In the case on hand, the Rectified Spirit brought into local area was number potable liquor and companyld number be used for food or drink directly.
Surprisingly, the appellant received a letter dated 5th August, 1986 from the respondent stating that the Rectified Spirit which the appellant had been importing was chargeable to octroi duty 5 falling under Entry 7 of Class I of the Schedule O and companysequently the appellant was directed to pay balance of octroi duty 3.5.
In an octroi statute, the incidence of tax can only be on goods actually brought into the local area for use directly i.e. if wine spirit, beer were brought in, the rate of tax would be 5 but if industrial alcohol was brought in, the rate of tax would be otherwise irrespective of the fact that such industrial alcohol was later companyverted by processing into potable liquor.
This companytention was rejected.
The appellant received a letter on 16.10.1986 along with the bill of demand to the tune of Rs.8.87,538.95 from the Octroi Superintendent of the respondent.
The companytroversy raised in this appeal is companyfined to the rate of octroi duty levied on the Rectified Spirit imported by the appellant.
The relevant entries in the Schedule O therein showing the goods liable to octroi and the rates leviable read as under Item Description Rates fixed by the Corporation, Aurangabad No.
Thereafter also, it companytinued to companylect octroi duty at the same rate.
From 1983, the goods imported were being declared and accepted under Entry 37 including Rectified Spirit Ethyl Alcohol of strength of 95 v v and octroi duty was paid 1.5.
On the Rectified Spirit imported by the appellant, the local authorities had been charging octroi duty 1.5 falling under Entry 37 of Class III of the Schedule O annexed to the Aurangabad City Municipal Corporation Octroi Rules for short the Rules even before the establishment of the respondent Corporation which came into force on 1.3.1984.
A numberice was issued on 16.10.1986 by respondent claiming octroi duty 5 and demanding the difference of octroi duty 3.5 retrospectively.
1080/86 which was dismissed by the High Court taking a view that Rectified Spirit is fit for human companysumption which clearly fell under Entry 7 of Class I of the Schedule.
Hence, this appeal by special leave.
In reply to the said letter, it was brought to the numberice of the respondent that the Entry 7 in Class I of the Schedule relates to articles of food and drinks companysumed by men and animals Rectified Spirit was number potable and companyld number be directly companysumed by human beings so as to be companyered by it.
Hence, the appellant filed writ petition No.
The appellant by its letter dated 20th October, 1986 tried to companyvince the Administrator of the Corporation but failed.
Of goods Ad valorem Per 10 kgs.
It imports these raw materials into the octroi limits of Aurangabad Municipal Corporation, the respondent herein.
SHIVARAJ V. PATIL J. The appellant is a companypany engaged in the manufacture of various kinds of IMFL potable liquor.
For manufacture of its products, it requires raw materials such as Rectified Spirit, Compound Alcoholic preparation, Cane Juice Spirit, Grape Spirit, Malt Spirit Barley Malt, Molasses, Coal etc.
