f^tj A PTpl? _ 3 STATE EXCISE DEPARTMENT: FUNCTIONS, DUTIES AND RESPONSIBILITIES

Transcription

1 f^tj A PTpl? _ 3 vx JL JL.JL JL JL JL STATE EXCISE DEPARTMENT: FUNCTIONS, DUTIES AND RESPONSIBILITIES

2 CHAPTER-3 STATE EXCISE DEPARTMENT: FUNCTIONS, DUTIES AND RESPONSIBILITIES 3.1 Introduction: The Excise Department collects 18 percent of the total tax revenue for the State. The total revenue realized by the State Excise Department during the financial year was Rs Crores, showing that next to Sales Tax Department, State Excise Department is the second largest revenue collection or revenue earning department in the State. The department not only collects revenue through excise duties, but also has a major responsibility of controlling spurious liquors. The department has a huge enforcement personnel working under department s Intelligence Bureau, which enforces Excise Department s various Acts and Rules in controlling Illicit Distilled (I.D) liquors, detecting Non-duty paid liquor and prevention of evasion of Excise revenue Prior to re-organization of the State, in 1956, the Excise Department is attached to the Revenue Department. After reorganization, a separate department, namely, State Excise Department is created and made this department to function independently under the overall control of Finance Department. Earlier to re-organization of the State there are several Excise Acts in force, and these Acts are continued to be in force even after re-organization of the State. Some of these Excise Acts are as follow; i. The Mysore Excise Act of 1901 (Act No.V of 1901) ii. The Hyderabad Abkari Act of 1316 (No.l of 1316 F) 48

3 iii. The Madras Abkari Act of 1886 (Madras Act I of 1886) The existence of different sets of Acts in the unified Karnataka (then Mysore) State caused considerable administrative and procedural difficulties. Therefore, with a view to having a uniform law for the entire State, a uniform Excise Bill has been prepared and implemented throughout the State from and thus by replacing the old Excise Acts of different States. 3.2 Organizational Structure (Functions): The State Excise Department is headed by the Excise Commissioner, who is assisted by one Joint Commissioner of Excise dealing with Head Quarters Administration and other important matters. Two Joint Commissioners of Excise, located in the Head Office, will assist the Excise Commissioner in respect of Distilleries, Breweries and Audit. In addition, three Deputy Commissioners of Excise, located in Head Office will assist the Excise Commissioner to look after Administration, Legal cell and Narcotics. The Joint Commissioners of Excise, State Excise Intelligence Bureau with jurisdiction over the entire State also assists the Excise Commissioner in enforcement matters. There are five enforcement and inspection divisions all over the State, headed by each division a Joint Commissioner of Excise. The enforcement and inspection divisions head quarters are being located at Bangalore, Mysore, Mangalore, Belgaum and Gulbarga. The enforcement wings of the department deals with enforcement activities like controlling I.D. liquor, detecting Non-duty paid liquor and prevention of sale of spurious liquors in the market etc,. 49

4 3.2.2 Under the directions of Revenue Deputy Commissioners, at the district level, the Deputy Commissioners of Excise will look after conducting arrack action, sales and supply of arrack, collection of arrack rentals, and issue of licenses to IML and arrack shops, collection of Excise duties and fee as well as enforcement activities. Officers of the rank of Superintendent of Excise / Deputy Superintendent of Excise / Inspector of Excise assisted by other staff are posted to Distilleries, Breweries, Wineries and Arrack manufacturing units to supervise the manufacture and issue of duty paid liquor and to enforce other excise laws. The department also has a Central chemical laboratory headed by a Chief Chemist who examines samples of all types of liquors and certifies it. The organizational Chart of the Excise Department is given at page Posts filled in the Excise Department as on January, 2005 is given in the following table; BANGALORE imvenstty UBRART IMNGALAGANGOTtiFS 57a 199 Table 3.1 : No of posts filled in the Department Sl.No Post Name No. of posts filled 1 Excise Commissioner 1 2 Joint Commissioners 9 3 Deputy Commissioners 32 4 Superintendent of Excise 71 5 Deputy Superintendent of Excise Chief Chemist 1 7 Junior Chemists 2 8 Managers 34 9 Inspectors of Excise

5 SI.No Post Name No. of posts filled 10 Sub Inspectors of Excise First Division Assistants Second Division Assistants Stenographers Typists Head Guards Excise Guards Drivers & Group D Employees 298 Total 4534 Deputation from other Departments 17 Joint Director of Statistics 1 18 Assistant Director of Statistics 1 19 Accounts Officer 2 20 Assistant Accounts Officer 5 21 Senior Auditor 2 22 Senior Accountant 5 23 System Analyst (Grade-A) 0 24 Computer Data Entry Operator 0 25 Junior Programmer 0 26 Total: Deputation Departments Grand Total 4550 Source: State Excise at a Glance, Up to Jan State Excise Department Publication The total number of sanctioned posts in the department is 4587 and 4550 posts are filled up, the remaining 37 posts are vacant as on January,

6 ADMINISTRATIVE CONTROL OF STATE EXCISE DEPARTMENT

7 3.3 Duties of Joint Commissioners: As indicated in the Organizational Chart, there are several different duties are entrusted to the Joint Commissioners of Excise. They also the Joint Commissioner of Excise Intelligence Bureau (EIB), having a very important duty of collecting Intelligence with respect to various activities of the offenders i.e., manufacture, transportation and sale of illicit distilled liquor and also duty paid excisable articles. Further EIB will collect intelligence with respect to leakage of Government revenue from distilleries and will take suitable action to recover the pending dues. EIB will also collect intelligence on the activities of the licensed distillers, Breweries and Excise contractors to avoid revenue leakages. All important intelligence so collected will be discussed with the Excise Commissioner before taking action on offenders. JCE will conduct surprise inspections and with prior approval of Excise Commissioner, he sends officers and staff under his control to tour secretly all the districts, observes the activities of the Excise Licensee in the district and submit reports to the Excise Commissioner. During such tours the team of State Excise Intelligence Bureau, will invariably check whether Excise department s (as per Excise Acts) rules and regulations are strictly followed by the licensee. JCE will further, conduct road checks, draw samples of toddy, arrack and IML and send them for chemical analysis. The Superintendent of Excise is also responsible for prompt enquiry of the petition, complaints referred to him by the Excise Commissioner, without causing any delay and will submit the report. The Joint Commissioner of Excise, State Excise Intelligence Bureau will work directly under the control of the Excise Commissioner. 53

8 3.3.2 Divisional level Joint Commissioners of the Excise, are the Divisional heads in so far as enforcement activities of the Divisions are concerned. They will maintain a list of all the notorious illicit Distillation manufacturing and selling centers. They will arrange to gather intelligence on the activities in their centers by mobilizing the enforcement staff under their control. No raids will be conducted by the subordinate staff without the permission of the Joint Commissioner. In special circumstances, the raids will be conducted in accordance with a monthly programme to be drawn by Joint Commissioner, Enforcement and Inspection (E & I). The programme drawn by Joint Commissioner (Enforcement and Inspection) will be kept in a sealed cover and the subordinate officers will open only on the day of the raid. Further, a regular road surveillance, day and night will be done to prevent illegal transportation of excisable articles. The Joint Commissioner of Excise (EIB), will conduct detail inspection of the primary distilleries in their jurisdiction, once in a year. They will also undertake cursory inspections of the Ranges and Sub-ranges compulsorily during their visits to Range and Sub-ranges. It is the responsibility of the Joint Commissioners of Excise (Enforcement and Inspection) to guide in detecting illicit I.D. and to see that investigating officers of the department will book the culprits by promptly charge sheeting. They will also conduct detail inspection of the Excise Intelligence Bureau s and Sub-division Offices at least to the extent of 50% in their jurisdiction, once in a year and other 50% in the next year, so that these offices are inspected at least once in two years. 3.4 Duties of Deputy Superintendent of Excise: 54

9 3.4.1 The Deputy Superintendents of Excise will be incharge of Excise * and Intelligence Bureau (EIBs) are directly responsible to put down illicit manufacture, transportation and sale of illicit liquor and other excisable articles in their jurisdiction. For this purpose they should co-ordinate with the Deputy Commissioner of Excise of the Districts and also the Deputy Superintendent of Excise of the Sub-divisions. They will also visit the Range and Sub-range offices in their jurisdiction and conduct cursory inspection only with regard to the disposal of Crime cases. They also undertake road watches and night patrolling. The Deputy Superintendent of Excise, incharge of Excise and Intelligence Bureau (EIBs) will undertake minimum 6 night patrolling and 6 road watches personally every month. Unless specifically asked by Joint Commissioner of Excise (Enforcement and Intelligence), the Deputy Superintendent of Excise, incharge of Excise and Intelligence Bureau will not normally engage in routine inspections of shops. They will inspect shops only when there is specific complaints. ^^3^) f06lc.pt D0( The Deputy Superintendents of Excise incharge of the Subdivisions are the unit heads of the Enforcement Wing of the Department. Since they are incharge of minimum jurisdiction of 3 to 4 taluks in the District, they should have full knowledge of all kinds of Excise establishments in their jurisdiction including all activities connected with the Department. The Deputy Superintendent of Excise will collect intelligence and details about every Illicit Distillation manufacturing and selling centers in their jurisdiction and will conduct raids in co-ordination with the Range and Sub-range staff, regularly. The Deputy Superintendents of Excise, incharge of the Sub-divisions, unless directed by the Joint Commissioner of Excise (Enforcement and Inspection), will 55

10 not normally engage in routine inspections of liquor shops which will be done by Range Inspectors of Excise and Sub-Inspectors of Excise, who are usually incharge of Range and Sub-ranges. The Deputy Superintendents of Excise incharge of the Sub-divisions will visit all the important places and towns in their jurisdiction and will inspect at least once in two months. They will also visit all the Sub-ranges and Ranges in their jurisdiction for the purpose of review of disposal of crimes. It is the responsibility of the Deputy Superintendent of Excise to see that every investigating officer maintains Case Diary in respect of each case and the progress of investigation recorded in each diary. The Deputy Superintendents of Excise will record their observation in the diaries after reviewing the progress done in individual cases. It is Deputy Superintended of Excise responsibility to see that the Investigating Officers are guided properly to obtain maximum conviction in cases filed in the Courts. 3.5 Duties of Deputy Commissioners of Excise: The Deputy Commissioner of Excise is the Executive Head of the Excise Department in the District level. However, for all the District level Departments (including the Excise Department in the District) the Revenue Deputy Commissioner will be the Administrative Head of the District. The Deputy Commissioner of Excise is responsible for supervising the work of all the sub-ordinate Excise offices under his control. He is required to review the work of Ranges and Sub-ranges at frequent intervals and see that the Unit level administration is carried on with all efficiency by the Field Staff. He will review the progress of collection of Excise dues, including arrears of previous months. He will 56

11 personally scrutinize once in a month the cases of defaulters with fine of Rs.5000 to 25000, depending upon the gravity of the offence and above. He is responsible to take effective steps to realize the dues of Excise arrears. If the excise arrears held up due to Court stay orders, he will take up necessary follow-up action in vacating the stay orders and realize the Excise dues The Deputy Commissioner of Excise will inspect atleast 20% of the Arrack and Liquor shops in his jurisdiction during a year. Whenever he goes on tour, he will inspect the local Arrack shops functioning in the villages or in towns and he will check the boundaries of the shops, the strength of Arrack, hygienic conditions of the Arrack shops. He will also take samples of Arrack at frequent intervals and get them chemical examination for purity. He has to compulsorily inspect all the Arrack shops and Arrack manufacturing units and also review the monthly consumption of Arrack, and accordingly the Arrack should be lifted from the Arrack manufacturing units. He has to keep a close watch on Arrack contractors to avoid selling of adulterated Arrack The Deputy Commissioners of Excise will inspect all the licensed liquor shops premises in their jurisdiction once in six months without fail. It is the personal responsibility of the Deputy Commissioner of Excise to see that every month to check retail liquor shops and Bar & Restaurants regarding details of the quantity of liquor lifted from Government Go-downs and quantity of liquor sold. The information thus collected from all liquor outlets will be reviewed during the monthly meetings of the Inspectors of Excise and Sub-Inspectors of Excise, usually the meeting will be held first week of every month. The Deputy 57

12 Commissioner of Excise in the district also conducts a detailed inspection of the Range and Sub-range offices under his jurisdiction at least once in a year. These inspections will cover thorough review of all items of work carried out and all records maintained by the Inspector of Excise or Sub-inspectors as the case may be. Apart from this, he will conduct cursory inspection of all Ranges and Sub-ranges in his jurisdiction at least once in two months which will include review of collection of rentals and disposal of crimes cases. He will tour at least 12 days in a month in his jurisdiction. He will have to make atleast six night halts in a month. During his absence Superintendent of Excise will attend to day-to-day work of the office of the Deputy Commissioner of Excise in the District After conducting the monthly meeting, the Deputy Commissioner of Excise will send a special report covering the review conducted by him to the Excise Commissioner, in his personal name. Whenever the consumption of Liquor is lower by more than 5% of the target fixed for the Range/ Sub-range, explanation of the concerned Inspector/ Sub- Inspector will called and disciplinary proceedings initiated. The Officers who are fail to achieve the target will be considered for posting to stationary jobs in chemical units, distilleries etc., such shortfall will be immediately reported to Excise Commissioner and remedial measures will be taken to make it good. The Deputy Commissioners of Excise are personally responsible for submission of all periodical statements and other monthly statements etc., to the Excise Commissioner s Office. He will ensure timely submission of Diaries and other progress reports from all the Inspector of Excise / Sub-Inspector of Excise in his jurisdiction and maintain strict discipline in these matters. 58

13 3.6 Duties of Superintendent of Excise: The Superintendent of Excise post is created in the Office of the Deputy Commissioner of Excise at District level and he will function as a Headquarter Assistant to the Deputy Commissioner of Excise. He will be the second line officer at the District level. The Superintendent of Excise is responsible for proper management of the office and he will see that all papers received in the office are promptly attended by the ministerial staff and all reports to be sent to higher authorities, without causing any delay. He will be responsible for collecting necessary information required from all subordinate offices in the district. In the absence of the Deputy Commissioner of Excise, he will take charge of the office and will discharge all normal functions like issuing of permits, disposal of urgent papers, intelligence gathering etc., This is necessary to avoid any inconvenience in the functioning of the Department at the District level. All actions taken by him in the absence of the Deputy Commissioner of Excise will be brought to the notice of Deputy Commissioner of Excise in due course. The Superintendent of Excise also undertake inspections of the subordinate offices in the district in consultation with the Deputy Commissioner of Excise. The inspections and tours will be so arranged that either the Deputy Commissioner of Excise or Superintendent of Excise will always remain in the Headquarter when one of the officer is on tour. 3.7 Duties of the Inspector of Excise: 59

14 3.7.1 It is the personal responsibility of the Inspector of Excise to look after the entire administration of the Range office for which he will be incharge. He will compulsorily inspect all kinds of liquor shops, bars and arrack shops under his jurisdiction atleast once in a quarter. He will also conduct detailed inspection of the offices of the Sub-Inspector of Excise under his jurisdiction at least once in a year. Cursory inspection will be done atleast once in a month. He is personally responsible for checking illicit distillation and its sale and also for conducting raids on these joints in his jurisdiction. He is also responsible for proper detection, investigation and disposal of crime cases in his jurisdiction. He has authority to book cases and also personally scrutinize the detection, investigation and disposal of cases, which are attended by the Sub- Inspector of Excise. Improper investigation, delay in submission of charge sheet, delay in obtaining chemical examiner s report etc., by himself or by his subordinate will render the Inspector of Excise for disciplinary action. The Inspector of Excise who is incharge of a Range will maintain all the registers and various forms prescribed for booking cases. He will also submit Itineration Statement to the Superintendent of Excise once in week, after completion of the Itinery. The Itineration will be in prescribed format and will include actual stocks of Arrack or IML find at the time of inspection and test for strength. 3.8 Duties of the Sub-Inspector of Excise: The Sub-Inspector of Excise, incharge of the Sub-range will be responsible for the duties connected with the department. He is personally responsible for prompt collection of Excise rentals every month. He is also responsible for prompt supply of Arrack to the 60

15 contractors of his jurisdiction. He will invariably inspect all the Excise licensee under his jurisdiction without fail, at least once in a month. He will promptly attend to the detection, investigation and disposal of crime cases. He will gather information regarding illicit manufacture and sale of illicit liquor and arrange regular raids to curb the menace of Illicit Distillation of Liquor. He will compulsorily maintain the registers and forms prescribed and he will submit statement of itineration promptly every week to the Inspector of Excise of the Range. The itineration will be in the prescribed format and will include the actual stocks of arrack and IML found at the time of inspection and also test of strength. 3.9 Responsibilities (As per Excise Rules): The officers and officials of the Excise Department have a great responsibility of taking care of liquor consuming consumers health by detecting and destroying spurious or Illicit Distilled Liquor. The duties of Excise Department officials itself clearly indicates the responsibility shouldered by them. The officers posted in the Distilleries, Breweries and wineries have great responsibility of checking and maintaining the quality of the liquor manufactured by the distilleries Any person holding a Distributor license under the Karnataka Excise (sale of Indian and Foreign liquors) rules, 1968 or any person authorized by him and desiring to transport intoxicants from a Distillery or Brewery or Winery to his licensed premises will apply to the Exdse Officer in charge of the Distillery or Brewery or Winery for a transport permit. The Excise officer attached to the distillery, after verifying his credential will issue a transport permit in quadruplicate. Part-1 of the 61

16 permit will be kept on the record of the office of the Excise officer incharge of the Distillery, Brewery or Winery. Part-2 of the permit will be sent to Deputy Commissioner who have jurisdiction over the Distillery, Brewery or Winery. Part-3 of the permit will be handed over to the person authorized by the distributor or to the transporter authorized by the distributor to receive alcohol consignment and to transport the same. Part-4 of the permit will be sent to the Excise officer incharge of the Depot. The Excise officer incharge of the Distillery, Brewery or Winery will on production of the challans for having paid the prescribed duty and additional duty etc., in the manner prescribed by the State excise rules. Distilleries will issue the intoxicants specified in the transport permit. Immediately after the consignment covered under the transport permits received, distributor licensee will intimate the Excise officer incharge of the depot on the arrival of the consignment. On receipt of such intimation, the Excise officer responsibility is to verily the consignment, its quantity and quality of the intoxicants Whenever the Distributor of intoxicants or any person authorized by him desires to transport intoxicants from one depot to another depot, he will apply to the Excise officer incharge of the depot from where the intoxicants has to be transported for a transport permit. The responsibility of the Excise officer attached to the depot is that, after verifying the application and enquiring reasons for transportation of intoxicants, he will issue a transport permit in quadruplicate in Form Excise Permit (Transport) ( E.P.(T)). Part-1 of the permit will be kept on the record of the office of the Excise officer incharge of the depot, from where intoxicants has to be transported. Part-2 of the permit will be sent to Deputy Commissioner who have jurisdiction over the depot, from 62

17 where intoxicants has to be transported. Part-3 of the permit will be handed over to the person authorized by the distributor or to the transporter authorized by the distributor to carry the same along with the consignment during the transportation. Part-4 of the permit will be sent to the Excise officer incharge of the Depot. The Excise officer incharge of the depot will issue the intoxicants specified in the transport permit. The responsibility of the Excise officer is to seal each cask, drum, package or other consignments containing intoxicants. Then, the Excise officer will permit the transport of intoxicants Whenever a person holding a Wholesale license under the Karnataka Excise (sale of Indian and Foreign Liquors) Rules, 1968 desires to transport intoxicants from a depot of a Distributor Licensee, to his Wholesale licensed premises, he will apply transport permit to the Excise officer incharge of the Depot. The Excise officer, after verifying the application and after such enquiries as he may consider necessary, will issue a transport permit in quadruplicate in Form E.P.(T). Part-1 of the permit will be kept on the record of the office of the Excise officer incharge of the depot, from where intoxicants has to be transported. Part- 2 of the permit will be sent to Deputy Commissioner who have jurisdiction over the premises of the wholesale licensee from where intoxicants has to be transported. Part-3 of the permit will be handed over to the wholesale licensee or to the person authorized receive it to carry the same along with the consignment during the transportation. Part-4 of the permit will be sent to the Inspector of Excise, incharge of the Range having jurisdiction over the premises of the wholesale licensee. Immediately after the consignment covered under the transport permit is received, the wholesale licensee will intimate the Excise officer incharge 63

18 of the Range having jurisdiction over the wholesale licensed premises, of the arrival of the consignment. On receipt of such intimation, the Excise officer s responsibility is to verify the consignment and permit warehousing and sale of the intoxicants To transport intoxicants from wholesale licensee to retail shops, a person holding a license in Country Liquor (CL) Forms CL-2, CL-4, CL- 5, CL-6, CL-6A, CL-7, CL-9, CL-14 and CL-15, under the Karnataka (sale of Indian and Foreign Liquors) Rules, 1968 will apply to the Excise officer incharge of the Range having jurisdiction over the premises of the license held by him for a transport permit. The Excise officer, after verifying the application and after such enquires as he may consider necessary, will issue a transport permit in quadruplicate in Form E.P.(T). Part-1 of the permit will be kept on the record of the office of the Excise officer incharge of the Range having jurisdiction over the licensed shop to where intoxicants has to be transported. Part-2 of the permit will be sent to the wholesale licensee from where intoxicants has to be transported, for his record. Part-3 of the permit will be handed over to the retail licensee or to the person authorized receive it to carry the same along with the consignment during the transportation. Part-4 of the permit will be sent to the Inspector of Excise, incharge of the Range having jurisdiction over the premises of the wholesale licensee from where intoxicants has to be transported to retail outlets. On production of Part-3 of the permit the wholesale licensee will issue the intoxicants as per the permit and in case of any short supply he will record the same in the permit. He will also record the date and time of issue of consignment and the registration number of the vehicle on the permit. 64

19 3.9.6 To transport intoxicants from distilleries to Military canteens, a person who is holding a license in From CL-8, CL-8A or CL-8B issued under the Karnataka Excise (sale of Indian and Foreign liquors) rules, 1968 and desiring to transport intoxicants from a distillery to the Military Canteens will apply to the Excise officer incharge of the distillery for a transport permit. The Excise officer incharge of the distillery after verifying the application and after such enquires as he may consider necessary, will issue a transport permit in quadruplicate in Form E.P. (T). Part-1 of the permit will be kept on the record of the office of the Excise officer incharge of the distillery. Part-2 of the permit will be sent to the Deputy Commissioner of Excise who is having a jurisdiction over the distillery. Part-3 of the permit will be handed over to the transporter or to the person authorized to receive it and carry the same along with the intoxicants during the transportation. Part-4 of the permit will be sent to the Excise officer, having jurisdiction over the premises to which intoxicants has to be transported. The responsibility of the excise officer in charge of the distillery, on production of the challans for having paid the prescribed duty or additional duty etc. The excise officer will check and seal each cask, drum, package or other consignments containing the intoxicants. After verification, he will allow the transporter will transport the consignment to the Military Canteens To transport bulk beer / draught beer from a brewery, a person holding license in Form II issued under the Karnataka Excise (lease of right to retail vending of Beer) rules, 1976 will apply to a transport permit to the Excise officer incharge of the Brewery from where bulk beer or draught beer has to be transported. The Excise officer incharge of the Brewery, after verifying the application and after such equerries as he 65

20 may consider necessary will issue transport permit in quadruplicate in Form E.P.(T). Part-1 of the permit will be kept on the record of the office of the Excise officer incharge of the Brewery. Part-2 of the permit will be sent to the Deputy Commissioner of Excise who is having a jurisdiction over the Brewery. Part-3 of the permit will be handed over to the transporter or to the person authorized to receive it and carry the bulk beer or draught beer during the transportation. Part-4 of the permit will be sent to the Excise officer, having jurisdiction over the premises to which bulk beer or draught beer has to be transported. The officer incharge of the Brewery will on production of the challans for having paid the prescribed duty or additional duty etc., in the manner prescribed by the licensee holding Brewery license will allow the Beer consignment after sealing the drums or other receptacles containing the bulk beer or draught beer to transport from the Breweries Any person to transport bulk wine from the winery must have license in From III issued under the Karnataka Excise (lease of right to retail vending of wine) rules, 1985 will apply for a transport permit to the Excise officer incharge of the Winery from where bulk Wine is to be transported. The Excise officer incharge of the Winery, after verifying the application and after such enquires as he may consider necessary, may issue a transport permit in quadruplicate in Form E.P.(T). Part-1 of the permit will be kept on the record of the office of the Excise officer incharge of the Winery. Part-2 of the permit will be sent to the Deputy Commissioner of Excise who is having a jurisdiction over the Winery. Part-3 of the permit will be handed over to the transporter or to the person authorized to receive it and carry Wine in bulk during the transportation. Part-4 of the permit will be sent to the Excise officer, 66

21 having jurisdiction over the premises to which bulk Wine has to be transported.. The officer incharge of the Winery will on production of the challans for having paid the prescribed duty or additional duty etc., in the manner prescribed by the licensee holding Winery license will allow the Wine consignment after sealing the drums or other receptacles containing the bulk Wine to transport from the Winery Whenever a licensee issues intoxicants, he will issue a copy of the original invoice issued to the transport of the intoxicants so as to accompany the same along with Part III of the transport permit during transportation of the intoxicants. The licensee will also endorse on the invoices the following information in bold letters, namely, number and date of transport permit, date and time of issue of intoxicants and registration number of the vehicle. In case of intoxicants transported from a distillery, brewery, winery or a depot of the Distributor licensee, as the case may be, the invoices will be countersigned by the Excise officer incharge of such Unit. The Excise officer incharge of the distillery, brewery, winery or a depot of the Distributor licensee, as the case may be, will endorse on Part III of the permit, the following information in bold letters, namely, number and date of the invoice, date and time of issue of intoxicants and registration number of the vehicle. Provided that in case of intoxicants issued from wholesale licensed premises, the licensee himself will endorse the above information on Part III of the permit Rules which govern the production of inputs used (raw materials) in liquor manufacture cover distilleries which produce and store rectified spirit used for the manufacture of both Arrack and Indian Made liquor 67

22 (IML). Similar rules have been enacted for Breweries manufacturing Beer. Separate rules have also been framed for bottling of IML and Beer. In the case of Arrack and Toddy (of which manufacture is permitted only in a very limited way), there are separate manufacturing and bottling rules. Allocation of rectified spirit for Industrial and Pharmaceutical purposes is also covered by two sets of rules. Similarly, rules are also framed for industrial use of non-potable alcohol (de-natured spirit). Comprehensive rules have also been framed for issue of license for the storage and transport of all intoxicants, but there is a separate set of rules applicable to transport from outside the State. There are six sets of rules applicable to liquor sale. Draught Beer and Wine are covered by separate legislation while auctions for retail vending of all liquor fall under the Karnataka Excise (lease of the right to retail vending of alcohol) Rules, The most important rules that are applicable with respect to duties, responsibilities and fees. The Karnataka Excise (Excise Duties and Fees) Rules, 1968 which prescribes the excise duty and liter fee leviable on all excisable articles. Auction rentals of arrack vending rights constitute the major revenue source. Further, licenses for transport and storage of excisable commodities used for potable, industrial and other purpose are charged under rules applicable to such transport and storage. In addition, under the Permit Fee Rules of 1990, an additional permit fee is levied on all transport permits. Apart from these rules, there is the usual set of rules required for enforcement purposes, appeal, issue of duplicate license and permits, inspection and investigation, arrest, disposal of crime cases, disposal of confiscated articles and destruction of 68

23 sized intoxicants etc,. Separate legislation has been enacted to specific conditions applicable to all licenses Entry 8 of the State list (List-II) of the Constitution gives States full power to regulate intoxicating liquors and their production, transportation, possession, purchase and sale. Entry 51 of the same list extends this power to Excise duties on the production of alcoholic liquor human consumption and narcotics (excluding medical and toilet preparations) within the State. It empowers States to levy countervailing duties at the same or lower rates on similar goods manufactured elsewhere in the country. The Karnataka Excise Act of 1965 and various rules under this Act have been enacted under these provisions. The Excise Manual lists 43 different rules, of which 35 have been issued under the Excise Act and the rest under related Acts. Some of the rules have limited applicability today, however, they continue on the Statue Book although notifications issued under them are not in force at present The New Excise Policy: The Excise Department introduced radical changes due to some old excise rules being limited applicability. In this regard a new Indian Made Foreign Liquor (IML) policy introduced from The aim of new IML policy was; (a) curbing of Non Duty Paid Liquor (NDPL), (b) rationalization of excise duties, (c) maximization of duty on IML sales, (d) optimization of excise revenue to Government. In order to implement the new IML policy Government took following measures; i. Setting up Karnataka State Beverage Corporation Limited. 69

24 ii. Canalizing of Indian Made Foreign Liquors (IMFL) through Karnataka State Beverage Corporation. iii. Canalizing of Rectified Spirit (RS) and Denatured Spirit (DS) through Karnataka State Beverage Corporation. iv. Reduction of Additional Excise Duty on all segment of Indian Made Foreign Liquors. v. Reduction of consumer price of Indian Made Foreign Liquors from Rs.42 to Rs.26 per Nip. vi. Supply of Rectified Spirit to chemical industries only through Karnataka State Beverage Corporation. vii. Printing of Maximum Retail Price (MRP) on Liquor Bottles of all segments of Indian Made Foreign Liquors and introduction of margin of profit to Kamantaka State Beverage Corporation, wholesalers and retailers. viii. Permission for the Indian Made Foreign Liquors manufacturers to revise their price slabs once in 3 months with the prior approval of Excise Commissioner. ix. Computerization of Indian Made Foreign Liquors sales and accounts of Karnataka State Beverage Corporation. x. Under the new policy wholesalers cannot buy their requirement directly from distilleries but only through Karnataka State Beverage Corporation. xi. Karnataka State Beverage Corporation has set up its own depots in all 27 districts of the State. xii. Advantageous to wholesalers since Indian Made Foreign Liquors/Beer/Fenny/Wine of any brand is available next door. Earlier the wholesalers were going to different distilleries for procurements of different brands of liquors. 70

25 After introduction of new Indian Made Foreign Liquors policy the Government announced new Arrack policy in the budget speech on 19th July, 2004 to eliminate of non-duty paid (Seconds) arrack. This new policies has eased the hardship faced by the Excise Department in the supply of arrack under old excise rules to the contractors. Under the new excise policy, the entire arrack trade and Indian Made Foreign Liquors is totally market driven, allowing the market demand and supply forces to determine the prices rather than Government administering the prices of rectified spirit and arrack. Government has only put a ceiling on the maximum retail price of arrack. In order to implement the new Arrack policy Government took following measures; i. Rectified Spirit and Denatured Spirit for all users has been fully canalized through the State owned Karnataka State Beverages Corporation Ltd., to prevent mis-use and diversion to unauthorized users. ii. To control non-duty paid arrack, the price differential between the market price of non-duty paid arrack and administered price of arrack has been removed by reducing the Excise Duty per Bulk Liter of arrack from Rs.20 to Rs.2 and shifting the levy to the point of manufacture. iii. Arrack manufacture has been liberalized. Till last year, the State owned Mysore Sales International Limited ( MSIL) and Mysugar Co., Ltd., were manufacturing arrack. Now, all primary distilleries have been permitted to manufacture arrack and fix the sale price according to the market demand and supply situation. Government has put a ceiling 71

26 on the maximum retail price of arrack to the consumers (Rs.l 15/- per Bulk Liter). iv. Strict quality control inspection and quality certification of Rectified Spirit and Arrack. v. Sale of toddy has been banned in the State except in Dakshina Kannada and Udupi districts. Now, under new excise policy sale of toddy also banned in Gulbarga and Raichur districts The Indian Made Foreign Liquors policy increased the sale of Indian Made Foreign Liquors to extent of 500% when compared to previous years. Some of these changes in excise policy made Karnataka the highest revenue earning State in the Country. In consonance with the new excise policy, which has resulted in higher revenue to the State Exchequer, the departmental machinery is to be geared up to meet the new challenges. Further, the Government has felt to streamline the functions of the department for better utilization of the services of certain posts which have become redundant after creation of the post of Deputy Commissioner of Excise during the year The organizational chart according to new excise policy is given at page As per G.O.No.FD 212 EPS 2004, dated the salient features of the re-structuring of the department under new excise policy is as follows: 72

27 a) Administrative Powers: Even after the restructuring of the Excise Department, the administrative powers vested with the Deputy Commissioner (Revenue) is not altered. Only the Superintendents of Excise, and his duties and functions is shifted to Enforcement & Inspection Wing as Head of the District and re-designated as Superintendent of Excise (E I B). All the enforcement & inspection work in a district will be under the overall supervision of Joint Commissioner of Excise (E & I) of the Davison. b) Financial Powers: i. Consequent of the re-structure of the Excise Department, each taluk Enforcement & Inspection Office headed by Deputy Superintendent of Excise of the sub-division has provided with two Sub- Inspectors of Excise & five Guards. Salary drawing has to be given to the Deputy Superintendent of of Excise, in order to draw the salary of the Sub- Inspector of Excise & Guards, ii Superintendent of Excise (E & I) in each district is given salary-drawing powers in order to draw salary of his staff. 73

28 c) Administration of Excise: i. The powers of the Excise Officers as per their designation is continued as per the existing provisions of the Excise Act. Earlier, only in respect of section 43 A the taluks is bifurcated between Superintendent of Excise and Deputy Commissioner of Excise in a District to hear the cases. Now, the Superintendent of Excise is made the sole authorized officer for the entire district. ii Superintendent of Excise is made in-charge of the district as Superintendent of Excise (E I B) by issuing a notification, defining their jurisdiction iii Deputy Superintendent of Excise of Subdivision and EIBs is redeployed in 57 subdivisions in the State, defining their jurisdiction in order to perform their duties. iv The Sub-Inspectors of the sub-ranges in the entire State are re-deployed in 224 taluka E & I Offices, after defining their jurisdiction for Enforcement & Inspection work. v Since one Inspector of Excise is being provided for each taluka in the State, the existing Inspector of Excise is redeployed in the 224 ranges of the State, by defining their jurisdiction.

29 vi After withdrawing the Superintendent of Excise, from the office of the Deputy Commissioner of Excise, services of the Deputy Superintendent of Excise, are provided to D.C Excise in the District to to assist them both in the office work as well as in the collection of revenues at the field level by defining their jurisdiction The Government Order issued by Finance Department states that there is no additional financial implication (expenditure) for the proposed re-structuring of the Excise Department. 75

30 ORGANIZATIONAL STRUCTURE AT THE DISTRICT LEVEL AFTER RESTRUCTURING a) Conducting of Excise A notions. b) Collection oj A track Rentals and Excise revenue in the district.. c) Supply oj A track and IML in the District through Permits. d) Compounding of offkence under section 45 and 45A and all other matters pertaining to excise A dministratkm in the district. Functions of Superintendent of Excise ElB in the District a) Authorized officer of the District to discharge the Duties u/s 43A h) Prevention of smuggling of spurious liquor and illegal trcmsportation/sak of RS, Toddy. Narcotics and Psychotropic substances. ci Curbing of ID and illegal manufacturing of Arrack and IML. d) Effective enforcement activities to increase the official consumption of arrack and IML in the district. e) Proper supervision and control over the district enforcement stiff. 76