GOVERNMENT OF KARNATAKA ANNUAL REPORT FOR THE YEAR

GOVERNMENT OF KARNATAKA STATE EXCISE DEPARTMENT ANNUAL REPORT FOR THE YEAR 2013-14 CHAPTER-1 VISION, MISSION, OBJECTIVES AND STRUCTURE 1.1 Vision: 1.2 Mission : Optimization of Excise Revenue while preventing the use of unsafe liquor and ensure informed consumption in hygienic conditions. Implementing State Excise policies and procedures by regulating manufacture, transport, possession, sale and other activities of the trade in spirit, spirituous preparations, potable liquor and other intoxicants, and monitoring collection of associated taxes. 1.3 Objectives : 1. Generate optimal revenue for the state exchequer 2. Regulate manufacture, transport, possession and sale of all excisable articles 3. Effective enforcement and inspection to control crime 4. Impart training for better efficiency & formulate e-governance initiatives 1.4 Functions : 1. Collection of excise revenue. 2. Issue of licences for manufacture, transport, possession and sale of all excisable articles. 3. Conduct inspections of licenced premises, raids and road watches regularly. 4. Review performance at regular intervals. 5. Training of Officers and Staff. 6. Verification of EVCs and permits. 7. Registration, investigation and prosecution of cases. 8. Monitor transaction of all excisable articles. 9. Computerization of departmental activities. 1

(I) State Acts and Rules. 1. The Karnataka Excise Act 1965. 2. The Karnataka Prohibition Act 1961. 3. The Rules framed under the above Acts. 4. Narcotic Drugs and Psychotropic Substances (Karnataka) Rules 1985. 5. Karnataka Prevention of Dangerous Activities of Bootleggers Drug-offenders, Gamblers, Goondas, Immoral Traffic Offenders and Slum Grabbers Act 1985. (II) Central Acts and Rules. 1. The Medicinal and Toilet Preparation (Excise Duties) Act 1955, and Rules 1956. 2. Narcotic Drugs and Psychotropic Substances Act 1985 (Central Act No. 61 of 1985) 1.5 ORGANISATION AND STRUCTURE: 1.5.1. The Department is headed by the Excise Commissioner who belongs to the I.A.S. Cadre (Super time scale). The Headquarters of the Department is in Bangalore. The Excise Commissioner is assisted by one Additional Commissioner of Excise who belongs to IAS Cadre, two Additional Commissioners of Excise, one Joint Commissioner of Excise (Head Quarters and Administration). The other senior staff comprising Joint Commissioner of Excise (Distilleries and Breweries), Deputy Commissioner of Excise (Legal Cell), 5 Superintendents of Excise including Headquarters Assistants I and II, 6 Deputy Superintendents of Excise, a Deputy Director (Statistics) and an Assistant Director (Statistics) on deputation from Directorate of Economics and Statistics, a Senior Accounts Officer and Senior Audit Officer(Internal Audit) on deputation from the Accountant General s Office also assist the Excise Commissioner. 1.5.2. STATE EXCISE INTELLIGENCE BUREAU: The Joint Commissioner of Excise heading the State Excise Intelligence Bureau (S.E.I.B.), is headquartered in Bangalore and has jurisdiction throughout the State. The Joint Commissioner assists the Excise Commissioner on intelligence, inputs and prevention of excise offences such as illicit distillation, adulteration of liquor, illegal spirit movement, illegal transportation of liquor and evasion of Excise Duty etc. The 2

S.E.I.B. works under the direct control of the Excise Commissioner. In addition, there are four Excise Intelligence Bureaus in Bangalore (Urban) district each headed by a Superintendent of Excise under the administrative control of the Deputy Commissioners of Excise of Bangalore East, West, North and South districts who assist in enforcement and implementation of the Excise Act and Rules. 1.5.3. ENFORCEMENT AND INSPECTION DIVISIONS Further, for administrative efficiency, the state is divided into six administrative divisions. Each division is headed by a Joint Commissioner of Excise. The jurisdiction of each division is as below; Sl.No. Name of the Division Jurisdictional Districts 1. Bangalore Division Bangalore (U), Bangalore (R), Kolar, Tumkur, Ramanagarand Chikkaballapur 2. Belgaum Division Belgaum, Bijapur, Dharwad, Bagalkote and Haveri 3. Gulbarga Division Bidar, Gulbarga, Raichur and Yadagiri 4. Hospet Division Bellary, Chitradurga, Davanagere, Koppal and Gadag 5. Mangalore Division D.Kannada, U.Kannada, Udupi,Kodagu and Shimoga 6. Mysore Division Mysore, Mandya, Hassan,Chickmagalur and Chamarajanagara 1.5.4. Every Revenue district in the State has a Deputy Commissioner of Excise who works under the supervision of Deputy Commissioner (Revenue) of the districts. The Deputy Commissioner of Excise discharges statutory responsibilities under the Karnataka Excise Act, 1965 and other statutory Acts and Rules. The enforcement work in the district is the responsibility of the Deputy Commissioner of Excise. There are 34 Deputy Commissioners of Excise, one each in the districts and one at the Head Office. Bangalore Urban district has 4 Deputy Commissioners of Excise because of its vast jurisdiction. 1.5.5. Superintendents of Excise, Deputy Superintendents of Excise, Inspectors of Excise, Sub-Inspectors of Excise, Excise Head-Guards and Excise Guards comprise the executive staff of the department. There are 63 Sub-Divisions, each headed by a Deputy Superintendent of 3

Excise who functions under the administrative control of the Deputy Commissioner of Excise of the district. Officers of the rank of Superintendents/ Deputy Superintendents of Excise/Inspectors of Excise assisted by other staff are posted to Distilleries, Breweries, and Wineries to supervise the transactions and to enforce the applicable Excise Laws. The Department also has a Central Chemical Laboratory headed by a Chief Chemist. 1.5.6 KSBCL AS SOLE LIQUOR DISTRIBUTING AGENCY: With an intention of canalizing wholesale trade of liquor and to curb illegal trade in the business, Karnataka State Beverages Corporation Limited was established in the year 2003 as a sole liquor distributing agency in the State. KSBCL has so far established 56 IML depots and 39 spirit depots all over the state. 2.1 FINANCIAL CHAPTER 2 PERFORMANCE OF THE DEPARTMENT Excise Revenue mainly emanates from the following sources. a) Excise Duty and Additional Excise Duty on IML, Beer and Wine. b) Licence fee on Distilleries, Breweries, Wineries and IML vending licences. c) Fines, fees and amount realised by confiscations. d) Miscellaneous. In addition to the revenue realised under the Karnataka Excise Act 1965, the State Government also gets revenue under Medicinal and Toilet Preparations (Excise Duties) Act, 1955. The Excise Revenue in the State has been steadily increasing from Rs.7.11 crores in the year 1967-68 to Rs. 12828.32 crores in the year 2013-14. In the year 2012-13 the Excise Revenue collected was Rs. 11069.73 crores and there is an increase of Rs. 1758.59 crores in the year 2013-14 which is 15.89% growth. Expenditure made during the year of Rs.110.58 crores towards salary of Officers and employees of the Department and for other expenses, and registered 0.86% to the total Excise Revenue. 4

The source wise Excise Revenue for the years 2011-12, 2012-13 and 2013-14 areas follows:- (Rupees in Crores) SL NO SOURCE 2011-12 2012-13 2013-14 1. IML 7612.02 9241.92 10820.09 2. Beer 865.19 1205.71 1464.85 Others(Including* 1350.68 622.10 543.38 3. KSBCL Prev. Fee) TOTAL 9827.89 11069.73 12828.32 * KSBCL Pre. Fee discontinued from 01.04.2012. 2.2 EXPENDITURE : Total revenue realized and expenditure incurred by the department under salary and non-salary Heads during the years 2011-12 to 2013-14 are as follows:- (Rs in crores),particulars 2011-12 2012-13 2013-14 Revenue 9827.89 11069.73 12828.32 Expenditure 84.44 106.29 110.58 Percentage of expenditure to total receipts. 2.3 PHYSICAL 0.86% 0.96% 0.86% 2.3.1 PRODUCTION OF MOLASSES, RECTIFIED SPIRIT, IML, BEER AND WINE: The Production of Molasses, Rectified Spirit, IML, Beer and Wine for the years 2011-12 to 2013-14 are as follows:- (In lakh bulk ltrs) SL NO ARTICLES 2011-12 2012-13 2013-14 1. Molasses (in L.M.T) 14.65 16.28 13.69 2. Rectified Spirit 3500.97 3656.99 3298.51 3. IML 4524.23 4780.51 4705.20 4. Beer 1525.64 1681.77 1951.18 5. Wine 34.54 37.52 37.02 5

2.3.2 SALE OF IML AND BEER: The sale of IML and Beer for the years 2011-12 to 2013-14 are as follows:- (In lakh carton boxes) SL NO ARTICLE 2011-12 2012-13 2013-14 1. IML 494.62 506.86 526.25 Avg. per month 41.22 42.24 43.85 2. Beer 212.34 222.40 243.84 Avg. per month 17.70 18.53 20.32 2.3.3 CRIME AND ENFORCEMENT : During the year under report, the Departmental Officers have conducted 82,008 raids and have booked 21,392 cases for violation of Excise Laws. 10,704 persons were arrested and 634 vehicles involved in the crime were seized. In addition to the above, the following excisable articles were seized SL NO ARTICLES QUANTITY (ltrs) 1. I.M.L 141622 2. Beer/Toddy/Fenny 60600 3. Arrack 5289 4. RS/NS 8359 5. Illicit liquor 10071 6. F.J. Wash 82723 2.3.4 Distillery, Brewery and Winery Units:- Number of Distilleries, Breweries and Winery units renewed for the year 2013-14 are as follows: Sl. No. Unit Number of Units 1. Primary Distilleries (manufacturing Spirit) 25 2. Composite Distilleries (manufacturing both Spirit and IML) 09 3. Units manufacturing only IML 26 4. Breweries 05 5. Wineries: A) Fruit Wine B) Fortified Wine 16 08 6

2.3.5 IML LICENCES The number of IML licences renewed during the year: Sl. No. Kind of Licence 2011-12 2012-13 2013-14 1. CL-2(Retail Shops) 3921 3949 3937 2. CL-4 (Clubs) 209 208 213 3. 6A (Star Hotels) 46 53 58 4. CL-7(Hotels & Boarding Houses) 660 750 780 5. CL-9 (Bars) 3537 3566 3565 6. 11C (MSIL Shops) 312 262 383 7. RVB (Retail Vend of Beer) 265 287 308 8. Others 314 351 377 TOTAL 9264 9526 9621 2.3.6 MEDICINAL AND TOILET PREPARATIONS: Under the provisions of Medicinal and Toilet Preparations (Excise Duties) Act, 1955 enacted by Government of India, L.1 and L.2 licences have been granted for manufacture of Medicinal and Toilet Preparations containing Alcohol, Opium, Indian hemp and other Narcotic drugs and Psychotropic substances. During 2013-14, 17 L1 and 7 L2 licences were renewed. 2.3.7 ALCOHOL BASED CHEMICAL UNITS: During 2013-14, 47 licenses for use of Rectified Spirit and 59 DL-3, 2 DL-6 and 1 DL-9 licenses for use of denatured spirit have been issued. 2.3.8 TODDY Sale of toddy is allowed through Tappers Co-Operative Societies in Dakshina Kannada and Udupi districts. Revenue from this source is very insignificant compared to the revenue realised from other sources. 7

2.3.9 RETAIL SALE OF LIQUOR THROUGH MSIL: With an object of curbing over MRP sales, the Government have permitted Mysore Sales International Limited to open 463 retail outlets (CL-11c) in the state and so far MSIL has opened 383 outlets. CHAPTER 3 PERFORMANCE OF PUBLIC SECTOR UNDERTAKINGS, SOCIETIES AND SPVs [-Doesn t come under the purview of State Excise Department -] 4.1 AMENDMENTS : CHAPTER 4 AMENDMENTS AND NEW LEGISLATIVE MEASURES 1. The Government vide Notification No. FD/05/PES/2013(I) dated: 28-2-2013revised the 17 slabs of the Declared Price relating to Indian Made Liquor by increasing Rs. 40/- in each slab. 2. The Government vide Notification No. FD/5/PES/2013 (II), dated 25 th February 2013 brought an amendment to Rule 17B of Karnataka Excise Licences (General Conditions) Rules, 1967 and doubled the fee collected for transfer of licences. 3. With regard to payment of Privilege fee, Section 24 of Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 has been amended on 27-08-2013. 4. The Government vides Notification No. FD/12/PES/2013 dated: 30-7- 2013 has amended Karnataka Excise (Excise Duties and Fees) Rules, 1968 and increased the rates of AED on Indian Made Liquor by 16% to 40%. 4.2 REPORTS AND PUBLICATIONS: After the completion of every financial year, a publication is brought out by the department comprising Basic Excise Statistics highlighting revenue collections, production, sales, export and import of liquor, prevailing licence fee and duty structure, crime & enforcement activities, renewal of licences, telephone nos. and e-mail addresses of officers of the department etc. 8

CHAPTER 5 ACHIEVEMENT IN HR MANAGEMENT AND ADMINISTRATION 5.1 The number of sanctioned posts for the department is 5197, out of which 2942 posts are filled and the remaining 2255 posts are vacant. Details are given below:- Sl.No. Designations Pay Scale Sanctioned Working Vacant 1 Excise Commissioner (IAS) 67000-79000 1 1 0 2 Addl. Commissioner of Excise 37400-67000 1 0 1 (Hqtrs. & Admn.) (IAS) 3 Joint Commissioner of Excise (IAS) 37400-67000 1 0 1 4 Addl. Commissioner of Excise 52500-73000 2 0 2 5 Joint Commissioner of Excise 44250-60600 8 4 4 6 Deputy/Joint Commissioner of 40050-56550 1 1 0 Excise (Admin) 7 Deputy Commissioner of Excise 40050-56550 34 14 20 8 Deputy Director of Statistics 36300-53850 1 1 0 9 Senior Accounts Officer 15600-39100 1 1 0 10 Senior Audit officer 15600-39100 1 0 1 11 Superintendent of Excise 28100-50100 77 45 32 12 Chief Chemist 28100-50100 1 0 1 13 Asst. Director of Statistics 22800-21600 1 1 0 14 Dy. Superintendent of Excise 21600-40050 105 78 27 15 Senior Chemist 21600-40050 1 1 0 16 Office Superintendent 20000-36300 29 28 1 17 Inspector of Excise 20000-36300 428 263 165 18 Asst. Accounts officer 9300-34800 5 4 1 19 Sub Inspector of Excise 16000-29600 621 135 486 20 First Division Assistant 14550-26700 233 195 38 21 Stenographer 14550-26700 51 23 28 22 Second Division Assistant 11600-21000 353 291 62 23 Typist 11600-21000 35 15 20 24 Head Guards 12500-24000 345 244 101 25 Excise Guards 11600-21000 2344 1380 964 26 Senior Drivers 14550-26700 83 75 8 27 Drivers 11600-21000 358 76 282 28 Group - D workers 9600-14550 76 66 10 TOTAL 5197 2942 2255 9

5.2 Statement showing the vacancy position and retirements during 2013-14 5.2.1 Group A & B Group-A Sanctioned Working Vacant (+) or (-) Retirements during the year 2013-14 122 65 57 (-)57 14 Group-B Sanctioned Working Vacant (+) or (-) Retirements during the year 2013-14 106 79 27 (-)27 02 5.2.2 Group C & D Sl. No. Designation Sanctioned posts Working posts Vacant posts Retirements during calendar year 2014 1 Inspector of Excise 428 263 165 05 2 Sub Inspector of Excise 621 135 486 03 3 Office Superintendent 29 28 01-4 First Division Asst. 233 195 38 02 5 Stenographer 51 23 28-6 Second Division Asst. 353 291 62-7 Typist 35 15 20-8 Excise Head Guard 345 244 101 15 9 Excise Guard 2344 1380 964 40 10 Senior Driver 83 75 8 02 11 Drivers 358 76 282 03 12 Group D 76 66 10 01 10

5.3 Group wise and sex wise number of officers/ officials : 5.3.1 Group- A & B Group-A No.of officers belonging to SC/ST Total Male Female Total SC ST 53 10 63 06 02 08 Group-B No.of officers belonging to SC/ST Total Male Female Total SC ST 64 15 79 18 05 23 5.3.2 Group-C and Group-D : Sl.No. Designation Sanctioned post Working strength 1. Inspector of Excise 428 263 187 76 2. Sub Inspector of Excise 619 135 107 28 3. Office Superintendent 29 28 15 13 4. First Division Asst. 233 195 152 43 5. Stenographer 51 23 09 14 6. Second Division Asst. 353 291 212 79 7. Typist 35 15 08 07 8. Excise Head Guard 345 244 243 01 9. Excise Guard 2344 1380 1309 71 10. Senior Driver 83 75 75-11. Driver 358 76 71 5 Male Female SC ST 655 189 12. Group D 76 66 29 37 20 05 5.4 RECRUITMENTS : 5.4.1. Deputy Superintendents of Excise : Six posts of Deputy Superintendent of Excise have been notified in the year 2012. A proposal for direct recruitment of four Deputy Superintendent of Excise is submitted to Government for financial concurrence. 11

5.4.2. Excise Sub Inspectors : Notification has been issued by KPSC for filling up of 200 posts of Sub Inspector of Excise. Written examination is over and selection list is to be published. A proposal for Direct recruitment of 216 posts of Excise Sub Inspector is submitted to government for financial concurrence. 5.4.3. Excise Guards : Notification has been issued by KPSC for filling 350 posts of Excise Guards. Written examination is over and selection list is to be published. A proposal for direct recruitment of 373 posts of Guards is submitted to Government for financial concurrence. 5.4.4 Drivers : Government have accorded permission for recruitment of 100 Drivers for filling up of vacant posts in different offices of the department. The recruitment process is in progress. A proposal for direct recruitment of 183 posts of Drivers is submitted to government for financial concurrence. 5.5 TRAINING : Sl. Training Subject No. of officers deputed. No. 1. Police training for Deputy Superintendents of 37 Excise and Inspectors of Excise 2. Stress Management 40 3. Sakala 95 4. Right to Information Act-2005 20 5. KTPP Act and Government process 05 Re-engineering 6. NDPS, M & TP and Crime etc. 240 7. Management Development 01 Total 438 12

5.6 Filling up of posts on outsourcing basis : Stenographers and Typists : The Government has given approval to fill up vacant posts of Stenographers and Typists on outsourcing basis Vide Govt. letter No: FD /148/EPS/2010 dated: 06-12-2010. 5 typists have been taken on outsourcing basis in the Excise Commissioner s office. 5.7 AWARDS/ MEDALS : - Nil - 5.8 Inspection of Subordinate Offices : 5.8.1 Inspections conducted by DCs of Excise Sl.No. Designation 1. Deputy Commissioner of Excise, Tumkur Dist. 2. Joint Commissioner of Excise, (E&I), Mangalore Division 3. Joint Commissioner of Excise, (E&I), Mangalore Division 4. Deputy Commissioner of Excise, Bangalore(North) 5. Deputy Commissioner of Excise, Bangalore(North) 6. Deputy Commissioner of Excise, Uttara Kannada 7. Deputy Commissioner of Excise, Bangalore(North) 8. Deputy Commissioner of Excise, Bangalore(East) Offices Inspected Gubbi Range Kunigal Range Tumkur Range O/o Deputy Commissioner of Excise, U.K.Dist. O/o Deputy Commissioner of Excise, Kodagu Dist. Nandini Layout Range Platform KSBCL Depot Nandini Layout Range J.P. Distillery Karwar Range Vorion Distillery, dated: 21-01-2013. Rajmahal Vilas Range, dated: 14-02-2014. 5.8.2 Inspections conducted by the Officers and staff of Excise Commissioner s Office Sl.No. Designation Offices Inspected 1. Joint Commissioner of Excise (D&B), Bangalore M/s Radico Ltd., Lessee of Yezdi Distilleries, Mysore. 13

6.1 INTERNAL AUDIT REPORT : CHAPTER 6 6.1.1 Number of offices audited by the Internal Audit Wing. Office/ Establishment Number Deputy Commissioner Offices 01 Range Offices 03 Sub-Divisions Offices 01 Total 05 6.1.2 Number of Audit Paras Raised. Officers Paras Money Value Non-Money Value DCE Offices 3-3 Sub-Divisions - - - Ranges 3-3 6.1.3 Number of Audit Paras Cleared. Officers Paras Money Value (Rs. in lakhs) Non-Money Value (Rs. in lakhs) Distilleries 4 2.62 - DCE Offices 2 0.30 - Sub-Divisions - - - Ranges 9 3.00 - Total 1 5.92-6.2 Number of LA & LC Questions received/ answered Session Starred Un starred Received Replied Received Replied Legislative Assembly 0 0 102 102 Legislative Council 7 7 40 40 6.3 Cases admitted in Karnataka Administrative Tribunal(KAT) Opening balance 214 Cases filed 56 Total 280 Cases disposed of 22 Balance (as on 31.04.2013) 258 14

6.4 IMPLEMENTATION OF RTI ACT : Number of applications received, replied, rejected and number of responses pending in appeal under the RTI Act from 01.04.2013 to 31.03.2014. SI.No Details Total 1. Opening Balance 218 2. Total Received Application during the Year 5231 3. Total Applications 5449 4. Total No of Disposed of During the Year 5221 5. Pending Applications at the end of the Year 228 6. prescribed Fees Pending from Applicants 42 7. No of request were Applicants were denied Access to 13 Information Along with Section of RTI Act Rule 8(1) (H) and Rule under 14 8. No. of Application Pending at RTI Court 00 6.5 Cases admitted in Karnataka High Court (Writ petitions) Opening balance 56 Cases filed 180 Total 236 Cases disposed of 193 Balance (as on 31.03.2014) 43 6.6 Cases admitted in Excise Commissioner s Court Opening balance 132 Cases filed 174 Total 306 Cases disposed of 209 Balance (as on 31.03.2014) 97 Excise Commissioner. 15