ARISTOCRAT AGENCIES,HYDERABAD ETC. versus EXCISE SUPERINTENDENT, HYDERABAD AND ORS. ETC.

Citation: [2000] SUPP. 5 S.C.R. 469 · Decided: 07-12-2000 · Supreme Court of India · Bench: A.S. ANAND, R.C. LAHOTI, SHIVARAJ V. PATIL · Disposal: Dismissed

Judgment (excerpt)

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ARISTOCRAT AGENCIES, HYDERABAD ETC. 
v. 
EXCISE SUPERINTENDENT, HYDERABAD AND ORS. ETC. 
DECEMBER 7, 2000 
[DR. A.S. ANAND CJ., R.C. LAHOTI AND SHIVARAJ V. PATIL, JJ.] 
Excise Laws : 
A 
B 
Countervailing duty-Rate of the duty chargeable-Held, duty is 
chargeable at the rate prevailing on the date of import and not at the rate C 
on the date of issue of permit-Section 21 of the Andhra Pradesh Excise Act, 
1966. 
Appellants, holders of distributor licence under State Rules, were 
granted import permits for liquor on payment of countervailing duty at the D 
rate prevailing on dote of grant of permits. State, by a notificntion on 8.2.1991 
issued under the provisions of the Andhra Pradesh Excise Act, 1966, 
enhanced the rate of countervailing duty from Rs. 45 to Rs. 70 per litre. The 
appellants imported liquor after the issue of the notification during tile validity 
of the permits. Excise Superintendent issued notices requiring the appellants 
to p:iy differential amount of the countervailing duty. Tile appellants fi!ed Writ E 
Petitions before High Court questioning the validity of the demand. The High 
Court dismissed the petitions. Hence these appeals. 
The appellnnts contended that since the countervailing duty had already 
been paid at the time of grant of the permits at the rate then in force, 
enhancement effected subsequently by a later notification could have no F 
application on the imports of liquor made by the appellant. 
Dismissing the appeals, the Court 
HELD: 1.1. Sub-section (2) of Section 21 of the Andhra Prodesh Excise 
Act, 1966 empowers the State Government, by notification, to levy G 
countervailing duty on any excisable article manufactured or produced 
elsewhere in India and imported into the State at such rate as may be specified 
in the notification and different rates may be specified for different kinds of 
excisable articles. Both excise duty and countervailing duty are required to 
be assessed and collected as soon as the taxable event arises. Excise duty being H 
469 
470 
SUPREME COURT REPORTS [2000) St:PP. 5 S.C.R. 
A essentially a duty on production or manufacture of excisable goods, the event 
attracting tax is the manufacture or production of the excisable goods. 
Countervailing duty, on the other hand, is required to be levied, assessed and 
collected when excisable articles are imported into the State. The object of 
levy and collection of countervailing duty is to counter-balance excise duty, 
B which is leviable on similar goods, if manufactured within the State. By its 
very nature and concept countervailing duty becomes leviable on the date of 
the import itself and is governed by rate of duty as in force on the date of 
import. It is irrelevant that at the time of obtaining a permit, the assessee 
also pays countervailing duty. In case the rate of duty continues to be the same 
as on the date of import, i.e., entry into the State of excisable goods, no extra 
C countervailing duty is payable but if the rate of duty is enhanced, it is the 
enhanced duty which becomes payable. (472-E, F, G, H; 473-AI 
1.2. The demand of differential amount of countervailing duty from the 
appellants was perfectly justified since the demand was made on the basis of 
the duty as in force on the date of import of the consignment into the State. 
D The duty was to be assessed and collected as in force at the time of import. 
(473-G) 
S.K. Pattanaik (Dead) through Lrs. v. State of Orissa & Ors., (2000) 1 
sec 413, referred to. 
E 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 486 of 1998. 
F 
From the Judgment and Order dated 8.11.91 of the Andhra Pradesh High 
Court in W.P. No. 7917 of 1991. 
WITH 
Civil Appeal Nos. 482-483 of 1998. 
Ms. K. Amreshwari Devi, Sr. Adv., Ashwini Kumar Chopra, B. Kan~ 
Rao, Ms. Sudha Gupta, T. Anil Kumar, G. Prabhakar, K. Ram Kumar, Asha G. 
Nair and G. Balasubramaniam for the appearing parties. 
G 
The Judgment of the Court was delivered 
Civil Appeal No. 486 of 1998. 
The short question which requires our consideration is whether 
countervailing duty is chargeable at the rate prevailing on the date of issue 
H of permit or on the date of actual import of liquor into the State? 
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ARISTOCRAT AGENCIES v. EXCISE SUPERINTENDENT 
471 
Brief facts necessary to answer the question may be noticed: 
A 
The appellants are holders of distributor licence in Form F.L. 47 issued 
under Andhra Pradesh Foreign Liquor and Indian Liquor Rules, l 970 
(hereinafter 'the R

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