In exercise of the powers conferred by Section 71 of the Karnataka
Excise Act, 1965 (Karnataka Act No. 21 of 1966), read with Sections 13 and 16
of the said Act, the Government of Karnataka hereby makes the following rules,
the draft of the same having been previously published, as required by
sub-section (1) of Section 71 of the said Act, in Notification GSR No. 405 in
Part IV, Section 2C(i) of the Karnataka Gazette, Extraordinary, dated 13th
September 1967, namely.-- (1)
These rules
may be called the Karnataka Excise (Distillery and Warehouse) Rules, 1967. (2)
They shall
extend to the areas of the State of Karnataka where the Act is in force. (3)
They shall
come into force at once. In these rules, unless there is anything repugnant in the subject or
context: (a)
"Act"
means, the Karnataka Excise Act, 1965. (b)
"Commissioner"
means, the Excise Commissioner in Karnataka. (c)
"Deputy Commissioner"
means, the Deputy Commissioner of the district in which the distillery is
located. (d)
"Distiller"
means a person to whom a distillery licence is granted. (e)
"Distillery
Officer" means an Excise Officer in charge of a distillery, (f)
"Form"
means a form appended to these rules. (g)
"Government"
means the Government of Karnataka. (h)
"Licence"
means a licence granted under the Act or Rules. (i)
"Licensee"
means a person to whom a licence is granted. (j)
"receiver"
means a vessel into which the spirit discharges directly from a still. (k)
"Section"
means a section of the Act. (l)
"to
gauge" means to determine the quantity of spirits contained in or taken
from any cask or receptacle or to determine the capacity of any cask or
receptacle. (m)
"to
prove" means to test the strength of spirits by a hydrometer or other
instrument. [2] [(n) "Warehouse" means, a place where storage of spirit is
permitted under a warehouse licence and includes that part of distillery where
storage of spirit is permitted.] (o) ?"Wash
back" means, any vessel used for preparation of wash and formation. [3] [(p) "London Proof Spirit" means a compound of Ethyl Alcohol
and distilled water which at the temperature of 51 degree Fahrenheit weigh
exactly 12/13th parts of an equal measure of distilled water at the same
temperature. [4] [(1) Every person who wishes to obtain a licence to establish and work
a Distillery shall make an application in Form 1 to the Commissioner through
the Deputy Commissioner of the district in which he wishes to establish a
distillery furnishing in duplicate full description of the premises, plan of
the building wherein he proposes to locate the distillery together with a
description of the stills and all other apparatus and a treasury challan for
having credited the fee prescribed in Rule 7.] [5] [(2) On receipt of the application, the Deputy Commissioner or any
other Officer authorised by him in that behalf shall check, verify and certify
to the correctness of the facts stated therein and forward it to the
Commissioner, retaining a copy for his office records. (3) ?The
Commissioner may, either by himself or through any officer authorised by him in
this behalf make such further verification as he considers necessary. (4)? ?No alteration or addition [6] [shall]
be made in or to the building in which the distillery is established or in or
to the stills or other permanent apparatus used therein, without the permission
of the Deputy Commissioner.] [7] (1) Any distiller who desires to obtain a licence for establishment of
a warehouse for storage of spirit with or without payment of excise duty, shall
make an application in Form-IA to the Commissioner through the Deputy
Commissioner of the District, where he proposed to establish a warehouse along
with a treasury challan for having paid the prescribed licence fee. (2) ??On
receipt of the application under sub-rule (1), the Deputy Commissioner or any
other officer authorised by him in that behalf shall verify and certify the
correctness of the facts stated therein and forward it to the Commissioner
after retaining a copy thereof. (3) ?The
Commissioner may, either by himself or through any officer authorised by him in
this behalf, make such further verification as he deems it necessary. (4) ??No
alteration or addition shall be made to the warehouse building without the
prior permission of the Deputy Commissioner. (5) ??On
receipt of the application under sub-rule (1) and after such verification, the
Commissioner may grant with the previous sanction of the State Government a
licence in Form-2A subject to these rules and the conditions specified in the
licence: Provided that no such licence shall be required for storage of spirit in
a warehouse situated within the premises of a distillery. (6) ??The fee
for grant or renewal of warehouse licence shall be rupees ten thousand per
year. (7) ??A
licence may be renewed on an application being made to the Commissioner
accompanied by the prescribed licence fee. Every such application shall be made
one month before the expiry of the period of licence: Provided that the Commissioner may consider such application after the
period specified above, if he is satisfied that the applicant had sufficient
cause for not making the application within the specified period. (8) ??The
provisions of Rules 12, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27,
28, 29, 30, 31, 33 and 34 shall mutatis mutandis shall apply to the licence
granted under this rule.] On receipt of the application under Rule 3 and after such verification
referred to therein, the Commissioner may grant, with the previous sanction of
the State Government, a licence in Form 2 subject to these rules and the
conditions of the licence. [9] [A licence granted or renewed under these rules shall expire on the
last day of June next following.] A licence may be renewed on application being made to the Commissioner
accompanied by the licence fee prescribed in Rule 7:-- Provided that every such application shall be made at least one month
before the expiry of the licence already granted. [10] [Provided further that the Commissioner may accept and consider any
such application made after the aforesaid period of one month if he is
satisfied that the applicant had sufficient cause for not making the
application within that period.] [11][12] (1) Fee for grant or renewal of a licence under these rules shall be.-- (i)
[13][rupees twenty-two lakhs fifty thousand] in the case of distilleries
which distill spirit out of molasses; (ii)
[14] [rupees seventeen lakhs fifty thousand] in the case of distilleries
which distill spirit out of tapioca/sweet potato; (iii)
[15] [rupees six lakhs] in tire case of distilleries which distill spirit
out of toddy, cashew, pine-apple and apple and use such spirit for manufacture
of Indian Liquor; (iv)
[16] [rupees one lakh fifty thousand] in the case of distilleries which
distill spirit out of grapes or malt and also use such spirit; (v)
[17] [rupees thirty lakhs] in the case of distilleries which use spirit
distilled out of molasses, tapioca, sweet potato, grapes or malt, for
manufacture of Indian Liquor.] [18] (2) ??x x x x x.] [19] [In respect of a licence granted under these rules an additional
licence Ifee equivalent to fifteen per cent of the licence fee levied in
respect of each land of distillery licence under Rule 7, shall be levied for a
period of [20]
[four years] with effect from First day of July, 1998 for the purpose of equity
investment in the Karnataka Infrastructure Development and Finance
Corporation.] Every Distiller shall so arrange the still that the distillate shall
discharge into closed and locked receivers provided by him and approved by the Commissioner.
He shall provide at his cost suitable and secure locks to all stills, spirit
receivers, fermentation room and doors. The keys of the locks shall be
deposited with the Distillery Officer. The Distiller may, if he so wishes,
attach his own locks, but he shall remove them whenever requisitioned by the
Distillery Officer or any other competent Officer authorised by the
Commissioner in this behalf. The Distiller shall, if the Commissioner so directs, provide either a
glass safe between the still and spirit receiver to note the quality and
strength of the spirit running through at any moment or a sampling apparatus so
constructed that for every sample drawn off an exactly equal quantity shall be
discharged in a closed and locked receptacle. The distiller shall provide
branch pipes fitted with cocks which may be diverted to separate receivers for
spirits of different strengths and qualities. The distiller shall arrange his spirit receivers and store vats in such
a way that the spirit may be conveyed to the store vats through closed pipes by
gravitation or where this is not possible, an arrangement to pump up through
closed pipes shall be made. No wash shall be prepared except within the distillery nor shall any vat
be removed from the distillery on any account. All wash shall be kept securely
well locked up in such places as may be approved by the Deputy Commissioner.
The distiller shall see that the saccharine materials used are thoroughly
dissolved when the wash is set up by him and he shall submit a declaration in
writing to the Deputy Commissioner and to the Distillery Officer giving the
actual saccharomatric gravity corrected for temperature before fermentation
starts, and the total quantity of wash made and he shall furnish generally with
all the information, which the Deputy Commissioner may require, bearing on the
question of levying a charge from attenuation of wash. All the vessels in the distillery whether used as wash back, water vat
or spirit vat shall be so arranged as to permit the accurate gauging or
measuring of their contents and shall be fitted to the satisfaction of the
Deputy Commissioner with proper dipping rods so adjusted to fix dipping
places that the contents may be ascertained at any time. These vessels shall be
gauged as the Deputy Commissioner directs from time to time, and no vessel be
used as wash back, water vat or spirit vat until it has been properly gauged
and the gauging checked by the Deputy Commissioner or any person authorised by
him. The Distiller shall give the Commissioner not less than fifteen days notice
in writing of the date on which he proposes to begin the distillation. The Commissioner may employ at the distillery, such number of Excise
Officers as may be necessary, for supervision and securing compliance with the
provisions of the Act and these rules. The cost of the establishment including
pay, leave salary, contributory provident-cum-pension fund and pensionary
contribution in respect of such officers shall be paid by the distiller in
advance [21]
[from time to time in annual, half-yearly or quarterly instalments.] The Deputy Commissioner, with the previous sanction of the Commissioner,
shall regulate the timings of the working of the distillery which the
Distillery Officer and his staff are required to attend, which shall not exceed
8 hours a day and also the holidays exclusive of Sundays. The Excise Staff
deputed at distillery shall not ordinarily attend the distillery on Sundays and
other authorised holidays. If the distiller wants the said staff to work beyond
the hours fixed on working days and on Sundays or authorised holidays he shall
make a requisition to the Distillery Officer in advance and he shall also be
liable to pay overtime fees. Every fraction of an hour not less than fifteen
minutes shall be treated as one hour and the remuneration shall be double the
usual emoluments. If the staff is required to work during the night hours the
remuneration will be four times the usual emoluments. No spirit shall be received into distillery unless they are accompanied
by the permits issued by the Deputy Commissioner. All such spirits shall be
gauged and proved on their arrival in the presence of the distiller or his
representative, who will be responsible for the quantity and strength of the
spirits received and stored in the warehouse, which are under the joint lock
and key of the Distillery Officer and the Distiller. The Commissioner shall post such staff at the Distillery as he deems
fit. The distiller shall provide necessary office furniture for the use of the
staff. The distiller shall also provide the staff so deputed with the quarters
properly furnished, and maintained, without interference in their use or
enjoyment thereof. If the distiller is unable to provide such quarters, the
Commissioner may obtain through the Deputy Commissioner accommodation on
rent and the distiller shall be liable to all the cost and expenses therefor. The Government shall not be responsible for the destruction or loss or
damage to any spirit stored in a distillery by fire or theft or by gauging or
proving or by any other cause whatever. In case of fire or other accident the
Distillery Officer shall immediately attend and open it, if necessary, at any
hour by day or night. The materials used in the distillery shall be of good quality and no
ingredient harmful or noxious to health shall be used in distillation or in the
spirits stored therein: Provided that approved denatures may be stored for denaturation in
special receptacles or vats. The distillery shall be under the direct supervision of the Distillery
Officer who shall be subordinate to the Deputy Commissioner and carry out all
the provisions of these rules either in person or through his subordinates as
the Deputy Commissioner may from time to time direct. No person other than the licensee or his authorised vendors or agents or
employees of the Distillery shall be allowed to enter the distillery premises
without the permission of the Distillery Officer. A list of such employees of
the distillery shall be furnished to the Distillery Officer by the distiller. All persons entering the distillery shall be under the orders of the
Distillery Officer in respect of their conduct and proceedings within the
distillery and shall be liable to search on their exit, at the discretion of
the Distillery Officer. If a distiller intends to use any permanent apparatus which is not
included in his original application he shall furnish an inventory of such
apparatus to the Distillery Officer not earlier than two clear working days
before using the same. (1)
The distiller
shall maintain regular accounts in the forms required by the Commissioner from
time to time and such accounts shall be open for inspection at all times, by
the Distillery Officer or any Officer duly authorised. (2)
Spirits in the
Distillery shall, at all times be open to gauging and proving by the Officers
referred to in sub-rule (1), An account shall be taken of the stocks of spirits kept in the
distillery at such intervals not exceeding three months and in such manner as
the Deputy Commissioner may direct. The distiller shall pay such duty on all
spirits which are not forthcoming and which could not be accounted for to the
satisfaction of the Deputy Commissioner, in excess of an allowance of one per
cent of wastage. The wastage shall be calculated at the end of every twelve
months or at the end of licence period, if it is shorter, for purpose of
calculating duty on the excess as aforesaid. Provided that if it is proved to the satisfaction of the Deputy
Commissioner or any officer appointed by him that any deficiency in excess of
the margin allowed could not have been prevented by the exercise of proper care
and precaution, the payment of duty on such deficiency may be waived. The distiller shall be bound to report immediately to the Distillery
Officer and the Deputy Commissioner any breaches committed by any person
employed by him in the manufacture, storage, receipt blending or issue of
spirits and he shall be bound to comply with the directions of the Deputy
Commissioner respecting the continued employment of such persons. No naked lights of any description shall be used within the distillery
by the distiller or his employees. The Distillery Officer may eject and exclude from the distillery
premises any person who has committed or is about to commit any breach of the
provisions of the Act or these rules or who is intoxicated, riotous or
disorderly. All such action taken by the Distillery Officer shall be recorded
in writing and communicated to the Deputy Commissioner forthwith. The distiller shall be bound by all additional general rules for the
management of the distillery or for issue of spirits therefrom, which may
hereafter be prescribed under the Act or under any law which may hereafter be
enacted and by all special orders issued by the Commissioner, with regard to
distillery and shall cause all persons employed by him to obey all such rules. (1)
Except
otherwise provided, an appeal shall lie. (a)
to the Deputy
Commissioner from any order passed or proceedings taken under these rules by
the Distillery Officer or any person authorised by the Deputy Commissioner, (b)
to the
Commissioner from any order passed or proceedings taken or an appellate order
passed by the Deputy Commissioner. (2)
Such appeals
shall be preferred in cases covered by clause (a) of sub-rule (1) within sixty
days and in cases covered by clause (b) within ninety days from the date of the
order or proceedings appealed against. The decision of the Commissioner shall
be final. (1)
The spirits
intended for issue as Denatured Spirit or Rectified Spirit shall not be
distilled at a strength lower than 52? over proof. (2)
The distiller
shall issue at the distillery to the Distillery Officer such quantities of
country spirits, rectified spirits and denatured spirits as may be indented for
by him for the supply: (a)
to such
Government Depots and warehouses as have been established or may from time to
time be established and maintained within the State; (b)
to such other
places or persons or institutions as may be directed by the Deputy Commissioner
or Commissioner; (3)
In case of
2(a) after the issues are made, payment shall be made by the Distillery Officer
on the instructions of the Commissioner to the Distiller, at such intervals as
the Commissioner may prescribe for the value of spirits supplied. In case of 2(b) the distiller shall himself recover the value of spirits
supplied from the person concerned. For issue of spirits of prescribed strength, the distiller may blend or
reduce the spirits to these strengths in such vats as may be approved by the
Commissioner for this purpose. Blended or reduced spirits shall be kept in
separate receptacles. No spirit shall be removed from the distillery until it has been gauged
and approved by the Distillery Officer. The gauging of the spirits may be made
by either actual measurements or by weighments. No spirits shall be removed from the distillery except under a permit in
Form 3 issued by the Distillery Officer. If a licensee or any person in his employment contravenes any of the
provisions of the Act or the rules made thereunder or the conditions of the
licence, the Commissioner may-- (1)
suspend the
licence for a period for which the licensee shall not be entitled to claim any
compensation. (2)
or cancel the
licence: Provided that before taking action the Commissioner shall give a
fortnight's notice to the Distiller in writing, stating the grounds on which it
is proposed to take action and requiring him to show cause against it. All rules corresponding to the foregoing rules framed under any
enactment repealed by Section 72 are hereby repealed: Provided that such repeal shall not effect.-- (a)
the previous
operation of the rules so repealed or anything duly done or suffered
thereunder, or (b)
any right,
privilege, obligation or liability acquired, accrued or incurred under any rule
so repealed, or (c)
any penalty,
forfeiture or punishment incurred in respect of any offence committed against
any rule so repealed, or (d)
any
investigation or legal proceeding or remedy in respect of any such right,
privilege, obligation, liability, penalty, forfeiture or punishment as
aforesaid, and any such investigation, legal proceeding or remedy may be
instituted, continued or enforced and any such penalty, forfeiture or
punishment may be imposed as if such rules had not been repealed; Provided further that subject to the preceding proviso anything done or
any action taken (including any appointment or delegation made, notification,
order, instructions or direction issued, form, certificate obtained, permit or
licence granted or registration effected under any such rules) shall be deemed
to have been done or taken under the corresponding provisions of these rules
and shall continue to be in force accordingly, unless and until superceded by
anything done or any action taken under the Act or these rules as the case may
be. [1] Published in the Karnataka Gazette, Extraordinary, dated
10-10-1967, vide Notification No. HD 42 EFL 67, dated 10-10-1967. [2] Clause (n) substituted by GSR 29, dated 3-2-1989, w.e.f. 4-2-1989. [3] Clause (p) inserted by GSR 33, dated 23-1-1976, w.e.f. 29-1-1976. [4] Substituted for sub-rules (1) and (2) by GSR 232, dated 25-6-1969,
w.e.f. 3-7-1969. [5] Sub-rules (3), (4) and (5) renumbered as sub-rules (2), (3) and (4)
respectively by GSR 232, dated 25-6-1969, w.e.f. 3-7-1979. [6] The word "shall" inserted by GSR 155, dated 27-4 1970,
w.e.f. 7-5-1970. [7] Rule 3-A inserted by GSR 29, dated 3-2-1989, w.e.f. 4-2-1989. [8] Rule 4A omitted by Notification No. FD 325 EDC 95(i), dated
13-2-1997, w.e.f. 13-2-1997. [9] Rule 5 substituted by GSR 53, dated 10-2-1971, w.e.f. 25-2-1971. [10] Second Proviso inserted by GSR 155, dated 27-4-1970, w.e.f.
7-5-1970. [11] Rule 7 substituted by GSR 53, dated 10-2-1971, w.e.f. 25-2-1971. [12] Sub-rule (1) substituted by Notification No. FD 10 PES 95(ii),
dated 31-5-1995, w.e.f. 1-7-1995. [13] Substituted for the words "rupees fifteen lakhs" by
Notification No. FD 10 PES 2000, dated 24-6-2000, w.e.f. 1-7-2000. [14] Substituted for the words "rupees fifteen lakhs" by
Notification No. FD 10 PES 2000, dated 24-6-2000, w.e.f. 1-7-2000. [15] Substituted for the words "rupees fifteen lakhs" by
Notification No. FD 10 PES 2000, dated 24-6-2000, w.e.f. 1-7-2000. [16] Substituted for the words "rupees fifteen lakhs" by
Notification No. FD 10 PES 2000, dated 24-6-2000, w.e.f. 1-7-2000. [17] Substituted for the words "rupees fifteen lakhs" by
Notification No. FD 10 PES 2000, dated 24-6-2000, w.e.f. 1-7-2000. [18] ?Sub-rule (2) omitted by
Notification No. FD 10 PES 2000, dated 24-6-2000, w.e.f. 1-7-2000. [19] ?Rule 7-A substituted by
Notification No. FD 7 PES 98(iv), dated 18-6-1998, w.e.f. 1-7-1998. [20] Substituted for the words "two years" by Notification No.
FD 10 PES 2000, dated 24-6-2000, w.e.f. 1-7-2000. [21] ?Inserted by GSR 147, dated
3/8-5-1979, w.e.f. 10-5-1979.[1]KARNATAKA EXCISE
(DISTILLERY AND WAREHOUSE) RULES, 1967
PREAMBLE