MOHAN MEAKIN BREWERIES LTD. versus COMMISSIONER OF EXCISE, BIHAR AND ORS.

Citation: [1986] 2 S.C.R. 547 · Decided: 15-04-1986 · Supreme Court of India · Bench: R.B. MISRA · Disposal: Dismissed

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Judgment (excerpt)

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547 
v. 
OH«SSilll!R OF EICISI, BDWI. & ORS. 
APRIL 15, 1986 
[R.B. MISRA AND G.L. OZA, JJ,) 
Bihar and Orissa Excise Act, 1915 - Sections 27 & 28 -
~Difference of duty resulting from any increase in the rates of 
duty subsequent to import - Realisation of from importing or 
A 
B 
transporting licencees - Whether valid and permissible. 
C 
, 
Rate of duty on Indian made foreign liquor was enhanced 
• 
by Notification dated October 13, 1967 effective from November 
1, 1967. Consequently the Superintendent of Excise directed 
• the petitioner-company to pay the difference of duty on the 
balance of stock as on November 1, 1967. That demand order was 
D 
challenged by the petitioner under Art. 32. This Court in 
Hoblln !f.e•Jrfn B~es Ltd. v. Cowt""loner of kcfae, B1bar & 
Ora. [1969] 2 s.c.R. 457, held that in view of ss. 27 and 28 
of the Bihar & Orissa Excise Act 1915, and also in view of 
rule 147 framed by the Board of Revenue, such an order for 
recovery of the difference of duty cannot be passed and, 
E 
i- therefore, the demand was quashed, After this decision, an 
ordinance amending the Act was issued by the Governor of 
Bihar. It added a proviso to s, 28 of the Act, Pursuant to 
-
this amendment, a fresh notice of demand was issued by the 
Assistant Excise Colllllissioner for recovery of difference of 
4 duty on the stocks as on 1.11.67 which was earlier demanded 
F 
and quashed by this Court. 
The petitioner again filed a petition under Arti-cle 32 
challenging the fresh demand contending: (i) that in the 
scheme of the Act, s. 27 is the charging section and s, 28 
provides for procedure, Under section 27(a) the duty is G 
leviable on the import of excisable goods , and duty to be 
levied will be according to the rate in force on the date the 
goods are imported in the State of Bihar; (ii) that the 
incident of duty not having been amended by mere addition of a 
proviso to s. 28 the levy of additional duty according to the 
revised rate could not be charged; (iii) that the Act does not H 
A 
B 
c 
D 
E 
F 
G 
H 
548 
SUPREME COURT REPORTS 
(1986) 2 S.C.R. 
authorise the Executive under the delegated function 
by 
issuance of a Notification to revise the rates retrospec- \...-·• 
tively; (iv) that in the State of Bihar, there was no 
manufacture of Indian ude foreign liquor and thus in view of 
Articles 301, 303 and 304 of the Constitution, there is no 
justification for imposing or enhancing the excise duty on 
import of Indian made liquor in the State of Bihar; and ( v) 
that in view of the scheme of the said Articles of the 
Constitution, the duty which could be imposed on Indian made 
foreign liquor imported in the State of Bibar could only be~ 
justified as a countervailing duty but as no Indian made 
foreign liquor was manufactured in the State of Bibar, such a 
duty was not justified, and in any event, the notification 
enhancing the rate of duty is bad being unconstitutional. 
On behalf of the respondents-State, it was contended 
that there are manufacturers of Indian 1111de foreign liquor in• 
Bibar itself, that they have been manufacturing and selling 
Indian made foreign liquors and it could not be contended that 
there was no local •nufacturer of Indian made foreign liquor 
in the State of Bihar during the period to which the present 
dispute relates. 
Dismissing the petition, 
llKLD: 1. Sections 27 and 28 of the Bihar & Orissa Excise 
Act, 1915 put together provide for the schelll! of levy of 
excise duty and it could not be said that the two sections are 
in two separate water tight compart1111nts. (557 D) 
2. Under s. 27 when an excisable article is imported, 
this section provides an excise duty or countervailing duty at "( 
rate or rates that the State Govt. may direct could be 
imposed. By the proviso which has now been added to s. 28, it 
bas been provided that when any excisable article is imported 
or transported on paYlll!nt of duty according to the provisions 
of sub-el. (1) of cl. (a) or cl. (c) the difference of the 
duty resulting from any provision of the rates of duty 
subsequent to such import shall be realised or credited to the 
importing or transporting licence. lbis provides for a 
situation where after import or transport the rates is revised 
either enhanced or reduced still that can be adjusted on the 
basis of the stock in existence on the day when the rate is 
"-
MOHAN MEAKIN BREWERIES v. COMMR. OF EXCISE [OZA, J. ) 
549 
revised and this is what specifically was held in 

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