Full Text
HIGH COURT OF DELHI
Date of Decision: 7th December, 2022
51787/2022 ANHEUSER BUSCH INBEV INDIA LTD. ..... Petitioner
Through: Mr. Anupam Lal Das (Sr. Advocate), Anokul Raj, Mr. Anubhav Deep
Singh and Mr. Nikita Raj, Advocates (M-8882155426)
Through: Mr. Santosh K. Tripathi, ASC with Mr. Arun Panwar, Ms. Mahak Rankawat and Ms. Pradyuman, Advocate for GNCTD.
Ms. Pragya Bansaiyan, Advocate for Mr. Gautam Narayan, ASC.
Mr. Sameer Rohatgi, Mr. Kartikey Singh, Advocates for R-4
(M-9999259624)
JUDGMENT
(57) AND + W.P.(C) 16491/2022, CM APPL. 51810/2022 & CM APPL. 51811/2022 ANHEUSER BUSCH INBEV INDIA LTD...... Petitioner Through: Mr. Anupam Lal Das, Sr. Advocate with Mr. Anokul Raj, Mr. Anubhav Deep Singh and Mr. Nikita Raj, Advocates (M-8882155426)
VERSUS
OF NCT OF DELHI & ORS...... Respondent Through: Mr. Santosh K. Tripathi, ASC with Mr. Arun Panwar, Ms. Mahak Rankawat and Ms. Pradyuman, Advocate for GNCTD. CORAM: JUSTICE PRATHIBA M. SINGH Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
2. The present two writ petitions have been filed by the Petitioner - ANHEUSER BUSCH INBEV INDIA LTD., the manufacturer of Beer under the following trademarks/brands.
3. It is the case of the Petitioner that it has been constrained to approach this Court owing to certain issues that have arisen in respect of the left-over stock of its distributor M/s. Indo Spirit.
4. The GNCTD has introduced a new excise policy w.e.f. 1st September,
2022. The said policy replaces the earlier policy which was introduced on 17th November, 2021. The primary difference as submitted by ld. Counsel for the Petitioner between the earlier and the current policy is that under the earlier policy, distributors, agents etc. could obtain licenses under the Delhi Excise Rules and sell liquor in Delhi by paying license fee. However, under the current regime licenses are granted only to the manufacturers i.e., distillers, breweries, bottling plants and other similarly situated entities. The said difference is highlighted by reference to clause 3.[1] of the new Excise Policy, which prescribes the eligibility conditions. “3. ELIGIBILITY TO HOLD LICENCE: 3.[1] L-1 licence shall be granted only to a company incorporated under the Companies Act, 1956, or 2013, a firm registered under the Partnership Act, 1932, or a Society registered under the relevant Cooperative Societies Act or sole proprietor or a firm registered under Limited Partnership Liability Act, 2008, having licenced manufacturing units (distillery/ brewery/ Winery/bottling plant or so) 3.[2] Apart from the affidavits filed by an applicant for L-1 licence regarding sale figures, the applicant for the L-1 licence shall have to furnish along with the application a certificate from the excise authorities of the concerned State countersigned by an officer not below the Excise Officer as regards the sale figures and Ex Distillery Price (ED). The applicant will also be required to furnish attested photocopies of the export pass/export verification certificate (EVC) issued by the Excise authorities as a further proof of the sale figures. The manufacturing unit and attorney/authorized signatory both will be held liable for providing any wrong information in this regard. 3.[3] Each Licencee (distillery/Brewery/Winery /Bottling Plant etc.) shall have to maintain a separate godown. The Licencee shall be responsible for any act of omission or commission done by the company or by the person appointed by the company as authorized representative/ executive manager / agent or attorney for carrying out day to day business affairs. The person so appointed once shall not be changed during the currency of the licence without the prior intimation to the Deputy Commissioner Excise, Govt. of NCT of Delhi (hereinafter called "the Deputy Commissioner").
5. The case of the Petitioner is that the earlier license holder i.e. M/s. Indo Spirit had a license for the complete year, which would end on 31st March,
2023. However, due to the new policy, which was introduced on 1st September, 2022, the earlier license automatically lapsed.
6. On 31st August, 2022, M/s. Indo Spirit thus, made a representation to the Department of Excise, GNCTD giving details of its existing stock so that it may be permitted to dispose of the same. The said permission was not granted on the ground that a decision was not taken in respect of the left-over stock. Thereafter, M/s. Indo Spirit filed the writ petition being W.P.(C) 15529/2022, which was disposed of with the following observations. “W.P.(C) 15529/2022 and CM APPL. 48306/2022 (Interim Relief)
1. This writ petition has been preferred seeking the following reliefs:- “(a) Issue a writ of mandamus or any other similar writ, order or direction commanding the Respondents to allow the Petitioner to sell and transfer the existing stock (including inbound stock) lying with Petitioner or part thereof on the payment of the requisite duty by the manufacturers of the said stock, to any or all of the four corporations, being The Delhi State Industrial and Infrastructure Development Corporation (DSIIDC), Delhi Tourism and Transportation Development Corporation (DTTDC), Delhi Consumer’s Cooperative Wholesale Store (DCCWS), and Delhi State Civil Supplies Corporation Limited (DSCSC) who are presently running the liquor retail vends in the NCT of Delhi under Rule 56 of the Delhi Excise Rules, 2010; Or, in the alternative, Issue a writ of mandamus or any other similar writ, order or direction commanding the Respondents to allow the Petitioner to transfer the existing stock (including inbound stock) to the manufacturers/importers of the stock lying at the warehouses, who have already received their L[1], L- 1F licenses under the Delhi Excise Policy 2022-23, namely (i) Anheuser- Busch InBev India Limited (ii) B[9] Beverages Pvt Ltd (iii) Fratelli Wines Pvt Ltd, (iv) Blue Ocean Beverages Pvt Ltd and subsequently to the other manufacturers also as and when they will get their L[1], L-1F licenses, who shall be able to sell the said stock to the retail shops on the payment of the requisite duty as per Rule 56 of the Delhi Excise Rules, 2010; (b) Issue a writ of mandamus or any other similar writ, order or direction commanding the Respondents to allow the Petitioner to transfer the entire stock from the two existing warehouses located at E32, Okhla Phase-II, New Delhi and B-79, Okhla Phase-I, New Delhi to an alternative warehouse and for this purpose, issue a further writ of mandamus or any other similar writ, order or direction commanding the Respondents to grant necessary and timely permission, in accordance with law, for the proposed warehouses, wherein the entire stocks from the aforesaid two warehouses shall be transferred;”
2. The grievance of the petitioner essentially is that upon the expiry of the excise license which was held by it, it was left with unsold stock which could not to be disposed of till that date. The submission of Mr. Rohatgi, learned counsel appearing for the petitioner, was that although the Deputy Commissioner has been duly moved by way of representations, no action has been taken thereon. It was additionally submitted that the petitioner is presently saddled with huge costs towards rent in respect of storage of the liquor stock in a bonded warehouse and it has made a representation for being permitted to shift the same to another bonded warehouse where the rental liability would be lesser.
3. Bearing in mind the aforesaid issues which stand raised, the Court is of the considered opinion that the ends of justice would warrant the Deputy Commissioner being called upon to dispose of the pending representations with expedition and preferably within a period of three weeks from today. All contentions of respective parties on merit are kept open.
4. The writ petition shall stand disposed of.”
7. As per the above order, the Deputy Commissioner was to take a decision on the representation of M/s. Indo Spirit within three weeks.
8. In the meantime, in the present writ petition was filed before this Court by the manufacturer i.e., the Petitioner claimed that it has a license under the new regime, and it should be permitted to dispose of the left-over stock of its distributor M/s. Indo Spirit. The said writ petition was considered on 30th November, 2022 by this Court and the following order was passed. “CM APPL. 51811/2022 (for interim relief) in W.P.(C)-16491/2022
3. The Petitioner has filed the present petition seeking permission to unload the stock in question at the bonded warehouse of the Petitioner and for the sale of the same.
4. The case of the Petitioner is that with effect from 1st September, 2022 there was a new excise policy announced by the Respondent No.1 - GNCTD by which the eligibility to hold the license is now only with the manufacturing unit as per Clause 3.1. It is submitted that the Petitioner is constrained to file the present petition since the Respondents have refused to allow the Petitioner to unload stock amounting to 14,400 cases of imported Beer at the warehouses of M/s Indospirit Private Limited. Due to this, the consignment of Petitioner has been lying in trucks which are parked outside the bonded warehouse of M/s Indospirits, situated at Okhla.
5. Mr. Tripathi, ld. counsel for the GNCTD submits that a writ petition being W.P.(C) 15529/2022 titled M/s Indospirit Private Limited v. Commissioner of Excise Government of National Capital Territory of Delhi & Ors. was filed by M/s Indospirit Private Limited which has been disposed of by this Court vide order dated 14th November, 2022. Mr. Tripathi, ld. Counsel submits that the Respondent does not recognise the manufacturer under the policy regime. The relevant part of the order dated 14th November, 2022 is as follows: ………..
6. As per the said order, the representation of M/s Indospirit Private Limited is pending and is to be decided within three weeks, which period expires on 5th December, 2022. By the said date, the GNCTD would be taking a decision on the said representation in compliance with the order passed by this Court.
7. The Court has perused the order dated 14th November, 2022 passed in W.P.(C) 15529/2022. It is not in dispute that M/s Indospirit Private Limited was a license holder and has made a representation for disposal of the leftover stock. The short question is as to how the left over stock from the earlier excise regime is to be dealt with.
8. While the said issue is pending adjudication, this court is of the opinion that the trucks/lorries consisting of the leftover stock ought not to be permitted to be parked on the streets outside the bonded warehouse of M/s Indospirit Private Limited in Okhla. Accordingly, subject to the Petitioner furnishing all the details as required by the Excise Department and a No Objection Certificate from M/s Indospirit Private Limited, the 14,400 cases of beer are permitted to be offloaded and stored in the warehouses of M/s Indospirit Private Limited.
9. For the said purpose, the inspection by the Excise Department shall take place on 2nd December, 2022 and 3rd December, 2022.
10. List this matter on 7th December, 2022 in the supplementary list.
11. The record of the W.P.(C) 15529/2022 titled M/s Indospirit Private Limited v. Commissioner of Excise Government of National Capital Territory of Delhi & Ors. be also scanned with the present writ petition and be sent to this Court.”
9. As per the above order, the Deputy Commissioner, Excise, GNCTD was to take a decision in compliance with the order dated 14th November, 2022 passed in W.P.(C) 15529/2022. Further, this Court directed the impleadment of M/s. Indo Spirit as Respondent No.4 in the present petitions so that the matter could be considered in a comprehensive manner.
10. Today, ld. ASC for the GNCTD has placed on record a copy of the order dated 5th December, 2022 passed by the Deputy Commissioner, Excise. The authority has refused permission to M/s. Indo Spirit, for disposal of the left-over stock. The said order reads as under:
11. A perusal of the above order would show that the primary ground on which the same has been refused is that during the period when M/s. Indo Spirit was aware of the move to the new policy i.e., from 5th August, 2022, M/s. Indo Spirit ought not to have added further stock. Since it added further stock, the stand of the authority is that it did so at its own risk and thus, the permission cannot be afforded.
12. Mr. Das, ld. Senior Counsel submits that a substantive amount of stock cannot be permitted to destroy in this manner. Specific reference is made to Rule 56 of the Delhi Excise Rules, 2010 which provides the procedure to deal with the left-over stock.
13. Mr. Sameer Rohatgi, ld. Counsel appearing for M/s. Indo Spirit submits that the mechanism as provided in Rule 56 would apply to all the persons, who were valid license holders on the date when the new excise policy became operational. As per the said Rule, the license holder ought to be allowed time to dispose of the stock in terms of the mechanism prescribed in Rule 56. He submits that under the said Rule, M/s. Indo Spirit may be permitted to transfer the stock to the new license holder i.e., the Petitioner in these two writ petitions.
14. Mr. Tripathy, ld. Counsel submits that he vehemently opposes the relief being granted in favour of the Petitioner, as according to him, the entire stock has been procured by the M/s. Indo Spirit contrary to the orders issued by the GNCTD. He also submits that the stock ought not to be permitted to be unloaded, inasmuch as the said unloading is governed by a different policy. It is made clear that the stock transfer shall be only in respect of the brands mentioned above, which are registered under the new policy in favour of the Petitioner.
15. Heard ld counsel for the parties.
16. A number of writ petitions are being filed before this Court in respect of issues, which arise qua the new excise policy, which has been introduced by the GNCTD.
17. The Delhi Excise Act, 2009 along with Delhi Excise Rules, 2010, clearly provide for the manner, in which the left-over stock is to be dealt with. The relevant rule, i.e. Rule 56 of the Delhi Excise Rules, 2010 reads as under:
18. A perusal of the above Rule would show that the following steps are to be followed by the license holder for disposal of the existing stock as on the date when the license expired i.e. in this case, on 31st August, 2022. STEP 1 - The details of the entire stock is to be given to the Deputy Commissioner - This has been done by M/s. Indo Spirit vide its letter dated 31st August, 2022. STEP 2 - The Deputy Commissioner is to allow the said license holder time of 15 days for disposal of the stock to an existing licensee, which in this case would be the Petitioner who is a license holder as per the new Policy. STEP 3 - If the disposal of the stock does not take place within 15 days, further 15 days’ time can be permitted upon the additional payment of 10% of excise duty. STEP 4 - If even in the additional 15 days, the stock is not disposed of, further 15 days’ additional time can be allowed for disposing of the stock subject to payment of 10% of the additional excise duty. STEP 5 - If the licensee is unable to dispose of the said stock within the time provided in steps 2 to 4 above, the licensee would be permitted to surrender the stock in part or in full to the Deputy Commissioner, who is then to deal in accordance with Rule 56(c) & 56(c).
19. Whenever a new policy is announced in this manner, there cannot be any void in respect of left-over stock. The entire purpose of enacting Rule 56 is, therefore, to provide a properly supervised mechanism for disposal of the existing stock, which is lying in the licensee’s premises.
20. Considering the framework prescribed in Rule 56 as also the fact that the Petitioner is now duly licensed for selling the liquor in terms of the license issued under the new regime to the Petitioner, this Court is of the opinion that the left-over stock ought to be permitted to be disposed of by M/s. Indo Spirit as per the prescribed procedure as per the Rule 56.
21. It is further clarified, in order to avoid any ambiguity, that upon the stock being transferred from M/s. Indo Spirit to the Petitioner herein, the excise duty would be payable by the Petitioner in accordance with law.
22. In W.P.(C) 16491/2022, permission is also sought for unloading of the stock of liquor, which is lying in trucks, stationed outside the warehouse of M/s. Indo Spirit. The matter was considered on 30th November, 2022 and the following order was passed. “CM APPL. 51811/2022 (for interim relief) in W.P.(C)-16491/2022
3. The Petitioner has filed the present petition seeking permission to unload the stock in question at the bonded warehouse of the Petitioner and for the sale of the same.
4. The case of the Petitioner is that with effect from 1st September, 2022 there was a new excise policy announced by the Respondent No.1 - GNCTD by which the eligibility to hold the license is now only with the manufacturing unit as per Clause 3.1. It is submitted that the Petitioner is constrained to file the present petition since the Respondents have refused to allow the Petitioner to unload stock amounting to 14,400 cases of imported Beer at the warehouses of M/s Indospirit Private Limited. Due to this, the consignment of Petitioner has been lying in trucks which are parked outside the bonded warehouse of M/s Indospirits, situated at Okhla.
5. Mr. Tripathi, ld. counsel for the GNCTD submits that a writ petition being W.P.(C) 15529/2022 titled M/s Indospirit Private Limited v. Commissioner of Excise Government of National Capital Territory of Delhi & Ors. was filed by M/s Indospirit Private Limited which has been disposed of by this Court vide order dated 14th November, 2022. Mr. Tripathi, ld. Counsel submits that the Respondent does not recognise the manufacturer under the policy regime. The relevant part of the order dated 14th November, 2022 is as follows:
2. The grievance of the petitioner essentially is that upon the expiry of the excise license which was held by it, it was left with unsold stock which could not to be disposed of till that date. The submission of Mr. Rohatgi, learned counsel appearing for the petitioner, was that although the Deputy Commissioner has been duly moved by way of representations, no action has been taken thereon. It was additionally submitted that the petitioner is presently saddled with huge costs towards rent in respect of storage of the liquor stock in a bonded warehouse and it has made a representation for being permitted to shift the same to another bonded warehouse where the rental liability would be lesser.
3. Bearing in mind the aforesaid issues which stand raised, the Court is of the considered opinion that the ends of justice would warrant the Deputy Commissioner being called upon to dispose of the pending representations with expedition and preferably within a period of three weeks from today. All contentions of respective parties on merit are kept open.
6. As per the said order, the representation of M/s Indospirit Private Limited is pending and is to be decided within three weeks, which period expires on 5th December, 2022. By the said date, the GNCTD would be taking a decision on the said representation in compliance with the order passed by this Court.
7. The Court has perused the order dated 14th November, 2022 passed in W.P.(C) 15529/2022. It is not in dispute that M/s Indospirit Private Limited was a license holder and has made a representation for disposal of the leftover stock. The short question is as to how the left over stock from the earlier excise regime is to be dealt with.
8. While the said issue is pending adjudication, this court is of the opinion that the trucks/lorries consisting of the leftover stock ought not to be permitted to be parked on the streets outside the bonded warehouse of M/s Indospirit Private Limited in Okhla. Accordingly, subject to the Petitioner furnishing all the details as required by the Excise Department and a No Objection Certificate from M/s Indospirit Private Limited, the 14,400 cases of beer are permitted to be offloaded and stored in the warehouses of M/s Indospirit Private Limited.
9. For the said purpose, the inspection by the Excise Department shall take place on 2nd December, 2022 and 3rd December, 2022.
10. List this matter on 7th December, 2022 in the supplementary list.
11. The record of the W.P.(C) 15529/2022 titled M/s Indospirit Private Limited v. Commissioner of Excise Government of National Capital Territory of Delhi & Ors. be also scanned with the present writ petition and be sent to this Court.”
23. As per the above order, permission was granted to unload the liquor from the trucks and stock in M/s. Indo Spirit’s warehouse. In terms of the directions given above, in W.P.(C) 16491/2022 the stock which is lying in trucks/lorries to the tune of 14400 cases is also permitted to be transferred to the Petitioner to be disposed of in accordance with Rule 56 in terms of the directions given above.
24. M/s. Indo Spirit is now permitted to transfer its entire left over stock to the Petitioner within a period of 3 days under the supervision of officials of Excise Department, GNCTD. It is again clarified that the excise duty in accordance with law would be payable by the Petitioner in respect of any stock which may be disposed of by it.
25. Both writ petitions and all pending applications are disposed of.
PRATHIBA M. SINGH, J DECEMBER 7, 2022/dk/am