Excise dept slaps ₹7.5 crore duty on Rajpura-based NV distilleries

CHANDIGARH : The Punjab excise and taxation department has imposed a duty of Rs 7.48 crore on NV Distilleries and Breweries for alleged contravention of the liquor laws.

The excise duty has been imposed by collector-cum-deputy commissioner (excise), Patiala Zone, Raj Pal Singh Khaira on the company for unaccounted liquor found at its premises in Rajpura during an inspection last year.

He issued the order under 1-AAA of the Punjab Excise Fiscal Orders two weeks ago after giving the company a hearing on the department’s submission that the distillery allegedly tried to evade duty, according to an official in the know of the matter. During the inspection carried out on May 21 and 22 last year, an excise team had found “unaccounted” liquor stock of 22,936 cases of Indian-made foreign liquor (IMFL) having 1,49,695 proof litres.

The cases were not in the regular stock of account maintained by the distillery – a contravention of the provisions of Rule 37(14) of the Punjab Liquor Licence Rules, 1956, and Rule 38 of the Punjab Distillery Rules, 1932. Excise commissioner Rajat Agarwal confirmed that the department had imposed duty on the company.

In response to a show-cause notice, NV distilleries stated that no inspection was carried out by the excise department, citing discrepancies.

Denying any wrongdoing, the company also submitted that the distillery opened under the supervision of excise inspector and remains under the 24x7 CCTV surveillance, with the manufacturing process being carried out under their (excise officials’) supervision, and, therefore, no question of unaccounted stock arose. It said the department officials posted at the distillery had not maintained proper register, according to the order.

The department officials rejected the company’s claim and cited documentary evidence and inspection record in support. “The distillery has tried to evade excise duty by keeping unaccounted stock of IMFL,” they submitted. After hearing both sides, the collector-cumdeputy commissioner (excise), in his order, held that the distillery’s contention that no inspection was conducted as wrong. “The licensee could not give any plausible explanation for difference of stock,” the officer wrote, imposing duty at the rate of Rs 500 per proof litre.

Assistant Commissioner (Excise) was also directed to initiate recovery proceedings.

When contacted, NV Distilleries’ counsel Nikhil Singh said the company has availed the statutory legal remedy available to it by filing an appeal before the excise commissioner.

“It will not be proper for me to comment on merits of the matter,” he said. The excise department had carried out a total of 40 inspections at distilleries and bottling plants in May 2020 and noticed irregularities, including unaccounted liquor, bottles without batch numbers and holograms, etc, in 11 of them.

NV DISTILLERIES’ COUNSEL NIKHIL SINGH SAYS THE COMPANY HAS AVAILED THE STATUTORY LEGAL REMEDY AVAILABLE TO IT BY FILING AN APPEAL BEFORE THE EXCISE COMMISSIONER