BRINDCO SALES PVT LTD v. GOVT OF NCT OF DELHI & ORS.

10. Ms. Brar, learned counsel invites the attention of this court to page 202 of the compilation which are the terms and conditions for grant of L-1 License for the year 2021-2022, particularly to para 7.1, to submit that the grant of L-1 license is subject to provisions of Rule 63 apart from other provisions only for a person who seeks such licence.

11. She submits that the rigors of Rule 63 cannot be made applicable to persons such as the applicant/petitioner who are no more the licensee for the policy which stood lapsed and therefore, the nonapplicant/respondent is not correct in referring to or applying the provisions of Rule 63 to the applicant/petitioner at all.

12. Relying on judgement in Anheuser Busch (Supra), Ms. Brar, learned counsel submits that the intent of Rule 56 is for disposal of leftover stock only and there is no dispute that the 5 unregistered brands are part of the left-over stock. Ms. Brar, learned counsel vehemently submits that the judgment in the case of Anheuser Busch (Supra) has neither been challenged nor set aside by any superior court, thereby attaining finality and thus would be binding upon the nonapplicant/respondent.

13. Ms. Brar, learned counsel also relies upon Para 4 of the order dated 13.12.2022 passed by this Court to submit that this court had unequivocally directed the non-applicant/respondent to implement the disposal of the left over stocks which were procured under licence pertaining to the year 2021-2022. No objection was taken by the nonapplicant/respondent to such directions at all.

14. In fact, Ms. Brar, learned counsel submits that this manner of depriving the applicant/petitioner from disposal of all left-over stocks under Rule 56, smacks of arbitrariness and are whimsical and devised later on to obstruct the implementation of the order dated 13.12.2022.

15. Referring to the order dated 20.01.2023, whereby the nonapplicant/respondent had withdrawn its Review Petition, Ms. Brar, learned counsel submits that the said action would fall within the doctrine of issue estoppel and the non-applicant/respondent is barred from resisting implementation of Rule 56 in respect of remaining 5 unregistered brands.

16. As an example of how the non-applicant/respondent had in the past permitted such disposal of old stock which are not registered on the date of such sanction, Ms. Brar, learned counsel referred to page 35 of the compilation to submit that the Competent Authority had sanctioned sale of old stocks. This, in contradistinction to the manner in which nonapplicant/respondent permits Transfer to another L-1 Licencee, Ms. Brar invites attention of this Court to page 25 of the said compilation whereby the Competent Authority approved the Transfer of registered brands from United Breweries Ltd (Punjab Unit) to United Breweries Limited Rajasthan. On that basis, Ms. Brar, learned counsel submits that Rule 56 envisions two situations, in that, one where Transfers of registered left over stock is sought and the other, where sale or disposal of unregistered left over stock is sought. Thus, Ms. Brar, learned counsel submits that presently, the situation as envisaged in the second category has arisen.

17. The next submission of Ms. Brar, learned counsel pertains to the refund of excess Excise Duty that the applicant/petitioner had deposited with the non-applicant/respondent to ease out the deadlock on the part of the non-applicant/respondent. Ms. Brar, learned counsel submits that according to the regime which was introduced for the Excise Policy of the year 2021-2022 is concerned, the policy was based on Licence Fee to which Excise Duty at the rate of 1% was added. Ms. Brar, learned counsel submits that the full License Fee alongwith the stipulated 1% duty was deposited with the non-applicant/respondent, which cannot be disputed by the non-applicant/respondent. However, the nonapplicant/respondent subsequently, charged Excise Duty upon the left over stock at the current rates and has not given set off of the duty paid earlier. She submits that applicant/petitioner cannot be asked to pay the Excise Duty twice over. On that basis, Ms. Brar, learned counsel submits that the applicant/petitioner is also entitled in law to the refund of the excess Excise Duty paid.

18. So far as the allegation of the non-applicant/respondent that in respect of these stocks the bar code are missing, Stock Keeping Unit (hereinafter referred to as “SKU”) is not generated etc, Ms. Brar, learned counsel submits that the applicant/petitioner requests that the same be treated in the same manner as unregistered brands and may be permitted to be disposed off in accordance with Rule 56 of the Rules, 2010.

19. Thus, Ms. Brar, learned counsel prays that the nonapplicant/respondent be directed to permit disposal of the left-over stock of the 5 unregistered brands in terms of the provisions of Rule 56 of the Rules, 2010 and the excess Excise Duty be refunded back to the applicant/petitioner.

20. Per contra, Mr. Sanjay Jain, learned Additional Solicitor General of India (hereinafter referred to as “ASG”) submits at the outset, that the entire premise of the arguments of the applicant/petitioner based on Rule 56 of the Rules, 2010, is on an erroneous interpretation and overlooking the interplay of Rule 56 with Rule 63 of the said Rules.

CONTENTIONS OF RESPONDENT/EXCISE DEPARTMENT

21. Learned ASG submits that the applicant/petitioner would urge that the Deputy Commissioner, Excise should treat all its unsold leftover stock for the licence period expiring on 31.08.2022 as unregistered and facilitate the applicant/petitioner to sell the same in as much as Rule 63 does not apply to the left-over stocks and Rule 56 is neutral to the registered/non-registered status of the brand.

22. Learned ASG submits that the humble endeavour of the nonapplicant/respondent is that the core argument, summarized above by the applicant/petitioner, is legally incorrect and not borne out from the Excise Rules and is contrary to the own acts of the applicant/petitioner.

23. Learned ASG further submits that Chapter IV of the Excise Rules bears the heading “Licensing of Liquor” and Rules 56 and 63 form part of this chapter.

24. He submits that the applicant/petitioner in the present case was granted by the Competent Authority (Deputy Commissioner), a licence meant for wholesale vending of Indian as well as Foreign Liquor (L-1F) for the licensing period 17.11.2021 to 31.08.2022.

25. Learned ASG submits that such licences are not auto renewable. He further submits that, to be able to continue in business, an entity, for the purposes of L-1, L-1F, L-2 and L-3 licences would need to apply for licence afresh and the grant or decline of the same would be in accordance with the procedure prescribed.

26. Learned ASG submits that the natural sequitur of the expiry of the licence was that the unsold left-over stock, as on 31.08.2022, could not be sold by the applicant/petitioner because the permission to sell is linked to the licence period and not to the licensee.

27. Learned ASG submits that Rule 63 of the Rules, 2010, provides that no sale of any brand of liquor is permitted within the territory of NCT of Delhi, unless the same is approved by the Deputy Commissioner. He further submits that this provision is without any exception and would apply to all sales including the sale of left-over unsold stocks as on the date of the expiry of the license.

28. Learned ASG relies on Para 8 of his written synopsis which states that Rule 56 which deals with the procedure for left-over stock, clearly provides that the left-over stocks can be sold only to the existing licensees. He further submits that if only the existing licensees can be the purchasers of the left-over stocks, it is inevitable that they need to be registered in respect of the brand(s), which is/are sought to be sold from the pool of the left-over stocks.

29. Learned ASG, while emphasizing upon the purport of the Rule 56, further submits that, the left over stocks of the expired licence period will have to be registered as brands in the period that concurs with the period of licence of the existing licensees because unless the brand ought to be sold are registered as brands by the existing licensees, who are interested in purchasing the same, they cannot purchase the same and in the absence of an eligible purchaser, the Deputy Commissioner will not able to facilitate the erstwhile licensee, who has applied under Rule 56, to sell its left over stock.

30. Learned ASG submits that it cannot be a valid argument that Rule 56 is meant to deal with unregistered brands (partially or fully). He further submits that similarly, it cannot be a valid argument, in view of the above, to contend that the left-over stocks can be sold de hors Rule 63 or Rule 152. He submits that the regime of Rule 56 is to be pressed into service only in exceptional circumstances and not as a norm.

31. Learned ASG submits that the sale of the liquor under the Excise Rules is regulated by Excise Supply Chain Information Management Systems (hereinafter referred to as “ESCIMS”) Portal, wherein each distinct brand has to be allocated distinct Global Trade Item Number (hereinafter referred to as “GTIN”) and SKU numbers, which can be generated only upon the registration of brands and unless the same are generated, no sales can be effected by the erstwhile licensee or on behalf of the erstwhile licensee for the reason that no existing licensee can correspondingly purchase any liquor unless the same is codified with distinct GTIN and SKU numbers for the relevant licence period.

32. Learned ASG submits that once distinct SKU and GTIN Numbers are specifically assigned to each distinct product, for a particular licence period, the licence holders would be able to do all transactions permitted to them under their license on the ESCIMS Portal. He further submits that if a particular brand/ sub-brand is not registered, the same will not be recognized by ESCIMS Portal to facilitate the sale of leftover stock for the simple reason that no SKUs and GTINs can begenerated for such non-registered brand / sub-brand and as a result, no existing licensee would be able to purchase the same.

33. Learned ASG submits that when the Applicant/petitioner applied for the license for the period 01.09.2022 onwards, in the brand declaration form, it opted to propose the registration of some of the brands which formed part of the leftover stocks, opting at the same time not to propose registration of some other brands, which are now sought to be sold as unregistered brands claiming that the same can be done, de hors, the specific provisions to the contrary contained in Rule 56 and 63 of the Rules, 2010. He further submits that the aforesaid action on the part of the Applicant/petitioner also showed that it knew the importance of brand registration and it took a commercial call of not causing certain brands to be registered, though the same formed part of the pool of leftover stock and towards the registration of which, there was no prohibition.

34. To conclude, learned ASG submitted that the architecture of the Excise Policy as contained in Excise Rules, 2010 does not permit sale of liquor, by whichever name called, whether disposal or transfer or any other expression, the brand of which is not registered. The same is prohibited in Rule 63 of the Excise Rules, 2010. He further submits that the Rule 63 is not restricted in its application and is all pervasive and is the only source of power and regulation as regards the sale of liquor in the Territory of Delhi and the same applies without any fetters to a sale, which may be permitted under Rule 56.

35. Learned ASG further argues on the point that whether the Deputy Commissioner has discretion under Rule 56 of the Rules, 2010 can be ascertained from the intent and purport of the legislature under Rule 56. He submits that Rule 56 cannot be construed to mean that the Deputy Commissioner does not have any discretion with respect to the procedure to be adopted for sale of left-over stock. He submits that Rule 56 is not merely about timeline as is sought to be urged by the applicant/petitioner, it also incorporates a mechanism for disposal of left over stock, in terms of other applicable Rules and it will be a misreading of the Rule 56, if the same is read as only a procedure to dispose of the left overstock.

36. He further submits that the Rules have to be read collectively, harmoniously and conjunctively, in that, the moment, the Deputy Commissioner is required under Rule 56 to facilitate the disposal of leftover stock, the Deputy Commissioner is bound to use his such powers and discretion, as would be obtained from other provisions of the Rules as well, such as Rule 63 and Rule 152.

37. Learned ASG submits that one must not lose sight of the fact that the Deputy Commissioner derives his administrative power under Section 7 of the Excise Act, 2009 and that such powers cannot be annihilated by any delegated legislation, such as Rule 56. Section 7 of the Delhi Excise Act, 2009, is extracted hereunder:- “7.Excise administration.- (1) The Deputy Commissioner shall be the licensing authority who shall exercise all powers and functions under this Act, subject to the control and supervision of the Excise Commissioner. (2) 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 subject to such control as the Government may from time to time direct. (3) The Assistant Commissioner and other subordinate officers shall assist the Deputy Commissioner in exercising his functions.”

38. Learned ASG submits that the reliance on order dated 08.07.2014 is misplaced and misconceived. He submits that it was not pointed out by the Applicant/petitioner, in as much as it ought to have been pointed out that the said document, which was only an order for disposal of leftover stock, (and not a Rule or a Policy document) was passed under the Delhi Liquor License Rules, 1976 which are no more applicable.

39. Learned ASG on that basis relies on Para 8 of the judgment of this Court in Sunita Goel Vs GNCT of Delhi and Ors, reported in 2015 SCC OnLine Del 9353, to submit that The Delhi Liquor License Rules 1976 stand repealed, which has also been observed by this Court in that case and the licensees are now governed by the Delhi Excise Rules,

2010.

40. Learned ASG submits that a bare perusal of the subsequently issued Order dated 11.07.2014 indicates that there is no requirement of keeping record of any discontinued brand as under the new Rules the sale/disposal of unregistered brands is not permissible in any manner.

41. Learned ASG submits that there can be no claim of legitimate expectation in case of change in policy as expatiated by the Supreme Court in Madras City Wine Merchants’ Association Vs State of Tamil Nadu, reported in (1994) 5 SCC 509. The para 48 of the judgement is extracted hereunder:- “48. …………………………………. From the above it is clear that legitimate expectation may arise- (a) if there is an express promise given by a public authority; or (b) because of the existence of a regular practice which the claimant can reasonably expect to continue;

(c) Such an expectation must be reasonable.

However, if there is a change in policy or in public interest the position is altered by a Rule or legislation, no question of legitimate expectation would arise.”

42. Thus, Learned ASG submits that if an act is not provided under the statutory regime, the same cannot be urged as an obligation of the statutory authority. He further urges that it is a time-tested legal proposition that if an act ought to be done in a particular manner, it has to be done in that manner alone and in no other manner, as was held by Privy Council in Nazeer Ahmed Vs. King Emperor, reported in AIR 1936 PC 253.

43. Learned ASG in furtherance of above cited propositions submits that if the mechanism of sale is provided under Rule 63, any sale of any stock, which can be purchased by the current license holder only under the current policy, has to be effected in the mechanism provided under Rule 63 only and in no other manner. He further submits that no legitimate expectation could have been harboured by the Applicant/petitioner for selling such stock, which it chose not to get registered as a brand or which the current license holders did not choose to get registered for their extant licenses.

44. Further, the Learned ASG makes his submissions on noninclusion of the duty paid in license-fee based regime in the duty calculated towards the sale of Left-over stock. He further submits that it is important to highlight the core difference between the two regimes, i.e., License Fee Regime and Excise Duty Based Regime. The distinction between the two regimes has been extracted as a table hereunder:- Sl. No. License Fee Regime Excise Duty Based Regime

1. L[1] Licensee were allowed to register multiple brands for different manufacturers. Wholesalers/L[1] Licensees can register and sell only their own brands.

2. L[1] License was not granted to manufacturers and bottlers. L[1] License is granted only to manufactures/bottlers.

3. Excise duty was paid by L7Z licensees. Excise duty is paid by L[1] licensees.

45. Learned ASG further submits that there is no provision in the entire architecture of the Excise Policy as obtainable from the Excise Act and the Excise Rules by virtue of which the nonapplicant/respondent can adjust a Duty paid by the applicant/petitioner under an Excise Regime, which has been discontinued and substituted by a New Regime, against the Duty to be paid by the Applicant/petitioner under the New Regime. He further submits that since there is no provision in the Act or the Rules, the nonapplicant/respondent, in a matter of Revenue, cannot grant any credit as is claimed by the Applicant/petitioner.

46. Learned ASG submits that the component of 1 % Duty under the erstwhile license fee-based regime, was an integral part of the overall scheme, under which the excisability was assessed by way of a fee to be charged for the grant of licence itself. The said regime is subject matter of multiple litigations under various fora. He further submits that the non-applicant/respondents are not in a position to comment upon the nature of 1 % levy which was intricately linked with the licence fee. Therefore, on that basis he submits that when the character of the levy itself is not clear, there is no question of adjusting the same against the Excise Duty of 300%, as applicable in the current regime.

47. The learned ASG thus submits that the present petition has worked itself out since the reliefs to the extent which could be granted have already been granted by this Court and the execution thereof has already been carried out by the parties, leaving no other issue to be decided in the present petition and is thus, liable to be dismissed.

REBUTTAL OF APPLICANT/PETITIONER

48. In rebuttal Ms. Brar, learned counsel contends that so far as the issue of setting off the 1% Excise Duty deposited by the applicant/petitioner, the department cannot be heard to contend that there is no rule or a policy of set off and thereby also simultaneously submits that the Excise Regime during the year 2021-2022, does not contain any provision for refund of any such excess payment.:

49. Ms. Brar, learned counsel submits that to the extent of whatever amount was already paid on account of Excise Duty in respect of the brand for which the applicant /petitioner seeks application of the Rule 56 of the Rules, 2010, government cannot unjustly enrich itself. In respect of the submission of the learned ASG in regard to the distinction sought to be brought between registered and unregistered brands are concerned, Ms. Brar, learned counsel submits that there is no provision either in the Act, the Rules, 2010 or any regulations/circulars of the nonapplicant/respondent which draw any such distinction. Thus, the said submissions are contrary to the provisions of the Delhi Excise Act, 2009 as well as Rules, 2010 and therefore cannot be countenanced.

50. Moreover, Ms. Brar, learned counsel submits that from the year 2009 till 2019 the provision of Rule 56 of the Rules have been applied across board for all left over stocks, registered or unregistered. On that basis, Ms. Brar, learned counsel vehemently opposes the distinction sought to be drawn between registered and unregistered brands.

51. Ms. Brar, learned counsel reiterates and reaffirms her submissions made earlier.

52. This Court has considered the submissions made across the bar and also considered the provisions of Delhi Excise Act, 2009 as also the Delhi Excise Rules, 2010.

ANALYSIS AND CONCLUSIONS

53. At the outset, and on the basis of the submissions urged on behalf of the parties, it appears to be relevant to extract the provisions of Rule 56, 63 and 152 of the Delhi Excise Rules, 2010 which are as under:- Rule 56 “56. Procedure dealing with left over stock.- If any person, who has held a licence under these Rules, has in his possession, on the expiry, or determination of his licence, any intoxicant, he shall take action for its disposal in the following manner:— (a) he shall submit to the Deputy Commissioner the list of such intoxicants within fifteen days from the expiry of the licence indicating therein the sale price of each brand. The Deputy Commissioner may allow him time, not exceeding 15 days for the disposal of such stocks to the existing licensees: Provided that if duty has not been paid on such stocks and the purchaser does not hold a licence permitting him to possess them in bond, the duty on such stocks at the rates in force on the date of sale shall be recovered from the purchaser before the possession thereof is taken; (b) in case the licensee is unable to dispose of such stocks, in part or in full, within the stipulated time, he shall immediately surrender the same to the Deputy Commissioner along-with a list mentioning the quantity and brand of undisposed stock on the following day. It shall be open to the licensee to reduce subsequently the sale price earlier intimated by him. If no sale price is intimated to the Deputy Commissioner at the time of surrendering the stocks, it shall be lawful for the Deputy Commissioner to dispose of such stocks to the existing licensees on a price determined by him;

(c) the Deputy Commissioner shall arrange to dispose of the surrendered stock at the price intimated by the outgoing licensee or determined by him. Whenever such price is reduced by the out-going licensee, the Deputy Commissioner shall dispose of the remaining stocks at such reduced price, as may be intimated to him by the former licensee from time to time or as determined by him. In case the stocks remain unsold for a period of two months from the date of the determination of the licence, it shall be lawful for the Deputy Commissioner to destroy the stocks, after obtaining the approval of the Excise Commissioner. No compensation shall be payable for such destruction to the outgoing licensee. No refund of duty, if paid, shall be allowed on stocks of liquor which ultimately remained unsold and are destroyed: Provided that if duty has not been paid on such stock, the Deputy Commissioner shall not order its destruction but may require in writing any person holding a licence to acquire the stock, or any part thereof, by purchase from the former licensee within six weeks of service of the requisition after payment of duty at the rates in force on the date of the requisition, at such price as may have been indicated by the former licensee or such price as the Excise Commissioner may fix after hearing the parties;

(d) in case the out-going licensee fails to surrender the stock of liquor as provided in clause (b) to the Deputy Commissioner it shall be lawful for the Deputy Commissioner to destroy the same” Rule 63

54. Upon a consideration of the aforesaid provisions, it is clear that Rule 56 is applicable only to the left-over stock of a person whose license had expired or determined and such person is in possession or custody of left over stocks having not been sold for any reason whatsoever during the subsistence of the license. So far as Rule 63 is concerned, it refers to sale of approved brands approved by the Deputy Commissioner through a valid license holder alone. The same does not appear to have any relation or nexus with Rule 56. Coming to Rule 152, it is clear that the same is a charging section for the purpose of Excise Duty to be charged on all excisable articles on ad valorem basis on the wholesale price. As per the regime during which the applicant /petitioner had a valid licence, Rule 152 indicates a duty at the rate of 1% chargeable on the Wholesale Price. On a plain reading of Rule 152, Rule 152

it is manifest that the same is only a chargeable provision and nothing more. It is obvious that the same would be applicable to a person who is a licence holder during such regime.

55. Admittedly, the applicant/petitioner was a valid licence holder during the Excise Policy pertaining to the year 2021-2022. It is also undisputed that the Excise Duty at the rate of 1% was deposited by the applicant/petitioner. It is also admitted that the left over stocks in possession of the applicant/petitioner are pertaining to the previous regime, i.e., 2021-2022.

56. The submission made by the learned ASG in respect of the distinction sought to be drawn between registered and unregistered brand is concerned, the same does not find any support from either any of the aforesaid provisions, or the provisions of Delhi Excise Act, 2009. The non-applicant/respondent has not placed any material on record to show that the excise department itself draws any distinction between registered and unregistered brands, much less has the department produced any material to show that there is in fact any difference in treatment between registered and unregistered brand. Thus, the entire argument is without any basis and liable to be rejected.

57. Yet another submission of learned ASG which was in respect of the Excise Rules, 2010 being regulated by ESCIMS Portal where each distinct brand has to be allocated a distinct GTIN and SKU numbers which can be generated only upon the registration of brands and that unless the same are generated, no sales can be effected by the erstwhile licensee on the basis that no existing licensee can correspondingly purchase any liquor, unless the same are codified with distinct GTIN and SKU numbers for the relevant license period. The said submission is without any basis for the reason that when it comes to left-over stocks which are to be disposed of in accordance with Rule 56, the same do not follow the normal procedure of Rule 63 made applicable to it. Moreover, this argument itself also has no legs to stand for the reason that the provisions of Rule 56 do not reflect any such requirement. On a holistic reading of Rule 56, it is clear that it is an enabling provision designed to ensure that a person who is in possession of left-over stocks upon which appropriate excise duty has already been levied, does not suffer losses for the reason that such left over stock has not been sold during the valid license period. It is only to ensure that the left over stock does not get either wasted or find its way through unregulated channels, that the provision for valid and legal disposal of the said stock is regulated under Rule 56.

58. Even according to the department, the Rule 56 clearly provides that the left-over stock can be sold only to the existing licensees and the said license holders are eligible to purchase left-over stock pertaining to an expired licence period which is permitted to be sold by the Deputy Commissioner under that rule. In other words, applying the said analogy to the said case, undoubtedly the applicant /petitioner being the erstwhile license holder, can only dispose of his left over stocks to the existing license holder who has brands registered in its name in respect of those goods which form part of the said left-over stocks. Thus, there is no bar or prohibition restricting the applicant /petitioner from disposing of left-over stock through Rule 56. As a matter of fact, the applicant/petitioner has been continuously and regularly conducting its business in similar fashion, admittedly for the past many decades. Apparently, this sort of objections has never been raised, nor brought to the notice of this court by the non-applicant/respondent. All the aforesaid arguments are without any documentary proof or statutory provisions.

59. It is also pertinent to clarify one issue, particularly in respect of ESCIMS Portal. The dependence of the department on the ESCIMS Portal for denying the applicant/petitioner the benefit of Rule 56 is absolutely unfair and unjust. This is for the reason that the said portal is only for the purpose of regulation and ease of business and cannot become a hurdle for implementation of any provision of the Act or the Rules which govern the Excise Policy. It cannot be countenanced that merely because the ESCIMS Portal does not access a particular left over stock for the reason that it does not have the readable GTIN, SKU or any other barcode, cannot be a foundation for defeating the enabling provisions like Rule 56. It would be contrary to and violative of the very spirit of Rule 56 that an erstwhile licensee is deprived from the benefit of disposal of left-over stock under Rule 56 on the ground that a software developed on the instructions of the department for regulating as well as for ease of business becomes an obstacle for implementing the provisions of law.

60. Another argument which was urged by the learned ASG was that Rule 56 cannot be read in isolation and has to be necessarily read in conjunction with Rule 63 and Rule 152 of the Excise Rules. In other words, learned ASG submitted that having regard to the fact that the applicant / petitioner is no more a valid license holder, the disposal of left-over stocks by virtue of Rule 56 would necessarily entail application of the Rule 63. The said argument had to be rejected for the reason that Rule 63 would be applicable only to the brands which are sought to be sold by an existing licensee holder and not an erstwhile licence holder who seeks mere disposal of old stocks. To make it clear, it could only be a person to whom the old stocks are disposed of by virtue of Rule 56 and who further would supply such goods in the market, possibly, Rule 63 may become applicable. Certainly, Rule 63 cannot be made applicable to the applicant/petitioner.

61. On the overall conspectus of the aforesaid analysis, it is clear that respondent cannot deprive the applicant/petitioner from seeking disposal of the left-over stocks under Rule 56 and the department in fact is obliged in law to grant all benefits arising out Rule 56.

62. Insofar as the issue of set off or refund of the Excise Duty at the rate of 1% having been deposited by the applicant/petitioner insofar as the proportionate duty in respect of the left-over stocks are concerned, merely because there is no refund policy in the erstwhile excise regime for the year 2021-2022, the same cannot be a reason for the nonapplicant/respondent to unjustly enrich itself to amounts which are not leviable.

63. In the aforesaid context, it was held in the judgement of the Division Bench of Punjab & Haryana High Court titled as Sharma and Company v. Union Territory, reported in 1988 SCC OnLine P&H 396, in Para 4 as under:- “4.The licenses are granted for one year, starting from 1st April, until 31st March of the following year. We have decided two cases, one of the Supreme Court and the other of the Division Bench of this Court. They are reported in State of Bombay v. S.S. Miranda Limited, and BhajanLal Saran Singh and Company v. The State of Punjab. The facts in S.S. Miranda's case (supra) were that during the currency of the license, which was from April to March, on 16th December, 1948 a notification was issued, whereby the duty on foreign liquor was doubled and thereupon the licensee was called upon to pay the additional duty upon the liquor which was still lying in its godowns un-sold, although it was purchased by the licensee long before after paying the excise duty payable at the time of initial purchase. After referring to various provisions of the Bombay Act, the decision of the Bombay High Court was upheld that the licensee was not liable to pay the additional duty. The aforesaid decision was relied upon by a Division Bench of this Court in Bhajan Lal Saran Singh's case (supra). The following passage deserves to be reproduced: “……In State of Bombay v. S.S. Miranda Limited Mazagoan it was held that once an excise duty has been paid, in respect of certain goods, an additional amount as excise duty would not be recoverable in respect of the same goods merely on the ground that the rate of duty has subsequently been enhanced. Their Lordships observed that they could not see an excisable article which had been subjected to duty one would be liable to further duty nor to the difference in case of increase in the rate. Applying the same principles to the instant case it appears that once excise duty known as still-head duty had been levied in respect of the stock lifted by the wholesaler from the bonded warehouse or from the manufacturer of the liquor as the case may be the relationship of the said duty with the manufacture, or production of the liquor had come to an end, and in that event, it would be for the wholesaler to recoup himself to the extent of the excise duty paid by him by including the same in the price to be charged by him, but the said item would lose the character of an excise duty and would cease to be leviable as such by the State.” The aforesaid quotation clearly goes to show that once the excisable article is subjected to duty, the item would lose the character of being subjected to fresh or additional duty and the aforesaid reasoning applies to the case in hand.” It is also recently held by the Coordinate Bench of this Court in Gwalior Alcobrew (P) Ltd. v. State (NCT of Delhi), reported in 2023 SCC OnLine Del 166:- “16.The Excise Department itself concedes that there is no provision in the Act or Rule dealing with such refunds. Under such circumstances, this Court directs the Respondents to refund the excise duty and import fee which has been deposited by the Petitioner. The said refund shall be made within a period of 4 weeks from today.

17. On the aspect of the interest, ld. Counsel for the Petitioner relies upon the judgment of the Supreme Court in Godavari Sugar Mills Ltd. v. State of Maharashtra (2011) 2 SCR 180 to contend that where there is no statutory provision dealing with interest, the Court can award interest on equitable ground. The relevant portion of the said judgment reads as under:

10. The question as to when and what circumstances, interest could be awarded on belated payment of compensation was considered by this Court in Union of India v. Parmal Singh (2009) 1 SCC 618. This Court first referred to the general principle and then the exceptions thereto, as under: When a property is acquired, and law provides for payment of compensation to be determined in the manner specified, ordinarily compensation shall have to be paid at the time of taking possession in pursuance of acquisition. By applying equitable principles, the courts have always awarded interest on the delayed payment of compensation in regard to acquisition of any property…. The said general principle will not apply in two circumstances. One is where a statute specifies or regulates the interest. In that event, interest will be payable only in terms of the provisions of the statute. The second is where a statute or contract dealing with the acquisition specifically bars or prohibits payment of interest on the compensation amount. In that event, interest will not be awarded. Where the statute is silent about interest, and there is no express bar about payment of interest, any delay in paying compensation or enhanced compensation for acquisition would require award of interest at reasonable rates on equitable grounds.”

64. It is clear from the ratio laid down by the aforesaid judgment as also the aforesaid analysis, that the non-applicant/respondent cannot retain any excess Excise Duty paid by the applicant/petitioner and correspondingly unjustly enrich itself.

65. Accordingly, the applicant/petitioner may submit its representation to the respondent/department which would consider the issue of refund of any excess amount of excise duty levied in respect of the left-over stocks. The said representation be disposed of by the respondent/department within six weeks from the date of such representation.

66. So far as the aspect of left-over stock is concerned, the nonapplicant/respondent is directed to apply Rule 56 of the Delhi Excise Rules 2010 on all fours to such left over stocks and permit the applicant/petitioner to clear/dispose off the same within 2 weeks from the date of the receipt of this order.

67. The application is disposed of in view of the aforesaid directions, with no order as to costs. W.P.(C) 15775/2022

68. List on 15.05.2023, the date already fixed.

TUSHAR RAO GEDELA, J. MAY 02, 2023