LexThe KARNATAKA EXCISE ACT, 1965
Karnataka · state statute
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THE KARNATAKA EXCISE ACT, 1965
ARRANGEMENT OF SECTIONS
Statements of Objects and Reasons:
Sections:
CHAPTER I
PRELIMINARY
1. Short title, extent, commencement and application.
2. Definitions.
CHAPTER II
ESTABLISHMENT AND CONTROL
3. Appointment of Excise Commissioner.
4. Deputy commissioner.
4A. Joint Commissioner of Excise and Deputy Commissioner of Excise
5. Appointment of Superintendents of Excise and Deputy
Superintendents of Excise.
5A. Constitution of an Intelligence Bureau and appointment of
Superintendents and Deputy Superintendents of Excise (Intellig ence
Bureau)
6. Appointment of Inspectors of Excise, Sub- Inspectors of Excise and
other Subordinate Officers.
7. Delegation of powers.
CHAPTER III
IMPORT, EXPORT AND TRANSPORT
8. Import of intoxicant.
9. Export of intoxicant.
10. Prohibiting of transport of intoxicant.
11. Transport of intoxicant.
12. Permits for transport.
CHAPTER IV
MANUFACTURE, POSSESSION AND SALE
13. Manufacture, etc., of excisable article prohibited except under a
licence.
14. Possession of excisable articles in excess of the quantity prescribed.
15. Sale of excisable articles without licence prohibited.
15A. Consumption or allowing consumption of Liquor unlicensed Public
Places.
16. Establishment of distilleries and warehouses.
1966: KAR. ACT 21] Excise 357
16A. Licence to manufacture bottle or manufacture and bottle arrack for
sale.
16B. Licences granted for manufacture and bottling of arrack cease to be
valid.
17. Power to grant lease of right to manufacture, etc.
18. Lessee's permission to draw toddy.
19. Duties of licensees with regard to measurement and testing.
20. Prohibition of employment of children and of women.
21. Closing of shops for the preservation of public peace ,etc.
CHAPTER V
EXCISE DUTY AND COUNTERVAILING DUTY
22. Excise duty or countervailing duty on excisable articles.
23. Ways of levying such duties.
23A. Remittance of Excise Revenue through electronic means
24. Payment of fees for grant or renewal of lease or license
24A. Grant of Exclusive or other Privilege in respect of foreign liquor.
25. Tax for tapping tress from whom leviable.
CHAPTER VI
LICENCES AND PERMITS
26. Form and conditions of licence, etc.
27. Power to take security and counterpart agreement.
28. Technical defects, irregularities and omissions.
29. Power to cancel or suspend licence, etc.
30. Power to withdraw licence.
31. Surrender of licence.
CHAPTER VII
OFFENCES AND PENALTIES
32. Penalty for illegal import, etc.
33. Penalty for rendering denatured spirit fit for human consumption.
34. Penalty for illegal possession.
35. Penalty for offence not otherwise provided for.
36. Penalty for misconduct of licensee, etc.
37. Penalty for adulteration, etc., by licenced vendor or manufacturer.
38. Penalty for consumption in Chemist's shop, etc.
38A. Penalty for allowing permises, etc, to be used for the purposes of
committing an offence under this Act.
Excise [1966: KAR. ACT 21 358
39. Manufacture, sale or possession by one person on account of
another.
40. Presumption as to commission of offence in certain cases.
41. Criminal liability of licensee for acts of servants.
42. Enhanced punishment after previous conviction.
42A. Security for abstaining from commission of certain offences
43. Liability of certain things to confiscation.
43A. Confiscation by Excise Officers in certain cases
43B. Issue of show-cause notice before confiscation under section 43A
43C. Order of confiscation when an offender is not known or cannot be,
found etc.
43D. Revision.
43E. Appeal.
43F. Award of confiscation not to intrefere with other punishments
43G. Bar of jurisdiction in certain cases
44. Omitted.
45. Compounding of offences.
45A. Omitted
45B. Omitted
46. Penalty on Excise Officer making vexatious search, seizure, detention
or arrest.
47. Penalty for Excise Officer refusing to do duty.
48. Penalty for vexatious delay.
49. Penalty for abetment of escape of persons arrested, etc.
CHAPTER VIII
DETENTION, INVESTIGATION AND TRIAL OF OFFENCES
50. Landholders, officers and others to give information.
51. Power to enter and inspect places of manufacture and sale.
51A. Thrid Party Inspection or special Audit
52. Power to arrest without warrant, to seize articles liable for confiscation
and to make searches.
53. Power of magistrate to issue a warrant.
54. Power to search without warrant.
55. Power of Excise Officers in matters of investigation.
56. Report by investigating Officer.
57. Report by Excise Officer.
58. Arrest, search, etc., how to be made.
1966: KAR. ACT 21] Excise 359
59. Security for appearance in case of arrest without warrant.
59A. Certificate of Inspectors of Excise to be evidence
60. Procedure for prosecution.
60A. Procedure to be followed by Magistrate
CHAPTER XI
APPEALS AND REVISION
61. Appeals.
62. Revision.
CHAPTER X
MISCELLANEOUS
63. Recovery of Government dues.
63A. Recovery of certain tax arrears as arrears of excise revenues.
64. Government lien on property of defaulters.
65. Recovery of dues by lessee under section 17.
66. Refund in cases of exported liquor.
67. Power of State Government to exempt, etc.
68. Protection of action taken under this Act.
68A. Suit or prosecution in respect of acts done under colour of duty not to
be entertained without sanction of the State Government.
68B. Bar of jurisdiction of Civil Courts
68C. Injection not to be granted in respect of recovery of exercise dues
68D. Excise revenue to be paid irrespective of pendency of any Writ
Petition, Suit, etc
69. Limitation of suits.
70. Offences by companies, etc.
71. Power to make rules.
72. Repeal and saving.
STATEMENTS OF OBJECTS AND REASONS
I
Act 21 of 1966. - After reorganisation of the States on 1st November
1956, there are different Acts in force in the New Mysore State Viz., in Old
Mysore Area and Hyderabad Karnataka area and Madras Karnataka area
respectively as noted below:-
1. The Mysore Excise Act, 1901 (Act No. V of 1901).
2. The Hyderabad Abkari Act, 1316 (No.1 of 1316 F).
3. The Madras Abkari Act, 1886 (Madras Act I of 1886).
Excise [1966: KAR. ACT 21 360
The existence of different sets of laws in different areas causes
considerable administrative and procedural difficulties and also in
conveniences in the proper implementation of Excise Act, on a uniform
basis throughout the State. Therefore, with a view to have a uniform law for
the entire New Mysore State, a uniform Excise bill has been prepared and it
replaces the Acts referred to above.
(Obtained from L.A. Bill No. 4315 dated 16-6-1962.)
II
Amending Act 1 of 1970.- A large number of licensees dealing in Indian
made Foreign Liquor hav e challenged the validity of levy and collection of
litre fee on Indian made foreign liquors, on the ground that the Mysore
Excise Act 1965 does not specifically empower the Government to levy litre
fees. It was considered necessary to make specific provis ion to levy excise
duty in the form of litre fees with retrospective effect.
At present there is an Enforcement Branch in the Excise Department,
with a Deputy Commissioner and a number of Excise Officers. They have
been detecting cases of illicit manufact ure, sale, transport, possession,
import and export of liquors.
It was considered necessary to give statutory status to the Intelligence
Bureau so that the work of the officers could be carried on in a more
effective manner under the authority of law.
In order to ensure expeditious disposal of the trial of offences under the
Act, it was considered necessary to provide that offences under the Act
should be tried summarily.
As the Houses of Legislature were not in Session and the matter was
urgent, the Mys ore Excise (Second Amendment) Ordinance, 1970 was
promulgated on the 7th August 1970, for the purposes indicated above and
for making some other provisions found necessary for carrying on the
administration of the Excise Department effectively.
This Bill is intended to replace the Ordinance.
(Vide Notification No. 5249 / L.A., Bangalore-1, dated 11-9-1970.)
III
Amending Act 1 of 1971.- The Mysore Excise Act, 1965 (Mysore Act 21
of 1966) does not empower the State Government to delegate its powers
under the Act to the Excise Commissioner or to any other officer. It was
considered necessary for the effective implementation of the Act to have
power enabling the Government to delegate its powers under the Act to the
Excise Commissioner or to any other offi cer. In order to effective prevent
commission of certain offences, it was considered necessary to provide the
minimum punishment for such offences. It was also considered necessary
1966: KAR. ACT 21] Excise 361
to prohibit the sale or supply of consumption of any intoxicant in a hotel,
boarding house or refreshment room not licensed under the Act except in a
place used for lodging of persons in such hotel or boarding house or
refreshment room. In the light of the experience gained in the working of the
Act, it was also considered necessary to make certain other amendments.
For this purposes, the Mysore Excise (Amendment) Ordinance, 1969,
was promulgated. The Bill seeks to replace the Ordinance.
(Published in the Karnataka Gazette (Extraordinary) Part IV -2A No. 9
dated 10-1-1970 at page 9.)
IV
Amending Act 61 of 1976. - Under section 67 of the Karnataka Excise
Act, 1965, the State Government may exempt or reduce the excise duty
leviable under section 22 of the said Act on any liquor sold for use or
consumption by the members of the Armed Forces of the Union. In exercise
of these powers, Government has reduced the excise duty leviable on RUM
manufactured in the State and sold for use or consumption by the Armed
Forces of the Union and exported outside the State to twenty five paise per
proof litre.
Representations have been made to Government from certain para -
military Units for granting them concessional rate of export duty on supplies
of Rum. Some of these para- military Units are subject to Army Act and are
being deployed in the border areas in high altitudes and in times of
operation, they are also engaged in operational duty along with the Army in
the forward areas. Para-military Unit cannot however be regarded as Armed
Forces and granted the concessional rate of excise dut y on RUM unless
Section 67 of the Karnataka Excise Act 1965 is amended. Considering
these facts, the issue of Rum at the concessional rate of export duty to para-
military Units is justified. Hence, for this purpose Section 67 of the
Karnataka Excise Act had to be amended.
As the Karnataka legislative Assembly was not in session and as the
matter was urgent, the Karnataka Excise (Amendment) Ordinance, 1976
was promulageted.
This Bill seeks to replace the said Ordinance.
(Published in the Karnataka Gazette (Extraordinary) Part IV -2A as No.
4424 dated 8-11-1976 at page 3.)
V
Amending Act 32 of 1982. - Consequent on the new Code of Criminal
Procedure 1973 (Central Act 2 of 1974), coming into force with effect from
1st April 1974 the nomenclature and relevant sections referred to in the
Karnataka Excise Act has to be substituted.
Excise [1966: KAR. ACT 21 362
At present under Section 67 the State Government is empowered to
exempt or reduce either prospectively or retrospectively the excise duty
payable under section 22 of any liquor sold to certain categories of
institutions. The Accountant General has argued that licence fee is not in the
nature of excise duty or countervailing duty and therefore exemption cannot
be granted with retrospective effect to the licence fee. Therefore it is
proposed to take the power to exempt licence fee also in respect of certain
categories of institutions by amending clause (a) of section 67 of the said
Act.
Hence the Bill.
(Published in the Karnataka Gazette (Extraordinary) Part IV -2A as No.
167 dated 10-3-1981 at page 4)
VI
Amending Act 28 of 1987. - It is considered necessary to amend the
Karnataka Excise Act, 1965 to provide that no licence to manufacture or to
bottle, or to manufacture and bottle arrack for sale shall be granted to
persons who are not the holders of distillery licence, under section 16.
As the Karnataka Legislative Council was not in session and the matter
was urgent the Karnataka Excise (Amendment) Ordinance, 1987 (Karnataka
Ordinance 2 of 1987) was promulgated.
This Bill seeks to replace the said Ordinance.
(Published in the Karnataka Gazette (Extraordinary) Part IV -2A as No.
574 dated 2-9-1987 at page 3.)
VII
Amending Act 36 of 1987. - It is considered necessary to amend the
Karnataka Excise Act 1965 (Karnataka Act No. 21 of 1966) to provide for
stringent measure to prevent illegal import, export, transport, manufacture
and possession of intoxicants.
Provision is also proposed for closure of liquor shops in the event of out -
break of infectious diseases.
As the existing punishm ent provided under sections 32 and 34 is
inadequate, a provision is made to enhance the same.
Similarly, the fee for compounding of offences under section 45 is also
enhanced.
Section 55 is amended to provide for the investigation of offences arising
under section 38 and 38A by the Excise Officers.
Provision is further made for confiscation by the Excise Officers of the
vehicle involved in a commission of offences under the Act. Provision is also
made for appeal and revision against the order of confiscation.
1966: KAR. ACT 21] Excise 363
The jurisdiction of Criminal Courts is taken away from adjudicating the
matters pertaining to confiscation of properties.
The remaining amendments are consequential in nature.
As the Karnataka Legislative Council was not in session and the matter
was urgent, the Karnataka Excise (Second Amendment) Ordinance, 1987
(Karnataka Ordinance No. 4 of 1987 ) was promulgated.
This Bill seeks to replace the said Ordinance.
(Published in the Karnataka Gazette (Extraordinary) Part IV -2A as No.
576 dated 2-9-1987 at page 8.)
VIII
Amending Act 1 of 1994. - It was considered necessary to amend the
Karnataka Excise Act, 1965 to terminate the existing licences for
manufacturing and bottling of arrack given to the private distillery by the end
of 30th June, 1993 and to entrust the manufacturing and bottling of arrack
to the Government agencies like Mysore Sugar Company and Mysore Sales
International Limited with effect from the 1st July 1993.
As the matter was urgent and both the Houses of the State Legislature
were not in session, the Karnataka Excise (Amendment) Ordinance 1993
(Karnataka Ordinance 6 of 1993) was promulagted.
This Bill seeks to replace the said Ordinance.
Hence the Bill.
(Obtained from L.A. Bill No. 29 of 1993. )
IX
Amending Act 2 of 1994. - The High Court of Karnataka in Writ Petition
No. 1956 of 1971 had declared sub- rule (1) of rule 8 of the Karnataka
Excise (Sale of Indian and Foreign Liquors) Rules, 1968 as invalid in so far
as it relates to levy of licence fee retail vending of Indian and Foreign
Liquors. It also directed the State Government to refund the petitioner the
amount collected from him with in three years next before 2- 8-1971 by way
of licence fee for retail vending of Indian and Foreign Liquors. The Supreme
Court in civil appeal no. 1801 of 1974, while confirming the judgement of
the High Court has held that rule 8(1) has gone beyond the enabling
provision in the section, by requiring licence fee to be paid. It has also
obesrved that it may be posible for the Le gislature to make a statutory
provision for a licence fee of the type contemplated under the rules but
without authority of the statute a rule of the type impugned should not have
been made.
Accordingly, it was considered necessary to amend the Karnataka Excise
Act ,1965, retrospectively to take specific power for making rules to levy fee
and also to validate the collection of fee made under the impugned rule.
Hence the Bill.
Excise [1966: KAR. ACT 21 364
(Obtained from L.A. Bill 30 of 1993.)
X
Amending Act 2 of 1995. - It i s considered necessary to restrain the
Civil Courts from granting injunctions for recovery of Excise revenue and to
bar jurisdiction of Civil Courts in respect of any action taken, or to be taken
by such officer or authority in pursuance of powers conferred under the
Karnataka Excise Act, 1965.
Hence the Bill.
(Obtained from L.A. Bill No. 42 of 1993.)
XI
Amendeing Act 7 of 1997. - It is considered necessary to amend the
Karnataka Tax on Luxuries (Hotel, Lodging Housed and Marriage Halls) Act,
1979 (Karnataka Act 22 of 1979), the Karnataka Tax on Entry of Goods Act
1979 (Karnataka Act 27 of 1979), the Karnataka Tax on Professions,
Traders, Callings and Employments Act, 1976 (Karnataka Act 35 of 1976),
the Karnataka Excise Act, 1966 (Karnataka Act 21 of 1966), the Karnataka
Entertainment Tax Act, 1958 (Karnataka Act 30 of 1958), the Karnataka
Agricultural Income tax Act, 1957 (Karnataka Act 22 of 1957), the
Karnataka Sales Tax Act, 1957 (Karnataka Act 25 of 1957), the Mysore
Betting Tax Act, 1932 (Mysore A ct IX of 1932), and to give effect to the
proposals made in the Budget Speech and matters connected therewith.
Certain consequential amendments are also made.
Hence, the Bill.
(Obtained from L.A. Bill No. 12 of 1997.)
XII
Amending Act 21 of 1998. - Certain Posts of Deputy Commissioner of
Excise have been recently upgraded as Joint Commissioner of Excise. The
Joint Copmmissioner of Excise is required to exercise statutory powers
under the Karnataka Excise Act , 1965. But, the defintion "Excise Officer
"does not include Joint Commissioner of Excise. The term "Joint
Commissioner of Excise" is also not defined in the Act. Therefore, it is
considered necessary to amend the Karnataka Excise Act, 1965,-
(i) to define the term "Joint Commissioner of Excise";
(ii) to bring the Joint Commissioner of Excise within the defintion of
Excise Officer; and
(iii) to enable the Joint Commissioner of Excise to exrecise certain
statutory powers.
Hence the Bill.
1966: KAR. ACT 21] Excise 365
(Obtained from L.A. Bill No. 5 of 1998)
XIII
Amending Act 12 of 1999. - To provide a deterrent in order to minimise
the Excise offences it is proposed to prescribed a minimum penalty of fine of
Rs. 5,000 and a maximum of Rs. 25,000 for each offence under section 45
of the Karnataka Excise Act, 1965. Presently the maximum penalty leviable
under this section is fine of Rs 5,000 only. Accordingly policy announcement
has been made in the Budget Speech 1998- 99. In order to give effect to the
said policy announcement s ection 45 of the Karnataka Excise Act, 1965
requires amendment.
Hence the Bill.
(Obtained from L.C. Bill No. 8 of 1998. File No.
XIV
Amending Act 21 of 2000. - Representation were made to the
Government by the manufacturers, W holesalers and Retail Traders of
Liquor for Merger of Sales Tax with the Excise duty, since for payment of
Sales Tax and Excise duty, the trade has to deal with two Department
resulting in administrative and procedural difficulties and inconvenience.
Further merger of sales tax with Excise duty will simplify the procedural
complication etc. On examination of the above representations the
Government considered it necessary to amend the Karnataka Sales Tax
Act, 1957 and the Karnataka Excise Act, 1965, to provide for,
(i) levy of additional excise duty on the value, cost or price of the
excisable articles.
(ii) recovery of sales tax arrears as arrears of excise revenue.
(iii) treating tax or other amount due as arrears of excise revenue for the
purpose of recovery of such tax or other amount due.
Hence the Bill.
(Obtained from L.A. Bill No. 38 of 2000)
XV
Amending Act 15 of 2001. - To give effect to the proposals made in the
Budget Speech, it is considered necessary to amend the Karnataka Excise
Act, 1965.
Hence the Bill.
(Vide L.A. Bill No. 11 of 2001 Filed No. SAMVYASAHE 16
SHASANA 2001)
Excise [1966: KAR. ACT 21 366
XVI
Amending Act 38 of 2003.- It is considered necessary to amend the
Karnataka Excise Act, 1965.-
i) to remove the ambiguity in the definition of "toddy" and
"excise tree" by omitting the words " of which contains
alcohol and " appearing in the definition of excise tree;
ii) to provide for giving the interim custody of the property seized
under sub-section (1) of section 43A to the owners of such
property on production of a Bank Guarantee equal to the
value of the seized property;
iii) to provide for acceptance of money or imposition of penalty in
lieu of cancellation or suspension of a license for
contravention of conditions of license or of any rule made
under the Act.
Hence the Bill.
(LA Bil No. 4 of 2003 DPAL 38 SHASANA 2003)
XVII
Amending Act 27 of 2004. - Section 16-A of the Karnataka Excise
Act, 1965 provides for entrusting the task of manufacture and/or bottle
arrack for sale to a Company or agency owned or controlled by the State
Government or a State Government Department. Accordingly, at present,
M/s. MSIL and M/s. Mysugar Co., have been entrusted with this task. MSIL
does not have primary distillery. M/s. Mysugar Co., is not in a position to
supply the required quantity as the Company is in difficult financial position.
Of late, due to scarcity of molasses, which is the main raw material for
providing rectified spirit, the manufacture and supply of arrack has been
gradually affected. After the Government of India has resci nded Molasses
Control Order and the State has no control to regulate the manufacture and
sale of molasses. However, the Karnataka legislature has recently passed a
bill to regulate it and the same has been sent to Government of India to get
the assent of t he President. Further, there is an element of non -duty paid
arrack in the open market. In order to ensure supply of the required quantity
of rectified spirit for manufacture of arrack, it is necessary to liberalise arrack
manufacture.
Presently, inspection and scrutiny of records maintained by a
distillery or a brewery is the responsibility of the Excise Department. This
responsibility is discharged primarily by officers posted at the distillery or
brewery and through special inspections. However, more than the
inspection and scrutiny of records mandated by the Karnataka Excise Act,
1965, it is necessary to form an opinion on the output produced by the
manufacturer vis-à-vis the inputs consumed. The essential feature of such
an inspection/audit is to correlate the input and output. This is a specialised
1966: KAR. ACT 21] Excise 367
function for which expert help is necessary. A similar requirement is
mandated under section 14AA of the Central Excise Act, 1944. Section 51
of the Karnataka Excise Act, 1965 empowers Excise Commissioner, Deputy
Commissioner, Excise Officer and Police Officers to enter and inspect
places of manufacture and sale. In order to empower the proposed third
party similarly, it is necessary to amend the Karnataka Excise Act, 1965.
In the budget speech for the year 2004-05, the Hon’ble Deputy Chief
Minister had announced to liberalise manufacture of arrack by allowing
primary distilleries to undertake this activity. The primary objective of this
policy is to eliminate ‘seconds’ or non-duty paid arrack and to thus enhanc e
arrack revenues significantly. Further by liberalising the manufacture of
arrack it will be made as market driven such that it should not be
responsibility of the Government to supply arrack but rather the function of
demand and supply in the market.
Hence the Bill.
(L.A. Bill No. 19 of 2004)
XVIII
Amending Act 14 of 2005. - It is felt necessary to make the excise
law more stringent in order to net more revenue, check evasion of excise
duties, by taking away the existing compounding powers and making the
law more stringent by rendering the offences under the Act cognizable and
non-bailable.
Hence the Bill.
[L.A. Bill No. 13 of 2005]
XIX
Amending Act 27 of 2007.- In the Budget speech for the year
2007-08, it has been announced banning of sale of arrack in the State from
1st July 2007. Hence, it is considered necessary to amend section16A and
16B of the Karnataka Excise Act, 1965.
It is considered necessary to prevent hooch tragedies which
occurred in Bangalore and Hassan districts recently, claimi ng 45 lives and
one of the main causes of these tragedies has been the sale of illicit arrack
and spurious and adulterated liquor by unauthorized vendors in
unauthorized places. In order to prevent recurrence of such tragedies, it is
proposed to amend sect ion 37 by introducing stringent punishment to the
persons who indulge in adulteration of liquor with harmful poisonous
substances or chemicals or methyl alcohol or any other poison as defined in
Indian Poisons Act, 1919 or substances, which endanger human life or
cause grievous hurt to human beings.
Excise [1966: KAR. ACT 21 368
It is considered that public Transport vehicle belonging to the
Karnataka State Transport Undertaking shall not be confiscated when an
offence is reported under the provisions of the Karnataka Excise Act, 1965.
Therefore an amendment to section 43 is proposed.
Section 51 A is proposed to be substituted to empower the state
Government to prescribe the conditions and restrictions subject to which
accounts or records of every licencee shall be audited by a cost Accountant.
Hence the Bill.
[L.A.Bill No. 39 of 2007]
[Entry 51 of List II of the Seventh Schedule to the Constitution of India.]
XX
Amending Act 19 of 2010. - At present under Section 67 of the
Karnataka Excise Act, 1965, the State Government is empowered to exempt
or reduce either prospectively or retrospectively the excise dues payable
under Section 22 of any liquor sold to certain categories of institutions.
Of late, more number of consulates/diplomatic agents has started
functioning in the State H eadquarters. The offices of Consulates of
Germany, Japan, France, Britain, Switzerland, Ireland, Maldives, Finland,
and Spain are established in Bangalore. It is the privilege of the State
Government to extend benefit of exemption of tax on liquor to the diplomats
as a matter of honouring their dignity.
Therefore, it is proposed to amend Section 67(1)(i) of the Karnataka
Excise Act, 1965 with an enabling provision to extend the benefit of
exemption of tax on liquor to ‘diplomatic agents’.
Hence the Bill.
[L.A.Bill No. 41 of 2009, File No.DPAL 38 Shasana 2009]
[Entry 8 and 51 of List II of the Seventh Schedule to the Constitution
of India.]
XXI
Amending Act 26 of 2013. - The Karnataka State Beverages
Corporation was established for distributing liquor for sale in the State. As
the Government grants distributor licence to the Corporation and collects
privilege fee from the Corporation. In order to bring clarity in the
interpretation of the scheme of collection of privilege fee, it is proposed in
the Budget speech for the year 2013- 14 to amend section 24 of the
Karnataka Excise Act retrospectively to deem always the privilege fee
collected as part of State Government’s revenue.
Hence, the Bill.
[L.A. Bill No.14 of 2013, File No. Samvyashae 22 Shasana 2013]
[Entry 51 of List II of the Seventh Schedule to the Constitution of India.]
1966: KAR. ACT 21] Excise 369
XXII
Amending Act 11 of 2014.-It is considered necessary to amend the
Karnataka Excise Act, 1965 to facilitate payment of all Exicse Revenue like
License Fee, Excise Duty, Additional Excise Duty or any other form of fee by
way of electronic remittance.
Hence the Bill.
[L.A. Bill No.28 of 2014, File No. Samvyashae 54 Shasana 2013]
[Entry 51 of List II of the Seventh Schedule to the Constitution of India.]
XXIII
Amending Act 01 o f 2017. - In the Budget Speech 2015- 16, the
Hon’ble Chief Minister, proposed to bring amendment to the Excise Act to
permit members of Coconut Growers Federation to harvest ‘Neera’ in limited
quantities from the coconut trees and thereby increasing the inco me of the
coconut growers significantly. Further, Neera production is legally permitted
in the States like Kerala, Tamil Nadu, Maharashtra, Goa and Union
Territories of Lakshadweep and Andaman and Nicobar Islands.
Therefore, it is considered necessary to amend the Karnataka
Excise Act, 1965 to,-
(i) remove the term “unfermented juice” from the definition of
“Toddy” and to distinguish “Neera” from “Toddy”;
(ii) define the term “Neera”;
(iii) regulate tapping of Neera and manufacture of Neera products; and
(iv) provide punishment for violation of provisions of section 13A
and the rules made thereunder.
Hence, the Bill.
[L.A. Bill No.38 of 2016, File No. Samvyashae 53 Shasana 2016]
[entry 51 of List II of the Seventh Schedule to the Constitution of India]
* * *
Excise [1966: KAR. ACT 21 370
1[ KARNATAKA ]1 ACT 21 OF 1966
(First published in the 1[Karnataka]1 Gazette on the Eighteenth day of
August, 1966 )
THE 1[KARNATAKA]1 EXCISE ACT, 1965
(Received the assent of the President on the Third day of August,1966)
(As amended by 1 of 1970, 1 of 1971, 61 of 1976, 32 of 1982, 28 of 1987,
36 of 1987, 1 of 1994, 2 of 1994, 2 of 1995, 7 of 1997, 21 of 1998, 12 of
1999, 21 of 2000, 15 of 2001, 38 of 2003, 27 of 2004, 14 of 2005,
27 of 2007, 19 of 2010, 26 of 2013, 11 of 2014 and 01 of 2017.)
An Act to provide for a uniform excise law in the 1[State of
Karnataka]1.
WHEREAS it is expedient to provide for a uniform law relating to the
production, manufacture, possession, import, export, transport, purchase
and sale of liquor and intoxicating drugs and the levy of duties of excise
thereon, in the 4[State of Karnataka] 4 and for certain other matters
hereinafter appearing;
BE it enacted by the 1[Karnataka]1 State Legislature in the Sixteenth Year
of the Republic of India as follows:-
1. Adapted by the Karnataka Adapatations of Laws Order 1973 w.e.f. 1-11-1973.
CHAPTER I
PRELIMINARY
1. Short title, extent, commencement and application. - (1) This Act
may be called the 1[Karnataka]1 Excise Act, 1965.
1. Adapted by the Karnataka Adapatations of Laws Order 1973 w.e.f. 1-11-1973.
(2) It extends to the whole of the 1[State of Karnataka]1.
1. Adapted by the Karnataka Adapatations of Laws Order 1973 w.e.f. 1-11-1973.
(3) It shall come into force on such 1[date]1 as the State Government may
by notification, appoint.
1. Act came into force on 30-9-1967 by notification.
(4) All the provisions of this Act shall be applicable to the areas of the
State in which the 1[Karnataka]1 Prohibition Act, 1961 ( 1[Karnataka]1 Act 17
of 1962) is not in operation and shall apply to such extent as is specified in
the said Act in the areas in which the said Act, is in operation.
1. Adapted by the Karnataka Adapatations of Laws Order 1973 w.e.f. 1-11-1973.
2. Definitions.- In this Act, unless the context otherwise requires,-
(1) "beer" includes ale, stout and porter;
1966: KAR. ACT 21] Excise 371
(2) " to bottle" means to transfer liquor from a cask or other vessel to a
bottle, jar, flask 5[polythene sachet]5 or similar receptacle for the purpose of
sale, whether any process of manufacture be employed or not, and includes
re-bottling;
(3) "cultivation" includes the tending or protection of a plant during
growth and does not necessarily imply raising it from seed;
(4) "denatured" means subjected to a process prescribed for the purpose
of rendering unfit for human consumption;
2[(5) "Deputy Commissioner" means the Deputy Commissioner of the
revenue district;]2
3[(5A) 'Deputy Commissioner of Excise' means a Deputy Commissioner of
Excise appointed under section 4A;]3
(6) "excisable article" means,-
(a) any liquor;
(b) any intoxicating drug;
(c) opium; or
(d) other narcotic drugs, narcotics and non-narcotic drugs which the
State Government may by notification declare to be an excisable article;
(7) "Excise Commissioner" means the officer appointed as Excise
Commissioner under section 3;
(8) "excise duty" and "countervailing duty" means any such excise duty
or countervailing duty, as the case may be, as is mentioned in Entry 51 of
List II of the Seventh Schedule to the Constitution;
2[(9) 'Inspector of Excise' means an Inspector of Excise appointed under
section 6 ;]2
(10) "Excise Officer" means the Excise Commissioner, 6[a Joint
Commissioner of Excise] 6 a Deputy Commissioner, 3[a Deputy
Commissioner of Excise]3 or any officer or other person lawfully appointed or
invested with power under 2[section 5, section 5A or section 6]2;
(11) "excise revenue" means revenue derived or derivable from any
duty, fee, tax, rent, fine or confiscation imposed or ordered under the
provisions of this Act or any other law for the time being in force relating to
liquor or intoxicating drugs;
3[(11A) 'excise tree' includes the Gulmohwa, cocoanut, palm, palmyra, date,
bagani or doddasal tree, or any other tree, the fermented or unfermented
juice 7[x x x]7 from which toddy or any other liquor can be prepared;]3
Excise [1966: KAR. ACT 21 372
(12) "export" means to take out of the State otherwise than from a
Customs station as defined under section 2 of the Customs Act, 1962
(Central Act 52 of 1962);
2[(13) "foreign liquor" includes every liquor imported into India;]2
(14) " import" except in the phrase "import into India", means to bring into
the State otherwise than from a Customs station as defined under section 2
of the Customs Act, 1962 (Central Act 52 of 1962);
2[(15) 'Indian liquor' means liquor produced, manufactured or compounded
in India in the same manner as Gin, Brandy, Whisky or Rum imported into
India, and includes 'milk punch' and other liquor consisting of or containing
sprits;]
2
(16) "intoxicant" means any liquor as defined in clause (18) or any
intoxicating drug as defined in clause (17);
(17) "intoxicating drug" means,-
(i) the leaves, small stalk and flowering or fruiting tops of the Indian
hemp plant including all forms known as bhang, siddi or ganja;
(ii) charas, that is, the resin obtained from the Indian hemp plant,
which has not been submitted to any manipulations 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 manufactured drug as defined
under section 2 of the Dangerous Drugs Act, 1930 (Central Act 2 of 1930);
6[(17A) "Joint commissioner of Excise" means a Joint Commissioner of
Excise appointed under section 4A]6
(18) "liquor" includes,-
(a) spirits of wine, denatured spirits, wine, beer, toddy and all liquids
consisting of or containing alcohol 1[or wash]1; and
(b) any other intoxicating substance, which the State Government
may by notification, declare to be liquor for the purposes of this Act;
(19) "manufacture" includes every process whether natural or artificial, by
which any fermented, spirituous or intoxicating liquor or intoxicating drug is
produced or prepared and also redistillation and every process for the
rectification of liquor;
1[(19A) "material" includes mhowra flower, molasses, wash, rotten jaggery,
grapes, cashewnut fruits, and such other substances as the State
Government may by notification specify;
1966: KAR. ACT 21] Excise 373
(19B) "mhowra flower" means the flower of passialatifolla(ippe) but does
no include the berry or seed of the mhowra tree;
(19C) "molasses" means the heavy, dark coloured residual syrup drained
away in the final stage of the manufacture of jaggery or sugar containing in
solution or suspension, sugars which can be fermented, and includes any
product formed by the addition to such syrup of any ingredient which does
not substantially alter the character of such syrup; but does not include any
article which the State Government may by notification declare not to be
molasses, for the purposes of this Act;]1
(20) "notification" means a notification published in the official Gazette;
(21) "place" includes a house, building, shop, booth, tent, vessel, raft and
vehicle;
(22) "police station" includes any place which the State Government may,
by notification, declare to be a police station for the purpose of this Act;
(23) "prescribed" means prescribed by rules made under this Act;
(24) "rectification" includes every process whereby spirits are purified or
are coloured or flavoured by mixing any material therewith;
1[(24A) "rotten jaggery" means jaggery which is unfit for human consumption
or the consumption of which is injurious to health;
Explanation.-'jaggery' shall be deemed to be unfit for human
consumption or the consumption of it shall be deemed to be injurious to
health if it is of dark brown colour with strong smell or if on chemical analysis
it is found to contain more than fifteen percent of reducing sugar or less than
seventeen percent of total sugar;]
1
(25) "sale" or "selling" includes any transfer otherwise than by way of gift;
(26) "spirit" means any liquor containing alcohol and obtained by distillation,
whether it is denatured or not;
3[(26A) `Sub- Inspector of Exercise' means an officer appointed as Sub-
Inspector of Excise under section 6;]3
8[“(27) "Toddy" means fermented juice drawn from an excise tree but does
not include Neera."]8
9["(27-A) "Neera" means the juice drawn from a coconut tree and collected
in receptacles in any manner and not subjected to fermentation, which is
transparent, syrupy, sweet in smell and taste, without the slightest foam on
its surface and preserved without any acid."]
9
4[(28) xxx]4
(29) "transport" means to move from one place to another within the State
whether the intervening area lies wholly within the State or not.
Excise [1966: KAR. ACT 21 374
1[(30) "wash " includes fermented wort and a dilute solution of sugar from
which spirit is distilled.]1
1. Inserted by Act 1 of 1970 w.e.f. 23-12-1969.
2. Substituted by Act 1 of 1971 w.e.f. 7-8-1970.
3. Inserted by Act 1 of 1971 w.e.f. 7-8-1970.
4. Omitted by Act 1 of 1971 w.e.f.7-8-1970.
5. Inserted by Act 1 of 1994 w.e.f. 1-7-1993.
6. Inserted by Act 21 of 1998 w.e.f. 28-5-1998.
7. Omitted by Act 38 of 2003 w.e.f. 3.9.2003.
8. Substituted by Act 1 of 2017 w.e.f. 4-1-2017.
9. Inserted by Act 1 of 2017 w.e.f. 4-1-2017.
CHAPTER II
ESTABLISHMENT AND CONTROL
3. Appointment of Excise Commissioner.- (1) The State Government
may appoint, by notification, an officer not below the rank of a Deputy
Commissioner, as Excise Commissioner for the 1[State of Karnataka] 1, who
subject to the general or special orders of the State Government in this
behalf, shall be the chief controlling authority in all matters connected with
the administration of this Act.
1. Adapted by the Karnataka Adapatations of Laws Order 1973 w.e.f. 1-11-1973.
(2) The Excise Commissioner shall exercise all the powers of the Deputy
Commissioner in respect of the administration of this Act and shall have the
control of the administration of the Excise Department.
4. Deputy Commissioner.- (1) The Deputy Commissioner shall within
the limits of his jurisdiction exercise such powers and perform such duties
and functions as are assigned by or under the provisions of this Act to a
Deputy Commissioner subject to such control as the State Government may
from time to time direct.
(2) For the purposes of this Act, all Deputy Commissioners shall be
subordinate to the Excise Commissioner.
1[4A. 2[Joint Commissioner of Excise and Deputy Commissioner of
Excise]2.- (1) The State Government may appoint, by notification, as man y
2[Joint Commissioners of Excise or Deputy Commissioners of Excise] 2 as it
thinks fit, for such area or areas as may be specified in the notification.
I 1. Inserted by Act 1 of 1971 w.e.f. 7-8-1970.
2. Substituted by Act 21 of 1998 w.e.f.28-5-1998.
1966: KAR. ACT 21] Excise 375
(2) 1[A Joint Commissioner of Excise or a Deputy Commissioner of
Excise]1 appointed under sub- section (1), shall exercise such powers and
perform such duties and functions assigned to a Deputy Commissioner
under this Act, as may be specified by the State Government in the
notification, and thereupon the Deputy Commissioner shall not be
competent to exercise the powers or perform the duties and functions so
specified.
1. Substituted by Act 21 of 1998 w.e.f.28-5-1998.
(3) 1[A Joint Commissioner of Ex cise or a Deputy Commissioner of
Excise]1 shall be subordinate to the Excise Commissioner and shall be
subject to the control of the Excise Commissioner and the State
Government.]
1
1. Substituted by Act 21 of 1998 w.e.f.28-5-1998.
5. Appointment of 1[Superintendents of Excise and Deputy
Superintendents of Excise]1.- (1) The State Government may appoint an
officer as 1[ Superintendent of Excise] 1 for a district or part of a district to
exercise all or any of the powers and to perform all or any of the duties of a
Deputy Commissioner in respect of the administration of this Act, either
concurrently with or in subordination to the Deputy Commissioner subject to
such control as the State Government may direct.
1. Substituted by Act 1 of 1971 w.e.f. 7-8-1970.
(2) The State Government may appoint such number of 1[Deputy
Superintendents of Excise]1 for a district or part of a district as it thinks fit to
exercise such powers and perform such duties as the State Government
may direct.
1. Substituted by Act 1 of 1971 w.e.f. 7-8-1970.
1[5A. Constitution of an Intelligence Bureau and appointment of
Superintendents and Deputy Superintendents of Excise (Intelligence
Bureau).- (1) There shall be an Intelligence Bureau headed by the Excise
Commissioner and consisting of a
2[Joint Commissioner of Excise or a
Deputy Commissioner of Excise] 2 and such number of Superintendents of
Excise (Intelligence Bureau) and Deputy Superintendents of Excise
(Intelligence Bureau) as may be appointed by the State Government under
sub-section (2) and such other officers as may be appointed by the Excise
Commissioner with the prior approval of the State Government.
(2) The State Government may appoint,-
(i) an officer as Superintendent of Excise (Intelligence Bureau) for a
district or part of a district or for more than one district;
Excise [1966: KAR. ACT 21 376
(ii) an officer as Deputy Superintendent of Excise (Intelligence
Bureau) for a district or part of a district or for more than one
district,
to exercise the powers relating to detection, invest igation and trial of
offences under the Act, and to perform such duties and functions of an
Excise Officer as the Excise Commissioner may direct subject to such rules
as may be prescribed.]1
1. Inserted by Act 1 of 1971 w.e.f. 7-8-1970.
2. Substituted by Act 21 of 1998 w.e.f 28-5-1998.
6. Appointment of 1 [Inspectors of Excise, Sub- Inspectors of
Excise]1 and other subordinate officers. - (1) The State Government may
appoint 1[Inspectors of Excise and Sub - Inspectors of Excise] 1 to exercise
the power s and to perform the duties in connection with detection,
investigation and trail of offences under this Act.
1. Substituted by Act 1 of 1971 w.e.f. 7-8-1970.
(2) The State Government may appoint subordinate officers of such
classes and with such desi gnations, powers and duties under this Act as it
may think fit.
(3) The State Government may, by notification direct that all or any of the
powers and duties assigned to an 1[Inspector of Excise, Sub- Inspector of
Excise]1 or subordinate officer under sub -sections (1) and (2), shall be
exercised and performed by any officer of the State Government.
1. Substituted by Act 1 of 1971 w.e.f. 7-8-1970.
(4) The State Government may, by notification, delegate its powers
under sub-sections (1), (2) and (3) to the Excise Commissioner, 2[the Joint
Commissioner]2 the Deputy Commissioner 1[the Superintendent of Excise or
the Deputy Superintendent of Excise]1, as the case may be.
1. Substituted by Act 1 of 1970 wExcerpt shown. Open the full act in Lexace.