In Brief

The Supreme Court allowed the State of Uttar Pradesh's appeal against a High Court order that had quashed a demand for excise duty on Indian Made Foreign Liquor destroyed in a fire at a distillery. The Court held that excise duty is levied upon manufacture of liquor, not at the point of sale, making the liquor immediately liable for duty once distilled and bottled. Finding that the fire resulted from negligent failure to maintain proper electrical safety (inadequate earthing and fire-proof installations) rather than an unavoidable act of God, the Court concluded the distillery was liable to compensate for lost revenue. The distillery's receipt of insurance compensation for the value of goods and failure to insure against excise duty further demonstrated negligence. The demand for Rs. 6.39 crore in excise duty was upheld.

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