"http://JUDIS.NIC.IN \nSUPREME COURT OF INDIA\nPage 1 of 3 \nCASE NO.:\nAppeal (civil) 486 of 1998\nPETITIONER:\nARISTOCRAT AGENCIES, HYDERABAD ETC.\nRESPONDENT:\nEXCISE SUPERINTENDENT, HYDERABAD AND ORS. ETC.\nDATE OF JUDGMENT: 07/12/2000\nBENCH:\nDR. A.S. ANAND CJ & R.C. LAHOTI & SHIVARAJ V. PATIL\nJUDGMENT:\nJUDGMENT\n2000 Supp(5) SCR 469\nThe Judgment of the Court was delivered Civil Appeal No. 486 of 1998.\nThe short question which requires our consideration is whether\ncountervailing duty is chargeable at the rate prevailing on the date of\nissue of permit or on the date of actual import of liquor into the State?\nBrief facts necessary to answer the question may be noticed:\nThe appellants are holders of distributor licence in Form F.L. 47 issued\nunder Andhra Pradesh Foreign Liquor and Indian Liquor Rules, 1970\n(hereinafter ’the Rules’). They held four permits and acquired them under\nthe Rules on payment of countervailing duty, as was prevailing on the date\nwhen the permits were granted. First import permit was granted to the\nappellant on 31st January, 1991 and 2nd, 3rd and 4th permits were granted\non 6th February 1991. However, before consignment of liquor was actually\nimported on the strength of those permits, notification (G.O.Ms. 96) dated\n8th February, 1991 was issued. The notification was published in the\nOfficial Gazette on 9th February, 1991. By this notification, issued in\nexercise of the powers conferred by Section 21 of the Andhra Pradesh Excise\nAct, 1968 (hereinafter ’the Act’), the Governor of Andhra Pradesh amended\nan earlier notification dated 30th September, 1968 and enhanced the rate of\ncountervailing duty from Rs. 45 per litre of the strength of proof spirit\nto Rs. 70 per litre of the strength of proof spirit.\nThe appellants imported consignments of liquor under the first permit on\n27th February, 1991 and on the basis of the second permit on 28th February,\n1991. Consignment of liquor was imported on the basis of the 3rd and the\n4th permit on 18th February, 1991. All these imports were effected during\nthe validity of the permit, i.e., within 30 days from the date of issue of\npermit. The Office of the Excise Superintendent, Hyderabad informed the\nappellant that since there had been enhancement of countervailing duty, by\nnotification dated 8.2.1991 (published on 9.2.1991) from Rs. 45 to Rs. 70,\nthe appellants were required to pay differential of the countervailing duty\nbetween the duty already paid by them and the enhanced countervailing duty,\nwithin a period of seven days from the date of receipt of the notice. The\nappellant questioned the validity of the demand by filing a writ petition\nin the Andhra Pradesh High Court. A Bench of the High Court, by a common\njudgment and order dated 8th November, 1991 dismissed the batch of cases\nincluding the writ petition filed by the appellant. Aggrieved, the\nappellant is before us.\nThe argument raised in the High Court on behalf of the appellant was that\nsince countervailing duty had already been paid at the time of grant of the\nimport permit on the basis of the rate of the duty in force at that time,\nenhancement effected through notification dated 8.2.1991 could have no\napplication to the imports of liquor made by the appellant within the\n\nhttp://JUDIS.NIC.IN \nSUPREME COURT OF INDIA\nPage 2 of 3 \nperiod of validity of the period of permit [of 30 days], even if imports\nwere made after enhanced duty came into effect by virtue of the impugned\nnotification. The argument did not find favour with the High Court and in\ncur opinion, rightly.\nSection 21 of the Act is the charging section relating to excise duty or\ncountervailing duty on excisable articles. It provides as under :\n\"21. Excise duty or countervailing duty on excisable articles: (1) The\nGovernment may, by notification, levy an excise duty on any excisable\narticles manufactured or produced in the State [................] at such\nrates not exceeding the rates mentioned in the Schedule, as may be\nspecified in the notification.\n(2) The Government may, by notification, levy a countervailing duty on any\nexcisable article manufactured or produced elsewhere in\nIndia and imported into the State [.............] at such rate as may be\nspecified in the notification, which may not exceed the rates of excise\nduty on similar excisable articles levied under sub-section (1).\n(3) Different rates may be specified in sub-sections (1) and (2) for\ndifferent kinds of excisable articles and different modes of levying duties\nunder section 22.\"\nThe Schedule referred to in sub-section (I) of Section 21 of the Act\n(supra) provides for maximum rates of excise duty on different intoxicants.\nSub-section (2) of Section 21 of the Act unmistakably empowers the State\nGovernment, by notification, to levy countervailing duty on any excisable\narticle manufacture or produced elsewhere in India and imported into the\nState at such rate as may be specified in the notification and different\nrates may be specified for different kinds of excisable articles. Both\nexcise duty and countervailing duty are required to be assessed and\ncollected as soon as the taxable event arises. Excise duty being\nessentially a duty on production or manufacture of excisable goods, the\nevent attracting tax is the manufacture or production of the excisable\ngoods. Countervailing duty, on the other hand, s required to be levied,\nassessed and collected when excisable articles are imported into the State.\nThe object of levy and collection of countervailing duty is to counter-\nbalance excise duty, which is leviable on similar goods, if manufactured\nwithin the State. By its very nature and concept countervailing duty\nbecomes leviable on the date of the import itself and is governed by rate\nof duty as in force on the date of import. It is irrelevant that at the\ntime of obtaining a permit, the assessee also pays countervailing duty. In\ncase the rate of duty continues to be the same as on the date of import,\ni.e., entry into the State of the excisable goods, no extra countervailing\nduty is payable but if the rate of duty is enhanced, it is the enhanced\nduty which becomes payable. Of course, under Rule 10 (6) of the Rules,\ncountervailing duty and the import fee once paid ’shall not be refunded in\nany case’.\nIn S.K. Pattanaik (Dead) Through L.Rs. v. State of Orissa and Ors., [2000]\n1 SCC 413, a three-judge Bench of the Court noticed difference between\nconcept of excise duty and countervailing duty in the following terms :\n\"Excise duty\" and \"countervailing duty\" are well-known concepts and are\nattracted in different situations. \"Excise duty\" is essentially a duty on\nmanufacture of goods, and the taxable event is the manufacture of the\nexcisable goods. \"Countervailing duty\", on the other hand, is imposed when\nexcisable articles are imported into the State, in order to counterbalance\nthe excise duty, which is leviable on similar goods if manufactured within\nthe State. So far as countervailing duty is concerned, the incidence of the\nimpost is on the import of the excisable articles, i.e., at the time of\nentry into the State. \"\n\nhttp://JUDIS.NIC.IN \nSUPREME COURT OF INDIA\nPage 3 of 3 \nThe Court, then went on to consider the meaning of the expression \"levy\"\nand \"collection\" and opined:\n\"While the expression \"levy\" may include both the process of taxation as\nwell as the determination of the amount of tax or duty, the expression\n\"collection\" refers to actual collection of the payable duty or the tax, as\nthe case may be. Since the taxable event for attracting excise duty or\ncountervailing duty is the manufacture or import of excisable goods into\nthe State, the charge of incidence of duty stands attracted as soon as the\ntaxable event takes place and the facility of postponement of collection of\nduty under the Act or the rules framed thereunder, can in no way affect the\nincidence of duty on the imported goods. \"\n(Emphasis supplied)\nIn our opinion, the demand of differential amount of countervailing duty\nfrom the appellant, under the circumstances, was perfectly justified since\ndemand was made on the basis of the duty as in force on the date of import\nof the consignment into the State. The duty was to be assessed and\ncollected as in force at the time of import.\nThus, our answer to the question, posed in earlier part of the judgment, is\nthat the countervailing duty is chargeable at the rate prevailing on the\ndate of actual import of the consignment into the State irrespective of the\nduty as in force at the time of obtaining the permit.\nThe High Court, under the circumstances, rightly dismissed the writ\npetition, filed by the appellant.\nWe find no merit in this appeal which, accordingly, fails and is dismissed.\nThere will, however, be no order as to costs.\nCivil Appeal Nos. 482-483 of 1998.\nLearned counsel for the parties agree that the judgment rendered by us in\nCivil Appeal No. 486 of 1998, decided above, applies to this case also as\nthese appeals also arise out of common judgment dealt by us in that case.\nFor the reasons stated in C.A. No. 486 of 1998, these appeals also fail and\nare dismissed but with no order as to costs.\n"