. 15 and B. 15-A. All issues shall be made only on application by the licensee, bearing necessary court fee stamps.

(ii) No liquor shall be2 removed from the warehouse until it has been checked and proved by the Officer-in-charge and a transport of export pass in form D-20 or L-34 as the case may be, has been granted. Such passes shall only be issued on the proof of execution of bond by the licensee or on production of treasury receipt showing that the required amount of duty has been paid into the government Treasury.

In case of issue of liquor under bond, the licensee shall execute a bond in form L-37 to deliver the spirit at a particular place or destination and shall furnish proof on his having done so, before the bond can be discharged.

(iii) The procedure for the3 adjustment of duty on the issues of beer against advance payment is the same as described in Para 3.22. (iii) of this manual.

(iv) The Officer-in-charge shall4 maintain a diary in form D-9 in which he shall record from day to day, all entries regarding operations carried on the warehouse. He shall maintain a general register in Form B.W.H. 4.

Stock taking:

5.6. 5Stock taking of liquor, both bottled and bulk, shall be made by the Officer-in-charge on the last working day of each

1 Rule 17 ibid. 2 Rule 20 ibid. 3 Rule 22 ibid. 4 Rule 30 ibid. 5 Rule 24 ibid.

39

month after all the transactions for the day have been completed. This stock would also be checked on the last working day of each month by the Excise and Taxation Officer in whose district the bonded warehouse is situated.

Bottling:

5.7. (i) Bottling operations shall be carried out in separate rooms for country spirit and Indian made foreign liquor and likewise storage of these liquor shall be effected in separate rooms called the bottled spirit store room for country liquor and Indian made foreign liquor set apart for the purpose, near the respective bottling rooms. The licensee shall set up such apparatus for filtering, bottling and processes connected therewith as may be needed. Bottling vats may be erected and liquor stored therein in the bottling rooms.

(ii) The rules prescribed for bottling of liquor in the Punjab Distillery Rules and the Punjab Brewery Rules shall1 apply mutatis mutandis for bottling of liquor in the warehouse.

(iii) In all matters not2 specified in these rules, the Punjab Distillery Rules, and the Punjab Brewery rules shall apply mutatis mutandis.

5.8. The list of registers prescribed for maintenance at a Bonded Warehousse has been given in Appendix ‘D’.

Audit Checks:

5.9. While conducting the audit of bonded warehouses the following audit checks should be exercised.

(i) Licence fee and renewal fee have been correctly paid.

(ii) The quantity account of spirit received from the distillery have been correctly maintained in form B.W.H. 8. The receipt entries should be checked with the passes issued by the Officer-in-charge of the distillery or bonded warehouse from which it has been imported. 1 Rule 41 and 42 ibid. 2 Rule 54 ibid.

40

(iii) Whether the wastages claimed are within the permissible limits and in cases of excessive wastages, duty has been levied as on issues.

(iv) The issues should be checked with the applications of the licensee and treasury challans to ensure that correct duty has been realised on all issues. The payment of duty should also be verified with the records maintained in the treasury office.

(v) In respect of bonded warehouses where rectified spirit is received in bulk and bottling operations are conducted in its premises the relevant provisions of the Punjab Distillery Rules, 1932 and audit checks prescribed in Chapter-III should be applied mutatis mutandis.

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CHAPTERVI WINERY

6.1. “Sweets”1 means any liquor, which is made from fruit and sugar, or from sugar mixed with any other material, excluding malt or grain and which had undergone a process of fermentation and includes wines made wines mead and metheglin. Use of other alcohol is permitted for the sole purpose of fortification. Fortification of wines is also permitted with the fruit spirit or brandy produced by distillation through a pot-still in the winery itself.

6.2. Licence and Licence Fee:

Any person desirous of the obtaining a licence for the manufacture of sweets shall apply to the (Excise Commissioner). The application shall be accompanied by a full description hereinafter called the entry of his premises and utensils in which, the purpose of, and the distinguishing marks on each room, place and vessels shall be clearly specified.

(i) The (Excise Commissioner) has full powers to grant or refuse applications for licenses with referance to the requirements of the state (ii) No licence shall be granted for the manufacture, storage, or issue of sweets in premises already used as distillery. No licence shall be granted unless the applicant has deposited license fee in cash as under

Sr. No.

Capacity (Bottles of 650 mili liters)

Annual licence fee

1. Upto 5000 Bottles Rs. five thousand only

2. 5001 to 10,000 Rupees ten thousand only

3. Above 10,000 Rupees twenty thousand only

1 Rule 2 of the Punjab (Sweets) Manufacture Rules, 1955.

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A licence granted under these rules shall be valid for a period of one year from the date of issue unless it is cancelled, deferred or surrendcred earlier and shall be renewable (annually by the excise commissioner) on the application of the license on payment of renewal fee as under

Sr. No.

Capacity (Bottle of 650 mili liters)

Annual licence fee

1. Upto 5000 Bottles Rupees two thousand five hundred only

2. 5001 to 10,000 Rupees five thousand only

3. Above 10,000 Rupees ten thousand only.

Provided that such a licence may be cancelled for breach of term there of or may be determined (Excise commissioner) after giving the licensee six month’s notice.

(iii) An application for the renewal of the licence shall be made by the licensee to the Excise Commissioner so as to reach him 60 days before the expiry of the license provided that if such application is not made within such period the (E.C.) may renew the licence on payment of the chargable fee for new licence.

Records:

6.3. An “entry book for makers for sale of sweets” in1 form S-3 is required to be maintained by the licensee at the winery.

This book is in four parts:

Part – I Material used and still sweets produced.

Part-II Still sweets for conversion into sparkling sweets and sparkling sweets produced.

Part-III Sweets issued for consumption.

Part-IV Duty paid sweets returned in portable condition.

1 Rule 17 Punjab (Sweets) Manufacture Rules, 1955.

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Levy and Payment of duty:

6.4. (i) Duty on1 issues is calculated according to the strength declared by the licensee and verified by the Excise Officer empowered in this behalf by the Collector. In the case of disagreement between the licensee and the Excise Officer, the duty is to be calculated according to the strength declared by the Chemical Examiner to government, Punjab. No sweets is issued unless the strength has been tested and declared.

The licensee shall furnish to the Collector each day a true2 return in form S-4. (Return of the quantity of Sweets issued) stating whether any sweets have been removed from the licensed premises during the day.

The duty on sweets shall become3 due at the time when the sweets are issued from the licensed premises and the licensee shall at the time of making the return aforesaid pay to the Collector the amount appearing in the return to be due in respect of duty on sweets so issued during the period to which the return relates.

(ii) The Excise and Taxation Commissioner may, if he thinks fit, 4defer payment of duty on any sweets to a date not later than the 15th day of the month succeeding the month in which the sweets are removed from the licensed premises provided the licencee, executes a bond in form D-19 mutatis mutandis.

(III) Remission of Duty:- When the licensee proves to the satisfiction of the Collector

that any sweets, after having heen removed from the licensed premises, have been returned to him as unfit for consumption then any duty-paid or charged in respect of those sweets shall be remitted:

Provide always that – (a) Notice that the sweets have been returned as aforesaid

must be given to the Collector or any officer authorized by the Collector, on their being received by the licensee; and

1 Rule 17(f) ibid. 2 Rule 18 ibid. 3 Rule 19 ibid. 4 Rule 21 ibid.

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(b) Proper facilities must be provided for the examination of the sweets by the said officer;

and unless the requirements aforesaid are complied with or unless the Collector in any special case thinks fit to dispense with such compliance, duty shall not be remitted.

Audit Checks:

6.5. (i) The manufacture and issue entries in the entry book (form S-3) needs to be checked as per provisions of Rule 17 and it may be ensured that duty stands charged on all issues.

(ii) The Punjab Sweets (manufacture Rules 1955 do not contain any provision for wastage allowance, either in store room, or during bottling operation or in the bottled spirits store room. Wastages if any should be checked and it may be ensured that duty has been charged on the inadmissible wastages.

(iii) Receipts should be checked with reference to the treasury challans and records maintained at Treasury.

(iv) It needs to be ensured that remissions, if any, have been allowed in accordance with the provisions of Rule 22.

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CHAPTER – VII WHOLESALE VENDS OF BHANG

7.1. The licences for wholesale vend of Bhang are granted1 on the basis of licence fee fixed by open auction and the bid in the auction is in terms of money. The procedure for holding auctions and conditions as to auction as, described in Para 9.3. of this manual, also apply mutatis mutandis in the case of auction of Bhang shops.

The highest successful bidder for a licence for wholesale vend of Bhang in form H-26 shall deposit one-sixth of the annual licence fee within seven days of the auction and shall pay the balance amount in ten equal monthly installments by the 7th day of each month beginning from April. If the successful bidder fails to make the deposit of one-sixth of the total licence fee or if he refuses to accept the licence, the Collector may resell the licence by public auction of by private contract and any consequential loss of revenue to Government shall be recoverable2 from the defaulting bidder as arrears of land revenue.

7.2. The licensee shall maintain daily account of sales made by him and of his balances in stock Register in form H-30. He shall prepare and submit to the Excise and Taxation Officer of the district a monthly abstract of his receipts and sales in form M-73.

7.3. The rate of Excise Duty on the Bhang imported into, exported outside and/or transported within the territories of Punjab shall be Rs. 20 per ten kilogram or less.

Provided that-

(a) When the same consignment of Bhang is

(i) imported and exported; of

(ii) imported and transported; or

(iii) transported and exported; of

1 Rule 2 & 7 of the Punjab Supply and Sale of Bhang Rules, 1955. 2 Rule 12(iii) of the Punjab Supply and Sale of Bhang Rules, 1955.

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(iv) transported or retranported, in the course of the same or a continuing business transactions duty shall be levied once only in respect of the whole of such transaction;

(b) no transport duty shall be levied on Bhang transported from one place to another situated within the limits of the same district;

(c) duty shall be calculated on gross weight of each parcel or package of Bhang imported, exported or transported.

Order No. 6 of the Punjab Excise Fiscal Orders, 1932 as substituted, - vide Notification No. CSR 269/PAI/1488-31, 32 and 56, dated 14th November, 1962.

7.4. The retail sale and private possession of Bhang in any quantity has been prohibited in the State, with effect from the 1st April, 1965. The wholesale Bhang Licensee shall, however, sell Bhang to the following only:-

(a) Such licensees as are licensed under the Medicinal and toilet Preparations (Excise Duties) Act, 1955, 1 holding a permit to transport Bhang within Punjab in form H-21 prescribed under the Punjab hemp Cultivation and Bhang Permit and Pass Rules, 1955.

(b) Any person authorized to possess2 Bhang for scientific purpose holding transport permit in the above referred to Form H-21.

7.5. The licensee may supply3 Bhang to other States or Union Territories in India, against export4 in bond pass in form H-23 prescribed under the Punjab Hemp Cultivation and Bhang Permit and Pass Rules, 1955.

The licensee is authorized to export Bhang to countries outdise India, against export authorisation, issued by the Narcotics Commissioner to the Government of India, under the Dangerous Drugs (Import, Export and Transhipment) Rules, 1957.

1 Condition No. 4 of the licence in form H-27. 2 Condition No. 5 of the licence in form H-27. 3 Rule 7 of Punjab Hemp Cultivation and Bhang Permit and Pass Rules, 1955. 4 Condition No. 3 of the licence in form H-27.

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The State Government has framed the following Rules on the subject:-

(i) The Punjab Bhang Import, Export, Transport and Possession Orders, 1955.

(ii) The Punjab Hemp Cultivation and Bhang Permit and Pass Rules, 1955.

(iii) The Punjab Supply and Sale of bhang Rules, 1955.

7.6. Audit Checks. – It has to be checked that –

(i) Licence fee fixed by auction is paid in prescribed instalments by the due dates.

(ii) The duty is levied on the quantity imported into exported outside or transported within the territories of Punjab at the prescribed rates.

(iii) The challans for the payment of licence fee/duty are verified with the treasury records.

(iv) In case of export-in-bond of Bhang it should be verified that a certificate to the effect that the quantity covered by pass in Form H-23 has been received in full is issued by the authorised officer of the State of destination, otherwise duty should be recovered under the law.

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CHAPTER-VIII MEDICINAL AND TOILET PREPARATIONS

Basis of Duty

8.1. The levy of duty on medicinal and toilet preparations containing alcohol, opium, Indian hemps or other narcotic drugs or narcotics falls within the legislative purview of the Parliament, - vide entry No. 85 of the Union list embodied in the seventh schedule of the Constitution of India. The Parliament enacted the Medicinal and Toilet Preparations (excise Duty) Act, 1955 and Central Government has framed the Medicinal and Toilet Preparations (Excise Duty) Rules, 1956 providing for the manufacture of such preparations and the levy of duty thereon. The State Excise Department, however, administers the above Act and Rules for the purposes of levy and collection of duties on medicinal and toilet preparations and retains the proceeds thereof.

Salient features of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955.

8.2. Some of the important features of the Act and rules made thereunder are as follows:-

Licence necessary for manufacturing

(i) Under section 6 of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 no dutiable good can be manufactured without an appropriate licence granted in accordance with the rules framed thereunder. However, the manufacture of medicinal and toilet preparations which do not contain narcotic drugs or narcotics and fall within the definitions of “manufactured drugs” as given in Dangerous Drugs Act, 1930, has been exempted from the purview of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. The licences for the manufacture of dutiable goods are issued on furnishing the necessary security and on payment of prescribed fee as laid down in Rules 83 and 96 of the Medicinal and Toilet Preparations (Excise Duties) Rules 1956.

Manufacture in Bond:

(ii) (a) Where the medicinal and toilet preparations are manufactured in bond the excise duty is leviable in the State in

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which such goods are released from a bonded warehouse for home consumption whether such State is State of manufacture or not.

Manufacture not in bond:

(b) Where the medicinal and toilet preparations are not manufactured in bond the duty is levied in the State in which such goods are manufactured. 1 [Section 3 of the Medicinal and Toilet Preparations (Excise duties) Act, 1955].

Restricted and unrestricted preparations:

(iii) (a) The duty leviable on medicinal and toilet preparations has been prescribed in the Schedule to section 3 of the Act. For the purpose of levy of duty the medicinal preparations have been classified in two broad categories viz “Restricted preparations” i.e. capable of being consumed as ordinary alcoholic beverages and “unrestricted preparations” i.e. any medicinal preparations containing alcohol but other than a restricted preparation of spurious preparations. On restricted preparations the rate of duty is higher than on unrestricted preparations.

(b) The classification of medicinal and toilet preparations into “restricted preparations” and “unrestricted preparations” is done by the Central government on the advice of a Standing Committee. List of restricted and unrestricted medicines has been given in the Schedule attached to the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956. However, all medicinal preparations other than official allopathic preparations which are manufactured on or after Ist April, 1957, are presumed to be restricted preparations and chargeable to the duty at the rate of Rs. 30 per L.P. Liter unless declared to the countrary by the Central government on the advice of the Standing Committee.

(iv) Some of the other important definitions are as follows:-

(a) “Dutiable goods” means the medicinal and toilet preparations specified in the schedule as being subject to the duties of excise levied under the Act.

(b) “Medicinal preparations” includes all drug which are a remedy or prescription prepared for internal or external use of 1 Section 2 - Medicinal and Toilet Preparations (Excise Duty) Act, 1955.

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human beings or animals and all substances intended to be used for or in the treatment, mitigation or prevention of disease in human beings or animals.

(c) “Toilet preparation” means any preparation which is intended for use in the toilet of human being or in perfuming appeared of any description or any substance intended to cleanse, improve or alter the complexion, skin, hair or teeth and includes deodorants and perfumes.

Duty free issues:

8.3. (iv) Duty free issues of medicinal preparations are allowed from bonded factories or warehouses under Rule 7 of the Medicinal and Toilet Preparations (Excise Duty) rules, 1956 to the following institutions:-

(a) Hospitals and dispensaries working under the supervision of Central or State Government;

(b) Hospitals and dispensaries subsidies by the Central or State Government;

(c) Charitable hospitals and dispensaries under the administrative control and management of local bodies;

(d) Medical Stores Depots of the Central or any State Government; and

(e) Every other institution certified by the Principal Medical Officer of the district in which such institution is situated as supplying medicines free to the poor.

8.4. The duty or charges short levied or erroneously refunded is recoverable from the person from whom the duty was charged or to whom the refund was erroneously made within six months from the date on which duty was paid or from the date of making the refund, as the case may be.

Refund claim within six months:

8.5. No refund of duties or charges erroneously paid is allowable unless a written claim is preferred within six months from the date of such payment.

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Audit Checks:

8.6. The following points should be seen generally while checking the accounts of pharmacies:-

(i) That the medicines, manufactured have been correctly, classified into restricted or unrestricted category and that correct rates of duty are being charged is prescribed in the Schedule to section 3 of the Medicinal and Toilet Preparations (Excise (Duties) Act, 1955.

(ii) That in the case of medicinal preparation other than official allopathic preparations manufactured on or after 1st April, 1957, duty is being charged at the prescribed rate (the present rate being Rs. 30 per London proof liter) unless these have already been categorized by the Central Government as unrestricted preparation.

(iii) That the deposit of duty in advance deposit account with reference to treasury challans has been correctly entered in register and deductions on account of duty levied with reference to application of issue of medicines in Form AR-2 and Register of daily issued medicines (AR-4) have been correctly made.

(iv) That all the receipts and issues of spirit have been correctly taken into account.

(v) That necessary action has been taken to charge the duty in case of variation of strength of spirit, on the higher side, noticed as a result of Chemical Examiner’s report.

(vi) That proper accounts of finished products have been kept. For this purpose it has to be seen that all the medicines shown as manufactured in R.G.-III register have been taken to R.G. –IV Register of Finished Products and all issues of medicines as per B.M. – 4 and A.R.-II are correctly posted and closing balance accurately worked out.

(vii) In case of issue of duty free preparations, that the manufacturer must produce to the officer-in-charge a receipt signed by the proper Medical Officer acknowledging the receipt of each consignment within three months of the date of dispatch. It is appears that any such consignment was not received by the consignee, the case needs to be reported to the Excise Commissioner and pending the receipt of orders of the Excise

52

Commissioner duty free issue to that consignee is stopped. In case a shortage is discovered at the destination the manufacturer is liable to pay duty on such shortage at the rate prescribed for rectified spirits when used for medicinal purposes.

(viii) That in case of failure of the manufacturer to furnish proof of export of dutiable goods the duty liable on such goods and penalty, if any, is recoverable from the manufacturer.

(ix) The figures as disclosed in the return of Sales Tax/Income Tax may be co-related with a view to seeing that no part of the turnover has escaped from payment of duty free etc. The relevant figures so collected may be passed to the audit parties of Sales Tax/Income Tax for cross check.

(x) Excise wastage statements should be examined in order to see that the duty has been correctly charged on such wastages.

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CHAPTER-IX DISTRICT EXCISE OFFICE

Collector as head of district Excise Administration:

9.1. The Punjab State is divided into five divisions and consists of 21 districts. A Deputy Excise and Taxation Commissioner (Division) has been 1appointed in each division and he discharges the function of a Collector under the Excise Act. He also acts as a coordinating and supervising officer for the districts in his division.

An assistant Excise and Taxation Commissioner has been appointed in each district and he is charged with the responsibility of administering the Excise Act and Rules framed thereunder and collection of excise revenue.

Licences issued on payment of licence fee:

9.2. The classes of licences as mentioned in Appendix - E are granted on the payment of the prescribed fee. The mode of grant, and the authorities to grant and renew them have been noted against each. The licence fees are recovered and accounted for in the prescribed registers by the district excise office under the charge of the Assistant Excise and Taxation Commissioner.

Appendix-E

(Referred to in Para 9.2.)

A Class of Licence and authorities empowered to grant and renew.

There shall be the following class of licence. There mode of grant and the authorities to grant and renew shall be as noted against each:-

1 Order No. 2 & 4 of the Punjab excise Power and Apppeal Orders, 1956.

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Form Nature Mode of Grant

Authority empowered to Renew

1. 2. 3. 4. 5.

L-1 Wholesale and retail vend of foreign liquor to the trade only

Fixed Collector Collector

L-2 Wholesale and retail vend of foreign liquor and Punjab Medium Liquor Whisky of seventy five degree proof to the public

Auction Negotiation of at predetermined licence fee as specified in sub-rule (5-A) of Rule 36

-do-

L-2A Retail vend of Rum Gin and Whisky of 650 or 750 proof strength beer and liquor of duty approved economy brands of any distillery in Punjab

Fixed fee Collector Not renewable

L-3 Retail vend of foreign liquor in a hotel or dak bungalow.

Fixed fee and assessed fee

-do- Collector

L-3A Retail vend of beer and wine in a hotel or dak bungalow.

Fixed fee Collector -do-

L-4 Retail vend of foreign liquor in a restaurant.

Fixed fee and assessed fee

-do- -do-

L-4A Retail vend of beer and wine in a restaurant.

Fixed fee -do- -do-

L-5 Retail vend of foreign liquor in a bar attached to a restaurant (Supplementary to form L-4)

Fixed fee and assessed fees

-do- -do-

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L-5A Retail vend of beer and wine in a bar attached to a restaurant to a restaurant (Supplementary to Form L-4A)

Fixed fee -do- -do-

L-5B Retail vend of draught beer and wine independent or in a bar attached, to a restaurant.

Fixed fee Collector, collector with prior approval with prior of the Finance approval of Commissioner, the Financial Commissioner

L-6 Retail vend of foreign liquor in railway refreshment room

Assessed fee

Collector Collector

L-7 Retail vend of foreign liquor in railway dining car

Ditto Excise Commissioner

Excise Commissioner

L-8 Retail vend of foreign liquor on the premises (Supplementary to No. L-3, L-4, L-6 and L-7).

Ditto Collector except when supplementary to L-7 which shall be granted by the Excise Commissioner

Excise Commissioner, Collector except when supplementary to L-7 which shall be renewed by the Excise Commissioner.

L-9 Retail vend of foreign liquor in a military canteen or Border Security Force Canteen including unit run military canteen or those run regimentally on club lines

Assessed Collector with the consent of the Commanding officer or the Commandant of the Battalion as the case may be

L-10 Retail vend of beer for consumption on and off the premises.

Auction Collector Not renewable

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L-10B Retail vend of beer for Consumption off the premises

Fixed fee Collector Collector

L-11 Bottling of foreign liquor

Fixed fee Collector Collector

L-12 Vend of medicated wines

Ditto -do- -do-

L-12A Temporary licence for the retail sale of foreign liquor at bar in a theater or cinema or in any other temporary place of recreation

Ditto Do Do

L-12 B

Licence for the retail vend of foreign liquor at a bar attached permanently to a theater of cinema or other such place of entertainment

Assessed fee (Plus fixed fee in case of cinema

Collector Collector

L-12C Licence for the retail vend of foreign liquor at a club

Fixed for Assessed fee

Collector Collector

L-12D Licence for manufacture and possession of Sacramental wine for use on special occasion.

Fee Do Do

L-13 Wholesale vend of country spirit

Fixed fee Collector Not renewable except by the Collector when it is held by a distillery

L-13-A**

Rum, Gin and whisky of the strength of 35 degree under proof, as the case may be

Fixed fee Collector Not renewable

** Leg. Sup. Part-III dated 27.3.1993.

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L-14* Retail vend of country spirit of consumption on and off the premises

Auction Negotiation or at predetermined license fee as specified in sub-rule (5-A) of Rule 36

Collector

L-14-A*

Retail vend of country spirit for consumption off the premises

Ditto Do Do

L-14-AA***

Retail sub-vend of country spirit for consumption on the premises

Fixed fee Collector Not renewable

L-14-B

Retail vend of country spirit at fair or on a special occasion

Ditto Collector Collector

L-15 Bottling of country spirit

Fixed fee Do Collector

L-16 Reduction of country spirit

Fee Do Ditto

III Denatured Spirit

L-17 Vend of denatured spirit wholesale and/or retail

Fixed fee Do Collector

IV – Rectified Spirit

L-19 Vend of rectified spirit wholesale and/or retail

Fixed fee Collector Collector

L-20 Vend of Tari Not determined

Collector Collector

* Leg. Sup. Part-III dated 26.3.1996. *** Leg. Sup. Part-III dated 27.3.1992 (Provided that the Licences in forms L-3, L-3A, dL-4, L-4A, L-5 and L-5A shall however, be granted and renewed by the Collector with the prior approval of the Financial Commissioner.)

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L-20B Manufacture of retail vend of country fermented liquor

Auction Do Not renewable

L-20C Manufacture and possession of country fermented liquor of use on special occasions

Fixed Fee Do Collector

L-20D Manufacture and possession of country fermented liquor of use on special occasions

Ditto Do Do

V-Special

L-21 Extension of hours during which sale is permitted

Fixed fee Collector Collector

Note:- Licences in form L.3-A, L.4-A, and L.5-A, were added, vide Punjab Government Notification No. G.S.R. 31/PAI/14/S/59/ Amd. (47) 77, dated 22nd March, 1977. (ii) The regulations governing the grant and renewal of licenses are contained in Rules 2 to 24 of the Punjab Liquor Licence Rules, 1956.

Auction Fee system:

9.3. (i) Auction fee system. – Under this system the amount of license fee is determined by competition among the bidders for right to sell. This system at present applies to retail vends of country liquor in form L-14 and L-14A and L-2 vends as well as to the wholesale vend ‘Bhang’ in form H. 26.

(ii) Auctions are held by the Collector at the district level. Timely and effective publicity to the auctions to be held at subsequent dates is given. The dates of auction are generally adhered to and these are so fixed as to avoid the clashing of dates in the neighboring districts. The particulars of the vends to be auctioned, the quota of country liquor in proof liter fixed for each vend of country liquor, under of L-2 vends attached and conditions

59

of auction are announced by the Collector before each vend is put to auction. The procedure for the grant of licenses by auction has been prescribed in rule 36 of the Punjab Liquor License Rules, 1956. The annual auctions are generally held in February/March each year.

(iii) The security deposit, if any, and the licence, fee shall be payable by the person whose bid has been accepted, in the following manner:-

(a) In the case for foreign liquor licences (L-2 and L-10), he shall pay one-sixth of the licence fee within a period of seven days of the date of auction or by last day of the month in which auction take place and the remaining amount of licence fee in ten equal monthly installments each installment being payable by the seventh of each month beginning from the month in which he starts his business;

(b) (i) [A country liquor licencee holding licences in form L-14A and a licencee holding licence in form L-2 for wholesale and retail vend of foreign Liquor to the Public only] shall deposit security equivalent to [twelve and half percent of security deposit the total license fee viz., seven and half percent on the spot at the fall of hammer and the remaining five percent by twenty-eight day of March. The collector, may, however, receive the remaining of security with a late fee of 2 percent upto 10th April instead of canceling the bid. No relaxation after 10th April shall be available and the licensee shall be deemed to have been cancelled. No interest shall be payable on the amount of security that remains deposited with the Government]. The aforesaid amount of security shall be refundable to him at the end of the period for which the licence is granted, unless the same or any part thereof is forfeited or adjusted against any amount of fee, duty or penalty due from him in respect of his licence. In the event of the amount of security deposit or any part thereof being forfeited or adjusted as aforesaid the deficiency shall be made good by him within seven days of the happening of such an event, failing which the licence shall be liable to cancellation by the authority by which it was granted.

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[Provided that in the event of adjustment of security towards last instalments of licence fee, the deficiency shall not be made good].

(ii)[After deducting the amount of security from the amount of license fee, he shall pay entire amount of license fee in [nine equal monthly installments starting from April to December and each installment shall be payable upto twenty fifth day of each month]. The difference of rupees thirty in the excise duty on Indian Made Foreign Liquor lifted by the licensee in lieu of Punjab Medium Liquor upto fifteen per cent of basic quota will be adjusted towards his last installments.]

Provided that if the licence is issued for a period of less than a year the whole amount shall be paid in such number of equated monthly installments as is less by one from the number of months for which the licence is granted by ignoring a fraction of month, if any, in counting the number of months;

Provided further that if the licence if for a period of less than a month the whole of the licence fee shall be paid in lump sum immediately after the bid is accepted.

[Provided further that for the period from first day of May, 1977 to the 31st day of March, 1978, the licence shall pay the whole amount of licence fee in eleven monthly installments, each installment payable by the 15th day of each month, subject to the condition that 75 percent of the total licence fee shall be payable in eight equated monthly installments beginning from the month of May, 1977 and the remaining 25 per cent of the total licence fee shall be payable in three equated monthly installments beginning from the month of Januray, 1978.]

(c)[The Collector shall devise a suitable system for linking the issue of permits to the recovery of licence fee subject to overall control of the Excise Commissioner.]

(iv) If any person whose bid has been accepted by the Presiding Officer at the auction fails to deposit the amount of security or refuses to accept the license, or becomes liable to cancellation under the provisions of the Act, the Collector or an gazetted officer authorised by him in this behalf may resale the vend

61

by public auction or by private contract in accordance with the procedure laid down in the rules and any deficiency1 in the license fee and all the expenses of resale shall be recoverable from the defaulting licensee as arrears of land revenue as laid down in section 60 of the Punjab Excise Act, 1914. The Collector shall also communicate the results of such resale in a statement in form M-16 to the Excise Commissioner in the same manner as annual auction results.

(v) If the licensee commits breach of his licence permit or pass, the Collector may forfeit2 the security deposited by the licensee without prejudice to any other action that the Collector may take under sections 36 and 39 of the Act.

Other conditions as to auction:

(vi) The following conditions shall also apply to all sales under auction:-

(a) No person whose name is on the list of persons debarred from holding licenses for the sale of any intoxicant in Punjab, Delhi, Haryana, Union Territory of Chandigarh and Himachal Pradesh shall be allowed to bid at auction.

(b) No person shall be allowed to bid for another whether his partner or not unless he holds a duly executed power of attorney enabling him in this behalf.

(c) No person shall be allowed to bid unless he has deposited a sum of (Rupees one hundred and fifty) in government Treasury as entry fee for each auction venue as deposits the same for the aforesaid purpose at the time of auction with the presiding officer. In lieu of this deposit with the Presiding Officer, he shall be issued a receipt in Form M-24A. The entry fee shall be neither refundable nor adjustable.

(d)If the Collector of the Presiding Officer as the case may be, is of the opinion that bidding is excessively high, he may announce that if any higher bids are made, he will demand an immediate deposit of additional security as detailed under Rule 17.

1 Rule 36(23) and (24) Punjab Liquor License Rules, 1956. 2 Rule 37 (33-A) Punjab Liquor License Rules, 1956.

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The incidence of license fee in the amount of reasonable bid for liceence in Form L-14A shall be considered basic and any bidder whose bid reaches the incidence of rupees sixty, sixty five and seventy per bottle of country liquor shall be required to deposit additional securities at the rates of one percent, three percent and five percent respectively, of the entire licence fee in cash or through a bank draft with the Collector or the Presiding Officer at the fall of the hammer.

(e) The Presiding Officer shall not be bound to accept the highest of any bid. When the highest bid is refused, the Presiding Officer shall record the reason for accepting any other bid.

(f) The Collector shall forward to the Excise commissioner statements in form M-14 and M-14A showing the results of auction as compared to that of the preceding year.

(g) In any case in which the shop has not been sold for the highest bid a short statement of rejecting the same shall also be sent by the Collector to the Excise Commissioner.

Licenses personal to holders:

9.4. If a licensee dies after having 1paid his initial deposit of 25 rupees and one twelfth of the total license fee and any other installment that may have become due his estate shall forfeit the sums so paid, but his estate shall not be liable for any other payment if on the date of any death, the last date allowed for the payment of any installment had expired and the installment had not been paid, his estate shall be liable for the payment of such installment of installments whether the payment of the same had been suspended by the competent authority or not.

9.5. After the conclusion of auctions all the licensees granted by auction are noted in the “ Register of licences granted on fees determined by auction or tender in form M-2”. The registers used as a ledger of demand and collection. Separate pages are allotted for each vend put to auction. The entries in the register against each vend are so arranged as to show the total amount recoverable for the auction of vend, the security amount due and the

1 Condition No. 32 in clause (a) of sub-rule (ii) of rule 37 ibid.

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monthly installments fixed under rules. The payments are made by the licensees direct into government Treasury. Entries for payment are made in the register from the treasury challans received direct from the treasury. The district office is also required to maintain a daily collection register and entries of payment made in M-2. Registers are required to be reconciled. At the end of month/year totals are stuck to ensure that licence fee has been paid in full.

Fixed Fee System:

9.6. Fixed fee system. – Under this system a fixed fee is levied for the right of vend during the year of for a shorter period of for particular occasion.

Fixed fees for the various types of licences are notified by the government through gazette notifications, Generally before the commencement of the financial year. The rates of fixed fees for the various types of licences as mentioned above are contained in Rules 25, 27, 29 and 30 of the Punjab Liquor Licence Rules, 1956. Fixed fees are generally recovered in one installment before the licensee starts functioning.

In the case of licences granted, extended or renewed for a period less than a year, the fixed fee for such period shall be worked out proportionately on monthly basis and a fraction of a month shall be counted as a month for this purpose.

Demand and Collection Register:

9.7. All the licences granted on fixed fee are entered in a register in form M-1. “Register of licences granted on fixed fee/assessed fee”. This register is used as a ledger of demand and collection. It is divided into separate parts for type of licences such as L.1, L.2 L.3, L.4, L.5, L.3A, L4A,L5A,L10A, L11, L.12, L. 12A, L. 12C, L. 13, L. 15, L. 17, L. 19 and L. 20.

Entries for the payment of fixed fee as leviable under the law for the year are made on the receipt of treasury challan as the payments are made by the licensees direct into treasury.

9.8. The rates of fixed fee for the various types of licences as sanctioned by the government during the year 1997-98 to 2001-2002 have been given in Appendix ‘F’.

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Assessed Fee:

9.9. In case licences in form L-9 the fee assessed1 on the basis of rates provided in rule 31 shall br recovered in advance in the forms of permit fee at the time of issuing permit for the import or transport of liquor by the licences.

Permits in form L-32 are issued from printed permit books, which are machine numbered in a chronological order. A record of all permits issued and assessed fee paid is kept in the Permit Register.

9.10. (i) Manner of levy and payment of assessed fee in the case of licences in forms L-3, L-4, L-5, L-6, L-7, L-8, L-9, L.12-B and L.12-C is granted or renewed, the Collector shall assess the fees on the scale laid down in rule 31. In order to estimate the sales on which the fees for the ensuing year shall be assessed, the Collector shall obtain from the Excise Inspector through the incharge of the district a certificate as regards the sales made from the 1st January, to the 31st December, in which the Inspector shall certify that the registers in which sales are recorded have been personally verified by him and that the totals of the sales are correct.

If the total fee, whether fixed or assessed does not exceed Rs. 500 it shall be payable as soon as fixed or assessed. If it exceeds Rs. 500 one half of it shall be recovered in the month of April, one-forth before end of June and the remaining one-forth before the end of September in each financial year.

(ii) In the case of licences in form L-12C (clubs) a the annual licence fee assessed in accordance with the rules and recovered as above shall .be adjusted four times as under:-

(a) at the end of the each of the first three quarters against that arrived at on the basis of actual sales of foreign liquor during the quarter; and

(b) by the 7th of the month of March on the basis of average sales during the first three quarters which shall be finally adjusted on the basis of actual sales at the end of the fourth quarter.

1 Rule 29 of the Punjab Liquor Licence Rules, 1956.

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9.11. The rates of assessment fee as leviable in the case of L.2, L.3, L.4, L.5, L.6, L.7, L.8, L.9, L.12B and L.12C during the years 1997-98 to 2001-2002 have been given in Appendix G.

9.12. The recovery of the assessment fee is watched and noted in the Permit Register in the case of L-9 licence and in the case of other licences it is watched and noted through M-I register as described in Para 9.7. above.

9.13. Levy of Excise Duty:

Under the provisions of the Punjab Excise Act, 1914 and rules framed thereunder no intoxicant1 shall be imported, exported or transported except –

(a) after payment of any duty to which it may be liable under the Act or execution of a bond for such payment; and

(b) in compliance with such connections as the State Government may impose.

The rates of Excise Duty as notified by the State Government under Section 31 of the Act are given in the Punjab excise fiscal Orders, 1932.

The rates of Excise Duty as leviable in the case of (i) country liquor, Indian made foreign liquor, rectified spirit and Indian made rum, when issued to Troops of border Security Force (ii) sweets and wines have been given in Appendix H and I.

9.14. Procedure for the levy and payment of Duty:

(a) The Excise duty is levied before any intoxicant is –

(i) imported into Punjab; of

(ii) issued from a bonded ware-house ; or

(iii) issued from a distillery.

(a) Import: A licensee importing foreign liquor, including beer,

rectified spirit or denatured spirit from another State is required to obtain a permit in form L-32 from the District Excise Officer

1 Section 16 of the Punjab Excise Act, 1914.

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authorised to grant such permits in Punjab and a pass in form and transport from the authorised office of the other State. The permit in form L-32 is issued only after the excise duty at the rates if force in Punjab had been credited into the treasury in Punjab by the licensee.

(b) As an exception to this general rule, foreign liquor including beer can imported into Punjab without payment1 of duty by persons having licensed bonded ware-house in Punjab and the duty is realised before issue of the foreign liquor from the bonded ware-house, against permits issued by the District Excise Officer.

(c) Duty on liquor manufactured in Punjab. – Excise staff under the charge of an Excise and Taxation Officer is posted at each distillery and no liquor can be issued2 from the distillery except on the authority of a pass issued by excise staff posted at the distillery. The person applying for such a pass must either present a permit indicating that the excise duty has already been paid by him in the Government treasury situated in the district from whose except officer he obtained permit, (in such a case the particular of the treasury challan are noted in the permit signed by the authorised excise officer of the district) or he should pay the excise duty in the treasury of the district in which the distillery is situated. The applicant presents the treasury receipt in token of having paid the duty and the Inspector of the distillery affixes it to the counterfoil of the distillery, pass.

(d) As explained in Chapter IV of this Manual, duty on beer manufactured in a Brewery licensed in the Punjab State is levied and charged as soon as its account is taken under Rule 35 of the Punjab Brewery Rules, 1956 and duty in this case is paid by the Brewery Management. The permits for issue of beer from the Breweries in Punjab State to the licensed dealers of the State are issued without charge of duty, out of duty paid stock.

9.15. Permit in form L-50.

(1) A permit in form L.50 for purchase3 transport and possession of foreign liquor exceeding 12 bottles of any size of 1 Section 22 of the Act & Rule 1(ii) of the Punjab Excise Board ware-house Rules, 1957. 2 Rule 114 of the Punjab Distillery Rules, 1932. 3 As per Excise Policy for 2001-2002 (31 [ii]).

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IMFL/Imported foreign liquor may, on application, be granted to a person for bond fide consumption by him, the members of his family or his guests, .by the Excise and Taxation Officer-in-charge of the District, on payment of permit fee of Rs. 100/-. This permit may also be issued on payment of lump sum permit fee of Rs.1000/- for lifetime after getting approval from the Collector.

(2) A register in Form L.51, showing the particulars of such permit holders, shall be maintained in all District Excise and Taxation Officer.

(3) Each permit, shall be valid throughout Punjab upto the 31st March, following.

9.16. A list of registers maintained in the office of the Excise and Taxation Officer of the District is given in Appendix ‘J’.

9.17. A list of statements required to be submitted by the District Excise Office to the office of the Excise and Taxation Commissioner, Punjab, is given in Appendix ‘K’.

9.18. Audit Checks:

(i) Auction of Country Liquor and Bhang Shops:-

(a) It should be seen that wide publicity was given to the auction sufficiently ahead of the date of auction.

(b) It should be checked that all the vends required in the auctioned have been put to auction.

(c) It should be seen that the receipts from auction money are generally on the increase. If there is a general tendency towards fall in auction in any year, the reasons, therefore, if any, may be examined.

(d) The cases where highest bids were not accepted should be checked to see inter alia if the reasons thereon have been recorded by the Presiding Officer.

(e) The cases where the Collector had demanded an immediate deposit of one twelfth of bid money at the time of auction, under the provisions of clause 17 of rule 36, should be scrutinized to ensure inter alia that sum, due were recovered on spot and promptly deposit into Government treasury.

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(f) In case of re-auction of vends it should be seen if loss suffered by the Government has been recovered from the original licensee, Statements in form M.1 and M.16 should be consulted in this connection.

(g) It should be checked that the amount of the bids was correctly noted in the Demand and Collection Register (M-2) for realisation.

(h) It should be checked if the prescribed amount of security deposit and monthly installments of license fee was recovered by the due dates. The entries for the realisation of auction money have been attested in M-2 Register.

(i) It should be seen that defaulters of excise dues have not been allowed to take part in auction and the solvency of bidders stands verified.

(j) The entries for the realization of licence money should not only be verified with the treasury challans available in the district office but these entries should also be reconciled with the treasury records.

(k) It should be checked that no licensee is allowed quota of country liquor in excess of that sanctioned for the shop without payment of additional license fee.

(l) It should be seen that all cases for the late payment of license fee have been reported for the orders of the Collector and the penalties imposed by the Collector for the late payment of licence fee have been duly noted in the ‘Khatauni’ of occasional payments such as fine, etc., maintained in the district office in form M-18. It should be checked that the amounts have been realised expeditiously and entries are attested.

(ii) Foreign Liquor vends. - It is to be seen that:-

(a) applications for the grant and renewal of licences were received within the dates prescribed under Rule 11-A of the Punjab Liquor Licence Rules.

(b) application fee of Rs. 100 has been deposited in each case.

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(c) the bonds for the prescribed sum by one or two sureties have been attached with the application.

(d) the prescribed amount of licence fee has been correctly determined and deposited.

(e) the licences are issued, Indian made foreign liquor out of excise duty paid stock and the assessment fee at the prescribed rate has been levied, charged and paid at the time of issue of permits in form L.32.

(f) all the licences have been entered in M-I register (Register of Licences granted on fixed fee) and the entries in the register for the demands raised and payments have been attested.

(g) the amounts as per challans for payments of fixed fee tally with those entered in treasury records.

(iii) Vends of denatured spirit. – The procedure of the realization of licence fee (fixed fee), security deposit and assessed fee is the same as in the case of foreign liquor vends and audit would be exercised mutatis mutandis.

(iv) Remissions and Refunds. – It should be seen that the remissions and refunds have been sanctioned by the competent authority. All refunds cases are required to be noted in the Register in form M-25 (statement of refunds of excise revenue). It should be verified that all refunds have been noted against the original payment in the remarks column in which the payment was noted.

(v) Other records. – (a) M-7(A) Register of liquor imported/transported into district.

It should be seen that:-

(1) all the permits issued for country spirit have been noted in this register against the licensee concerned.

(2) the authorised annual quota of the country spirit fixed for each vend put to auction is noted at the top of the page allotted to the particular licensee.

(3) the progressive totals of the quantity authorised to be issued is worked out every time a new entry is made in the register.

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(4) the excess issue of quota is authorised by the competent authority and the licence fee at the average rate for that vend or for the whole state for that year, whichever is more is recovered from the licensee.

(b) M-3A. Register of permits granted for the transport from Distilleries in Punjab and import of denatured spirit.

It should be verified that:-

(1) all the permits in respect of spirit are noted in the register;

(2) the permit fee has been correctly calculated and paid into treasury;

(3) the credits are traceable in the daily collection register;

(4) the entries in the register tally with those mentioned in the statements received from distilleries/other States to ensure that there is not unauthorised issue.

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CHAPTER – X

EXCISE AND TAXATION COMMISSIONER’S OFFICE

Audit of Excise Commissioner’s Office:-

10.1. While conducting audit of the office of the Excise Commissioner, the following points should be seen generally:-

Write off:

(a) Write off cases. – Write off cases need to be examined thoroughly with a view to ascertaining that all possible steps were taken to effect recovery of government dues and that write off of revenues was recommended only after the chances of recovery had become remote. It may also be examined whether the Government revenues were rendered irrecoverable due to non-observation of rules by departmental officials or there was some lacuna in rules.

Other functions of the Excise commissioner:

(b) The Excise commissioner as Head of the Excise Department of the State Government has the following coordinating functions:-

(i) The excess wastage statement in respect of storage/transit and other wastage of spirit, occurring in the warehouses and pharmacies are submitted to him for orders. In audit it is to be checked the orders on these statements are passed expeditiously to facilitate early realisation of duty involved therein.

(ii) Under the Excise Policy of the Government, the distilleries in the Punjab State, ARE REQUIRED TO SUPPLY COUNTRY LIQUOR TO THE LICENSEES AT THE PRICE FIXED BY THE department. In calculating the sale price of country liquor by the distilleries the price of molasses is taken as fixed under the East Punjab Molasses (Control) Act, 1948.

Punjab being a deficit State in the production of molasses sometimes molasses are purchased by the Department from the open market after calling tenders. The supply contracts are sanctioned by the Excise and Taxation Commissioner/Government and cost

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thereof is debited to the budget of the Department. The Molasses so purchased at the market rate are supplied to the distilleries at the controlled price. ‘

The supply contracts should be examined thoroughly and it should be ensured that the price of molasses at the controlled rate plus transportation charges have been recovered from the distilleries and credited to the State exchequer.

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CHAPTER – XI OFFENCES AND PENALTIES

Penalties under Excise Act:-

11.1. The following penalties for various offences have been prescribed under the Punjab Excise Act./Medicinal and Toilet Preparations Act:-

Penalty for unlawful import, export, transport, manufacture, possession, sale, etc.

(i) Whoever, in contravention of1 Punjab Excise Act or of any rule, notification issued or given thereunder or order made, of any licence, permit or pass granted under Punjab Excise Act, -

(a) imports, exports, transports, manufactures, collected and possesses any intoxicant; or

(b) constructs or works any distillery or brewery; or

(c) uses, keeps or has in his possession any materials still, utensils, implement or apparatus whatsoever for the purpose of manufacturing any intoxicant other than tari;

shall be punishable for every such offence with imprisonment for a term which may extend to three years and with fine upto twenty five thousand rupees. The State Government, vide their notification No. 36-Leg/76, dated 27th September, 1976, has also provided minimum punishment if found in possession of working still for manufacture of any intoxicant, shall not be less than one year and such fine shall not be less than five thousand rupees for the various offences mentioned above.

Penalty of unlawful import, export, transport, manufacture, possession, sale etc.:-

(ii) Whoever, in contravention of any section other than section 29 and 30 of the Punjab Excise Act2 or of any rule,

1 Section 61 of the Punjab Excise Act, 1914. 2 Section 61 (2) of the Act ibid.

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notification issued or given thereunder or order made or of any licence, permit or pass granted under the Act. –

(a) sells any intoxicant; or

(b) cultivates the hemp plant; or

(c) removes any intoxicant from any distillery, brewery or warehouse established or licensed under this Act; or

(d) bottles any liquor for the purposes of sale; or

(e) taps or draws tari from any tari-producing tree;

shall be punishable with imprisonment for a term which may extend to two years and fine which may extend to two thousand rupees.

Penalty for rendering or attempting to render denatured spirit fit for human consumption

(iii) Whoever renders or attempts to render fit for human consumption any spirit, whether manufactured in India or not, which has been denatured, or has in his possession any spirit rendered fit for human consumption in respect of which he knows or has reason to believe that any such attempt has been made, shall be punishable1 with imprisonment for a term which may extend to one year and with fine which may extend to one thousand rupees.

Penalty for certain Acts by licensee or his servant:

(iv) Whoever, being the holder of a license, permit of pass granted under the Punjab Excise Act, or being in the empowered such holder or acting on his behalf:-

(a) fails willfully to produce such license, permit or pass on the demand of any excise officer or of any other officer duly empowered to make such demand; or

(b) in any case not provided for in section 61 willfully contravenes any rule make under section 58 or section 59; or

1 Section 63 of the Act ibid.

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(c) willfully does or omits to do any thing in reach of any of the conditions of the license, permit or pass not otherwise provided for in this act.

Shall be punishable1 with a fine which may extend to five thousand rupees.

Penalty for offences not otherwise provided for.

(v) Whoever is guilty of any act or intentional omission in contravention of any of the provisions of the Punjab Excise Act, or of any rule, notification or order made, issued or given thereunder, and not otherwise provided for in this Act, shall be punishable2 for every such act or omission with a fine which may extend to five thousand rupees.

(vi) If any person contravenes any of the provisions of notification issued under section 6 of the Medicinal and Toilet Preparations Excise Duties Act, 1955 or evades the payment of any excise duty payable under the Act or fails to supply any information which he is required by rules made under the Act to supply or supplies false information etc. ; is punishable for every such offence with imprisonment for a term which may extend to six months or with fine which may extend to Rupees two thousand or with both.

(vii) Under Rule 17 of the Medicinal and Toilet Preparations Rules, 1956, when any person authorised to export dutiable goods in bond fails to furnish proof of such export, he is required forthwith to pay the duty leviable on such goods and is also liable to a penalty upto Rupees two thousand.

(viii) A breach of the Medicinal and Toilet Preparation Rules, where no other penalty is provided for, is punishable with a penalty, which may extend to Rupees one thousand.

Cancellation or Suspension:

11.2. Any licence permit or pass granted under the State Excise Act, 1914 may be cancelled or suspended by the authority granting it –

1 Section 65 of the Act. 2 Section 68 of the Act.

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(a) if it is transferred or sublet by the holder these of without the permission of the said authority; or

(b) if any duty or fee payable by the holder thereof be not duly paid; or

(c) in the event of any breach by the holder of such licence, permit or pass or by his servents, or by any one acting on his behalf with his express or implied permission, of any of the terms of conditions of such licence, permit or pass, of

(d) if the holder thereof is convictd of any offence punishable under this Act or any other law for the time being in force relating to revenue or of any cognizable and non-bailable offence, or any offence punishable under the Dangerous Drugs Act, 1930 or under the Merchandise Marks Act, 1889, or of any offence punishable under section 482 to 489 (both inclusive) of the Indian Penal Code; or

(e) if the holder thereof is punished for any offence referred to in clause (8) of section 167 of the Sea Customs Act, 1878; or

(f) where a licence, permit of pass has been granted on the application of the grantee of a lease under this Act, on the requisition in writing of such grantee; or

(g) at will, if the conditions of the licence or permit provide for such cancellation or suspension.

In the case of cancellation or suspension of a licence for offence mentioned at (a), (b), (c), (d) or (e) above the fee payable for the balance of the period for which any licence would have been current but for such cancellation or suspension, may be recovered from the ex-licencee as excise1 revenue. Further the holder shall not be entitled2 to any compensation for its cancellation or suspension nor to the refund of any fee paid or deposit made in respect thereof.

1 Section 38 ibid. 2 Section 40 ibid.

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Power to Compound Offences:

11.3. (i) The cancellation and suspension of any licence, permit or pass for the offences mentioned at (a) (b) or (c) of para 8 above may be forgone1 or revoked by and at the sole discretion of the authority having power to cancel or suspend it on payment by the holder of such licence, permit or pass of such penalty as such authority may fix.

(ii) The Collector may accept2 from any person who is reasonably suspected of having committed an offence punishable under section 62, section 65 or section 88 of the Punjab Excise Act, a sum of money by way of composition of such offence and on the payment of such sum of money to the Collector the accused person if in custody shall be discharged and no further proceedings shall be taken against him in respect of such offence.

(iii) Fines imposed on licence holders by the officers of the Department are noted in a register in form M-18 as and when the order imposing the fine is passed and recoveries of the fine are noted in this register.

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1 Section 80 (2) of the Punjab Excise Act, 1914. 2 Section 80 (1) of the Punjab Excise Act, 1914.

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CHAPTER – XII

SEARCHES, SEIZURE AND CONFISCATIONS

Power of arrest, seizure and detention:

12.1. Powers of arrest, seizure and detention. – Any officer of the excise, police, salt or land revenue department, not below such rank and subject to such restrictions as the State Government may prescribe, and any other person duly empowered by notification by the State Government in this behalf, may arrest without warrant any person found committing any offence punishable under section 61, or section 63, and may seize and detain any intoxicant or other article which he has reason to believe to be liable to confiscation under the Act or other law for the time being in force relating to excise revenue : and may detain and search any person upon whom, and any vessel, raft, vehicle, animal, package; receptacle of conversing in or upon which he may have reasonable cause to suspect any such article to be.

[e.f. Section 47 of Punjab Excise Act].

12.2. Power of the Magistrate to issue warrant for search or arrest:-

A Magistrate having reason to believe that an offence under section 61 & 63, has been, is being or is likely to be committed may issue a warrant for search of any place in which he has reason to believe that any intoxicant, still, utensil, implement, apparatus or materials, in respect which such offence has been, is being or is likely to be committed, are kept or concealed; and

12.3. Issue a warrant for the arrest of any person whom he has reason to believe to have been , to be or likely to be engaged in commission of any such offence.

Search without warrant:

12.4. Power of Excise Officer to search without warrants. – Whenever any excise officer not below such rank as the State Government may by notification prescribe, has reason to believe than an offence punishable under Sections 61, 62, 63 or 64;

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has been, is being or is likely to be committed in any place, and that a search-warrant cannot be obtained without affording the offender an opportunity of escape or of concealing evidence of the offence, he may at any time, by day or night, enter and search such place.

[e.f. Section 49 (1) of the Punjab Excise Act].

Further Power:

12.5. Further powers of seizure, detention, search and arrest:- Every excise officer as aforesaid may seize anything found in such place which he has reason to believe to be liable to confiscation under the Act, and may detain and search and, if he thinks proper arrest any person found in such place whom he has reason to believe to be guilty of such offence as aforesaid.

[e.f. section 49(2) of the Punjab Excise Act].

Procedure to arrest, etc.

12.6. Procedure relating to arrest searches, etc. – The provisions of the code of Criminal Procedure, 1973, relating to arrests, detention in custody, searches, summonses, warrants or arrest, search warrants, production of persons arrested and investigation of offence shall be held to be applicable to all actions taken in these respects under Act:-

Provided that –

(1) any offence under the Act may be investigated by an officer empowered under Section 46 without the order of a Magistrate.

(2) Whenever an excise officer below the rank of Collector makes any arrest, seizure or search he shall within twenty-four hours thereafter, make a full report of all the particulars of the arrest, seizure of search to his immediate official superior and shall, unless bail be accepted under Section 73, take or send the person arrested or the article seized with all convenient dispatch to a Judicial Magistrate for trial or adjudication.

(e.f. Section 50 of the Punjab Excise Act.)

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Power to enter and inspect:

12.7. Power to enter and inspect places of manufacture and sale – any excise officer not below such rank as the State Government may prescribe may –

(a) enter and inspect at any time by day or by night any place in which any licenced manufacturer carriers on the manufacture of or stores an intoxicant;

(b) enter and inspect, at any time within the hours during which sale is permitted, and at any other time during which the same may be open, any place in which any intoxicant is kept for sale by any person holding a licence under the Act;

(c) examine accounts and registers, test, measure or weigh any materials, stills, utensils, implements, apparatus or intoxicants found in that place;

(d) seize any accounts registers measures, weights, or testing instruments which he has reason to believe to be false.

(e.f. Section 45 of Punjab Excise Act)

Things liable to confiscation:

Confiscation of articles etc.

12.8. Whenever an offence punishable under the Punjab Act has been committed;

(a) every intoxicant or excise bottles in respect of which such offence has been committed, together with the contents of such bottle, if any;

(b) every still, utensil, implement or apparatus and all materials in respect of or by means of which such offence has been committed;

(c) every intoxicant or excise bottle lawfully imported, transported, manufactured, had in possession or sold alongwith; or in addition to, any intoxicant or excise bottle liable to confiscation under clause (a);

(d) every receptacle, package and covering in which any intoxicant or excise bottle, materials, still, utensils, implement

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or apparatus as aforesaid is or are found together with the other contents (if any) of such receptacle or package; and

(e) every animal, cart, vessel, raft or other conveyance used in carrying such receptacle, package, covering or articles as aforesaid; shall be liable to confiscation:

(e.f. Section 78(1) of Punjab Excise Act.)

Option to pay fine:

12.9. When in the trial of any offence punishable under the Act the Magistrate decides that anything is liable to confiscation under sub-section (1), of Section 78 he may order confiscation;

Provided that in lieu of ordering confiscation he may give the owner of the thing liable to be confiscated an option to pay such fine as the Magistrate thinks fit.

[e.f. Section 78(2) of Punjab Excise Act].

Further provisions for confiscation:

12.10. When there is reason to believe that an offence under the Act has been committed, but the offender is not known or cannot be found and when anything or animal liable to confiscation under the Act and not in the possession of any person cannot be satisfactorily accounted for the case shall be inquired into and determined by the Collector; who may order confiscation:

Provided that no such order shall be made until the expiration of one month from the date of seizing the thing or animal in question or without hearing the person (if any) claiming any right thereto, and the evidence (if any) which he produces in support of the claim:

Provided further, that if, the thing in question if liable to speedy and natural decay, or if the Collector is of opinion that the sale of the thing or animal in question would be for the benefit of its owner the Collector may at any time direct it to be sold, and the provisions of this section shall so far as may be, apply to then proceeds of such sale.

[e.f. Section 79 of the Punjab Excise Act].

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12.11. Powers to compound Offences. – When any intoxicant has been seized under the provisions of the Act, the Collector viz., the Deputy Excise and Taxation Commissioner, may pass discretion at any time before a Magistrate has passed an order of its confiscation release the seized article on receiving payment of the value thereof.

All such orders are noted in the register in form M-18 and recovery of the amount is watched through this register.

[e.f. Section 80(3) of the Punjab Excise Act].

Disposal of confiscated goods by auction:

12.12. Every article, the confiscation of which has been ordered by a court under Section 78(2) of the Excise Act shall be made over to the Collector (Deputy Commissioner) of the district in which such court in situated. Such goods shall be disposed of as follows:-

(i) All liquor of illicit origin and licit liquor not contained in sealed bottles and hemp drugs, declared unfit for human consumption by the Chemical Examiner to government, Punjab, shall be destroyed under the orders of the Collector (Deputy Commissioner) of the district in the presence of the Excise and Taxation Officer.

(ii) Liquor lawfully manufactured and contained in approved sealed bottles shall be sold by auction or sale to the local licensed vendors under the orders of the Collector (Deputy Commissioner) of the district.

(iii) Hemp drugs (bhang) declared fit for human consumption by the Chemical Examiner to Government, Punjab; shall also be disposed of in the manner prescribed for the disposal of licit bottled liquor.

(iv) Sale-proceeds of all articles sold shall be credited to government (0039 State Excise Penalties).

[e.f. Rule 1 to 5 of the Punjab Intoxicant confiscation Rule, 1955].

---------------

83

CHAPATER – XIII

MISCELLANEOUR PROVISIONS

13.1. Appeals:

An appeal shall lie1 from an original or appellate order of an Excise Officer as follows, namely:-

(a) To the Collector, when the order is made by an Excise Officer below the rank of Collector

(b) to the Excise and Taxation Commissioner, when the order is made by the Collector

Provided that:-

(i) when an original order is confirmed on first appeal, a further appeal shall not lie;

(ii) When any such order is modified or reversed on appeal by the Collector, the order made by the Excise and Taxation Commissioner on further appeal, if any, to him shall be final.

13.2. Every memorandum of appeal must be presented within one month from the date of the order appealed against.

Revision and Review:-

13.3. (i) The Excise Commissioner may, suo moto at any time or on an application made to him call2 for the record of any proceedings which are pending before, or have been disposed of, by any excise officer subordinate to him for the purpose of satisfying himself as to the legality or propriety of such proceedings or of any order made therein and may pass such orders in relation thereto as he may deem fit:

Provided that the application shall be made within a period of one hundred and eighty days of the date of taking of the proceedings or of passing of the order, as the case may be.

1 Section 14(1) of the Punjab Excise Act, 1914. 2 Section 15(1) of the Punjab Excise Act, 1914.

84

(ii) The Excise Commissioner may review1 his own orders.

(iii) No order shall be made2 under this section which adversely affects the rights of any person upon whom any obligation is imposed by or under this Act, without giving such person a reasonable opportunity of being heard.

13.4. Recovery of Government dues: (1) The following moneys, namely:- (a) all excise revenue, (b) any loss that may accrue, when in consequence of

default, a grant has been taken under management by the Collector or has been resold by him under Section 39, and

(c) all amounts due to the Government by any person on account of any contract relating to the excise revenue may be recovered3 from the person primarily liable to pay the same, or from his surety (if any), by dispose and sale of his moveable property or by any other process for the recovery of arrears of land revenue due from land-holders or from farmers of land or their sureties.

(2) When a grant has been taken under management by the Collector or has been resold by him under section 39, the Collector may recover, in any manner authorised by sub-section (1) of Section 60, any money due to the default by any lessee or assignee.

(3) In the event of default by any person licensed or holding a lease under this Act all his distillery, brewery, warehouse or shop, premises, fittings or apparatus and all stocks of intoxicants or materials for manufacture of the same held in or upon any distillery, brewery, warehouse or shop premises shall beliable to be attached in satisfaction of any claim for excise revenue or in respect of losses incurred by the State government through such default and to be sold to satisfy such claim, which shall be first charge upon the sale-proceeds.

1 Section 15(3) of the Punjab Excise Act, 1914. 2 Section 15(5) of the Punjab Excise Act, 1914. 3 Section 60 of the Act, ibid.

85

Exemptions: 13.5. The State Government may be notification either

wholly or partially and subject to such condition as it may think fit to prescribe, exempt1 any intoxicant from all of any of the provisions of the Act.

The list of intoxicants which have been exempted from the operation of the Punjab Excise Act to the specified extents have been given in Order No. 8 of the Punjab Excise fiscal Orders 1932.

Surrender of licence and remission of fee: 13.6. No holder of licence granted to sell an intoxicant

shall surrender2 his licence except on the expiration of one month’s notice in writing given by him to the Collector of his intention to surrender the same and on the payment of the fee payable for the licence for the whole period for which it would have been current but for the surrender:-

Provided that if the Collector is satisfied that there is sufficient reason for surrendering the licence, he may remit to the holder thereof the sum so payable on surrender or any portion thereof.

13.7. Refunds. – When a licence permit or pass is withdrawn under Section 41 of the Act, any fee paid in advance or deposit made by the licensee in respect thereof shall be refunded3 to him after deducting the amount if any due to the State Government.

Refund of fee or deposit: Refund of fee or deposit - when a license, permit or pass is

withdrawn under this section, any fee paid in advance or deposit made by the licensee in respect thereof shall be refunded to him after deducting the amount (if any) due to the State Government.

All refunds should be noted against the original payment in the remark column of the register in which the payment was noted. Simultaneously all refunds are noted in the register of refund of Excise Revenue maintained in from M-25 in the District Excise Officer. 1 Section 6 of the Act ibid. 2 Section 44(2) ibid. 3 Section 41(3) ibid.

86

Appendix ‘B’ referred to in para 3.31 (c) Rates of Export Duty

Sr. No.

1997-98 to 2001-02

Rupee

2001-02

1. Indian made Foreign Liquor 75 degree. Bulk/bottled (per proof liter)

2.00 NIL

2. Read to drink Beverages upto 20 degree Proof stranth (Per B.L.)

2.00 NIL

3. Rum 75o for troops sold through Canteen Store Departments (per P.L.)

0.50 NIL

4. Country Liquer 50 degree (per PL)

1.00 NIL

5. Whisky of 75 degree (per PL)

2.00 NIL

6. Rum/Gin/Whisky 65 degree (per PL)

1.00 NIL

1997-98

1998-99

1999-00

2000-01 to 2001-02

7. Rum/Gin/Whisky 75degree (per PL)

-- 2.00 1.00 2.00

8. Beer (per BL) 0.38 0.38 0.38 0.77

9. Rectified spirit (per PL)

0.60 (per PL)

0.60 (per BL)

0.36 (per PL)

0.36 (per PL)

87

10. Malt Spirit (Per PL) 1.50

11. Denatured spirit (per BL)

0.50

12. Industrial Alcohol (per B.L.)

0.50

13. Bhang (per 10 kilograms or less)

25.00

14. Imported Foreign liquor

2 w.e.f. 2001-02

As above in the case of Indian liquor/spirit.

88

Appendix ‘C’ Referred to in Para 4.8.

The rate of duty on beer manufactured in any brewery licensed in Punjab or Indian made beer when imported into Punjab shall be as follows:-

Sr. No.

97-98 98-99 99-00 00-01 01-02

1. Beer having alcoholic contents 3.25 % to 5.25 % (per BL)

7.70 7.70 7.70 10 12

2. Beer having alcoholic contents 5.25 % to 8.25 % (per BL)

7.70 10 10 12 12

89

Appendix ‘F’

(Referred to in Para 9.8)

Rates of Fixed Fee.

Sr. No.

Kind of Licence

Particulars of licences

Rate of Fixed Fee.

1997-98

1998-99

1999-2000

2000-01

2001-2002

1. 2. 3. 4. 5. 6. 7. 8.

1. L-1 Wholesale and retail vend of foreign liquor to the trade only.

3,00,000 Security 15000

5,00,000 Security 15000

7,00,000 Security 15000

5,00,000 Security 15000

5,00,000 Security 15000

Additional licence fee

(a) IMFL

(b)Beer

(c) Imported foreign liquor /other than wine, Beer, Sweets and Cider

(d) Imported foreign wine, Beer, Sweets and cider

-- -- -- (a) Re. 1/- Per B.L.

(b) Re. 1/- per B.L.

(c) Rs. 60/- per B.L.

(d) Rs. 20/- per B.L.

-Do-

2. L-2A Urban 1000 1000 1000 1000 L-IA 10,000

1000

Rural 500 1000 1000 1000 1000

90

3. L-3, L-4 & L-5.

60,000 Security 10,000

1,20,000 Security 10000

1,20,000 Security 10000

1,20,000 Security 10,000

1,50,000 Security 10,000

4. L-3A, L-4A & L-5A

(i) For towns with population one lakh or more

50,000 1,00,000

1,00,000 1,00,000

Ditto

(ii) For other towns.

30,000 60,000 60,000 60,000 Ditto

5. L-5 (a) Supplementary pub license for sale of draught Beer

10000 10000 50000 15000 30000

(b) Separate pub licence for the sale of draught Beer only

--- 50000 Security 10000

50000 Security 10000

30000 Security 10000

Ditto

6. L-12-C

Retail vend of Foreign liquor at a club

50000 1,00,000

1,00,000 1,00,000

Ditto

7. L-13 Wholesale vend of country liquor

10000 10000 10000 10000 Ditto

8. L-13A Wholesale vend of Beer containing alcoholic contents not exceeding 3.25 %

1000 1000 1000 1000 Ditto

9. L-17 Vend of denatured spirit

2000 Security 2000

3000 Security 2000

3000 Security 2000

3000 Security 2000

5000 Security 2000

91

(i) Denatured spirit upto 500 bulk litres

(ii) Exceeding 500 B.L.

3,000 Security 3,000

5,000 Security 3,000

5,000 Security 3,000

5,000 Security 3,000

8,000 Security 3,000

10.

L-52 Ihatas

(i) Urban PML

5,000 5,000 5,000 5,000 Ditto

(ii) Rural PML

1,500 5,000 5,000 5,000 Ditto

(iii) Urban IMFL

15,000 15,000 Corporation Towns 15,000

25,000 Ditto

(iv) Rural IMFL

5,000 5,000 Other Urban Area 15000

15,000 Ditto

Other Rural Area 5000

5,000 Ditto

11.

-- Sub-vend for PML

5,000 --- 20,000 20,000 10,000

92

Rates of assessment fee per Bulk litre Appendix – ‘G’ referred to in Para 9.11.

Sr. No.

1997-98

1998-99

1999-00

2000-01

2001-02

I Indian made foreign Liquor sold at L-2 vends for 97-98 when a licensee lifts.

20 -- -- -- --

(i) IMFL more than 35 % of the PML fixed for his group of vends if the incidence does not exceed Rs. 90/- per bottle

-- -- -- -- --

(ii) IMFL more than 40 % of the PML quota fixed for his group of vends if the incidence does not exceed Rs. 100/- per bottle.

-- -- -- -- --

(iii) IMFL more than 45 % of the PML Quota fixed for his group of vends if the incidence does not exceed Rs. 110/- per bottle.

-- -- -- -- --

93

(iv) IMFL more than 50 % of the PML Quota fixed for his group of vends if the incidence exceeds Rs. 110/- per bottle

-- -- -- -- --

II L-3, L-4, & L-5.

(i) Indian made spirit

50.00 60.00 60.00 60.00 -do-

(ii) Imported spirit

50.00 60.00 60.00 60.00 -do-

(iii) Wine 5.00 7.00 7.00 7.00 8.00

(iv) Indian made cider

1.00 1.00 1.00 1.00 1.00

(v) Imported cider

1.25 2.00 2.00 2.00 --

(vi) Beer (all types)

7.70 per BL

7.70 per BL

7.70 8.00 -do-

III L-3A, L-4A & L-5A

Beer (all types)

7.70 per bulk litre having alcoholic contents 3.25 % to 5.25 % and 5.25 % to 8.25 %

-do- 7.70 -do-

8.00 per bulk litre having alcoholic contents 3.25 % to 5.25 % to 8.25 %

8.00 -do-

94

IV L-9

(i) Rum 7.00 20.00 20.00 30.00 23.00

(ii) Indian made foreign spirit

20.00 40.00 40.00 50.00 -do-

(iii) Imported spirit

20.00 40.00 40.00 50.00 ---

(iv) Wine 2.00 4.00 4.00 8.00 -do-

(v) Indian made cider

0.10 1.00 1.00 2.00 -do-

(vi) Imported cider

0.40 1.00 1.00 2.00 -do-

(vii) Beer all types

-- -- -- 8.00 -do-

(viii) Imported Foreign Liquor (other than wine, cider & Beer)

-- -- -- -- 200

V L-12C

(i) Indian made spirit

50.00 60.00 60.00 60.00 -do-

(ii) Beer 3.20 % to 5.25 % and 5.25 % to 8.25 %

7.70 per BL

7.70 per BL

7.70 8.00 -do-

(iii) Imported spirit

50.00 60.00 60.00 60.00 -do-

(iv) Wine 6.25 7.00 7.00 7.00 8.00

95

(v) Indian made cider

1.00 1.00 1.00 1.00 -do-

(vi) Imported cider

1.25 2.00 2.00 2.00 ---

VI L-5B

Draught Beer

-- 14.40 per BL

7.70 8.00 -do-

Wine -- -- -- -- 8.00

96

Appendix – ‘H’ referred to in Para 9.13.

Sr. No.

Kind of liquor 1997-98

1998-99

1999-00

2000-01

2001-02

1. Indian made foreign liquor 75 degree

40.00

(i) Economy Brand

40

(ii) Medium Brand

48

40.00

27.50 Ditto

(iii) Premium Brand

56

(iv) Deluxe Brand

64

40.00

40.00 Ditto

2. Foreign brands of liquor of any strength

64.00 40.00 40.00

-- --

3. Ready to Drink beverages upto 20 degree proof strength

64.00 40.00 40.00

40.00 Ditto

4. Country liquor 50 degree

3.00 3.25 3.25 4.00 Ditto

5. Rum/Gin/Whisky 65 degree

3.00 3.25 3.25 4.00 Ditto

6. Whisky 75 degree

3.00 3.25 -- -- --

7. Rum/Gin Whisky 75

-- 3.25 -- 4.00 Ditto

97

degree

8. Rum 75 degree for troops sold through canteen store Deptt.

40.00 40.00 40.00

27.50 Ditto

9. Malt/Ractified spirit when not used for medicinal and toilet preparation

15.00 15.00 15.00

15.00 Ditto

10. (a) Beer having alcoholic contents 3.25 % to 5.25 % (per BL)

4.60 7.70 7.70 10.00 12.00

(b) Beer having alcoholic contents 5.25 % to 8.25 % (per BL)

7.70 10.00 10.00

12.00 Ditto

11. Cider (per bottle)

1.00 5.00 5.00 5.00

12. Bhang per 10 kilograms or less

25.00 25.00 25.00 25.00

13. Excise opium (per K.G.)

690.00

1000.00

1000.00

1000.00

98

Appendix I referred to in Para 9.13 The rate of duty on Indian made sweets and wines, per Bulk litre manufactured under a licence in Punjab or imported in to Punjab.

Sr. No.

Kind of liquor 1997-98

1998-99

1999-00

2000-01

2001-02

I Sweets and wines containing proof spirit upto 20 %

1.0 Ditto Ditto Ditto Ditto

II Sweets and wines containing proof spirit between 20 % to 30 %

4.0 Ditto Ditto Ditto Ditto

99

Appendix [A] referred to in Para 3.16

List of register to be maintained in a Distillery

Sr. No.

Form No.

Particulars Reference to the Punjab Distillery Rules, 1932 under which maintained.

1. D-4 General Register Paras 11.22 and 11.51 of Excise Manual Vol. III

2. D-5 Table Book (Sub-Fermentation Vat)

Rule 66`

3. D-6 Table Book (Spirit Receiver vats)

-Do-

4. D-7 List of persons employed in the distillery

Rules 20 and 23

5. D-8 Licensee General Register Rules 38,70,72 and 74

6. D-9 Inspector’s Dairy Rules 90 (ii) and 86

7. D-10 Sub-Register Rules 38 and 73

8. D-11 Main wash Register Rules 73.74 and 75

9. D-12 Abstract of distillery operations

Rules 86 and Para 11.54 of Excise Manual, Vol. III

10. D-12A Abstract of Re-distillation operation

11. D-13 Register of receipt of bulk into the spirit store room and the issue of bulk and bottled spirit from the store room.

12. D-13A

Register of receipt and disposal of spirit received in bond from the distilleries.

100

13. D-13B Register of Bottling operations Rules 93 (a)

14. D-14 Register of daily total of bulk issued and in stock

Rule 90 (b)

15. D-14A

Register of daily total of bottled spirit stored issued and in stock

Para 11.34 of Excise Manual, Vol. III.

16. D-15 Register of issues of spirit on which duty has been paid in advance

Rule 120

17. D-16 Register of spirit compounded/denatured and passed into stock

Rules 92 and 105

18. D-17 Register of Lock Tickets Rule 57

19. D-18 Register of vat tickets Rule 105

20. D-20 & D-20A

Distillery Pass Rule 114

21. D-21 Register of Spirit Rule 90

22. D-22 Weighment Register Rule 108 A

23. D-23 Register showing levy of overtime fee

Rule 32.

24. D-24 Monthly stock register of Sample issued

Rules 115(g)

25. D-25 Accounts of disposal of duty free spirit

Rules 38 and 40.

26. D-26 Register of wastage in spirit store room

Rule 101-A

27. D-27 Register of wastage in Bottling operation

Rule 101-A

28. D-28 Register of wastage in Bottled Spirit store room.

101

Appendix [‘D’] referred to in para 5.8. The following registers and forms have been prescribed for maintenance at a Bonded Warehouse:-

1. Form B.W.H. 1 Application form

2. Form B.W.H. 2 Licence Form

3. Form B.W.H. 3 Licensee’s Bond

4. Form B.W.H. 4 General Register (regarding building machinery, equipment, etc.)

5. Form B.W.H. 5 Table Book Spirit Vats

6. Form B.W.H. 6 List of persons employed in the warehouse

7. Form B.W.H. 7 Licensees stock register of empty bottles

8. Form B.W.H. 8 Register of receipts and disposals of liquor

The following distillery and brewery forms and registers will apply mutatis-mutandis in the case of bonded warehouses:-

1. D-9 Inspector’s Diary

2. D-13 Issue register

3. D-13-B Bottling operation register

4. D-14 Bulk stores and issue register

5. D-14-A Bottled Spirit Stores and issue register

6. D-15 Advance duty register

7. D-16 Spirit Compounded issued and passed into stock register.

8. D-17 Lock tickets

9. D-18 Vat tickets

102

10. D-19 Bond regarding payment of duty in arrears

11. D-20 & L-34

Pass for the removal of liquor from warehouse.

12. D-22 Weighment register

13. D-23 Overtime duty fee register

14. D-24 Monthly register of samples

15. D-15 Register regarding issue of beer from the warehouse

16. D-15-A Duty realised on beer.

103

Appendix [J] referred to in para 9.16.

Sr. No.

Form No.

Particulars of Register

1. M-1 Register of licences granted on fixed fee

2. M-2 Register of licences granted on fees determined by auction/tender.

3. M-3-A Register of permits granted for the transport from a distillery in Punjab and import of denatured spirit.

4. M-3-B Register of permits granted for transport/import of foreign liquor from the distilleries of L.I. licences

5. M-6 Register of cases detected under the Excise Act.

6. M-7-A Register of liquor/denatured spirit imported/transported into the district

7. M-18 “Khatauni” of occasional payments such as fines etc.

8. M-24 State of Demand and collection and balance of Excise income

9. M-25 Statement of refund of Excise Revenue

10. Daily Collection register.

104

Appendix ‘K’ referred to in Para 9.17.

LIST OF STATEMENTS

List of Statements etc. received periodically in the Excise and Taxation Commissioner’s Office, Punjab, from Local Officers etc. of the Department under the Punjab Excise Act, 1914, etc.

Sr. No.

Particulars of statement From whom received

Due date

1. 2. 3. 4.

A – EXCISE BRANCH

I – Annual

1. Annual excise Administration Report

All Deputy Excise and Taxation Commissioner’s holding charge of Divisions in Punjab

Within 7 days of close of month following the year under report

2 Statement in form M-14-A embodying results of auction of urban licenses for retail vend of country spirit, wholesale and retail vend of foreign liquor, retail vend of beer and wholesale vend of bhang

Ditto With 4 days of conclusion of auctions.

3. Statement in form M-14-B embodying results of auction of rural licenses for retail vend of country spirit

Ditto Ditto

4. Statement showing account of ganja and bhang

All Officers holding charge

Within 7 days of

105

of districts in Punjab

close of month following the year under report

5. Indian Hemp-production and cultivation statistics

Ditto Ditto

6. Statement showing number of licenses, fees and duty collected/foregone/refunded on Medicinal and toilet preparations and Excise establishment charges incurred by Government

All excise and Taxation Officers Holding charge of districts in Punjab

Within 7 days of close of month following the year under report

7. Statement showing names of firms and Factories authorised to manufacture galenical preparations (Extracts and Tinctures) of Indian Hemp

Ditto Ditto

8. Certificate in form M-65-A showing receipt, expenditure and balance of Excise Secret Service

All Excise and Taxation Officers holding charge of districts in Punjab

Within 7 days of close of month following the year under report

9. Estimates in form NDS-3 regarding imports of raw materials from foreign countries.

All Deputy Excise and Taxation Commissioners holding charge of Divisions in Punjab

Ditto

106

10. Particulars in form NDS-5 of import, export, manufacture, stock, etc. of dangerous drugs

Ditto Ditto

11. Particulars in form NDS-6 regarding export, import and stock etc. of dangerous drugs

Ditto Ditto

12. Statement in form N-13 showing supply and expenditure of Excise Opium

All Officers holding charge of districts in Punjab

Within 7 days of close of month following the year report

13. Statement in form M-15 regarding licenses granted on fixed license fee etc.

Ditto Ditto

II – Half Yearly

14. Statement in form M-12 showing supply and expenditure of Excise Opium

All Excise and Taxation Officers holding charge of districts in Punjab

Within 7 days of the close of the half year under report.

III - Quarterly

1. Statement in form M-55 showing quantities of Indian made Foreign Spirit, Country Spirit, Rectified Spirit and Indian made Beer imported from outside States

All Excise and Taxation Officer’s holding charge of districts in Punjab

Within 7 days of close of the quarter under report

2. Statement in form M-56showing quantities of

Ditto Ditto

107

Indian made Foreign spirit, Country spirit Rectified Spirit contained in medicinal and other preparations and Indian made Beer exported from Punjab to outside States

3. Statement showing deficiencies in finished stores of bonded manufactories

All Excise and Taxation Officer’s holding charge of district in Punjab

With 7 days of close of the quarter under report

4. Statement showing particulars of opium addicts

Ditto Ditto

5. Statement in form J-1 showing results of checking of Excise vends made by the Excise Inspectorate staff and the Excise and Taxation Officer holding charge of the District

Ditto Ditto

IV - Monthly

1. Statement No. I indicating issues of spirituous preparations from Chemical Works within Punjab

All Officers incharge of Chemical works in Punjab

Within 5 days of close of the month under report.

2. Statement No. II indicating issues of spirituous preparations from Chemical Works outside Punjab

Ditto Ditto

3. Return in form RTI of transactions conducted at bonded manufactories

Ditto Ditto

108

4. Statement showing lifting of quotas of country spirit by licensed vendors

All Officers holding charge of District in Punjab

Within 5 days of close of the month under report

5. Comparative statement showing retail sales of country spirit, foreign spirit, beer, opium and bhang

Ditto Ditto

6. Statement showing number of permits granted for supply of Rum to troops stationed in Punjab through the Canteen Stores Department (India)

Ditto Ditto

7. Distillery Return in form D-4 (Part-15) showing stock of distilling base and empty bottles meant for issue of country Spirit, Indian made Foreign Spirit etc.

Ditto Ditto

8. Statement in form M-24 of Demand, Collection and Balance of Excise Income

All Officers holding charge of district in Punjab

Ditto

V - Fortnightly

1. Statement in form MC-7 showing

All distillery Inspectors

Within 3 days of close of the

109

receipt of molasses in Punjab

fortnight under report

2. Statement showing allotment, receipt, consumption and balance of molasses

Ditto Ditto

3. Statement showing molasses used and yield of spirit

Ditto Ditto

VI - Weekly

1. Return in form M.C.-6 showing production and disposal of molasses

All Officers, incharge of Sugar Mills in Punjab

Within 2 days of close of week under report

2. Return showing receipt of molasses production and consumption of all kinds of spirit and stock of empty excise bottles with distilleries in Punjab

All Distillery Inspectors

Ditto

B – EXCISE INTELLIGENCE BRUEAU, PUNJAB

I – Annual

1. Report on the working of International Treaties on Narcotic Drug

All Deputy Excise and Taxation Commissioners holding share of Divisions

Within 7 days of the close of month following the year under report

II- Quarterly

1. Statements in form A & B regarding seizure of Dangerous Drugs

All Excise and Taxation Officers holding charge of Districts in Punjab

Within 7 days of close of the quarter under report.

110

2. Statement of opium-smoking offences

Ditto Ditto

3. Statement showing price of illicit opium

Ditto Ditto

4. Statement showing result of checking of Excise vends made by the Police

Ditto Ditto

III – Monthly

1. Statement in form M-33-B showing detection work done by the Excise Inspectorate and Police Staff

All excise and Taxation Officers holding charge of districts in Punjab

Within 5 days of close of the month under report

2. Statement showing result of Excise raids conducted by the normal Police Staff on their own initiative with and without assistance of the Excise Inspectorate Staff

Ditto Ditto

3. Statement showing result of efforts made by the Excise Inspectorate Staff for detection and eradication of illicit distillation adulteration and under malpractices indulged in by licensed vendors

Ditto Ditto

111

4. Statement showing result of special campaigns launched by Excise Police Reserve for suppression of illicit distillation and other forms of excise crime

Ditto

(Except Ropar, Hoshiarpur and Kapurthala)

Ditto

IV – Fortnightly

1. Abstract of detection work done by Excise Police Reserve prepared by Police Incharge and commented upon by Excise and Taxation Officer.

All excise and Taxation Officers holding charge of districts in Punjab (Except Ropar, Hoshiarpur and Kapurthala)

Within 5 days of close of the month under report.

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