Pawan Kumar Singhi v. State Of Bihar — 1996 DIGILAW 709 (PAT)

Judgment D. R. Wadhwa, Aftab Alam, J. 1. During the years 1982-83 and 1983-84, the petitioners in this batch of six writ petitioners, holding licences under the Bihar Excise Act, 1915 , exported from this State large quantities of Indian made Foreign Liquor (imfe for short) on the basis of import permits purportedly issued by the excise authorities of different importing states. It later transpired that in most cases those import permits were fake and were not issued by the authorities of the importing State as shown in the bogus permits. It further came to light that none of the exported consignments were delivered at the authorised destinations in the importing States; and this was also true of the exports made against the few import permits which were not found to be fake. It was, thus, plain that large quantities of non-duty paid IMFL, following their removal from the Bonded Warehouses in this State were sold clandestinely either in this State or in some other states, thereby causing enormous loss of excise duty to this State. The excise authorities therefore, raised demands against the exporters, the petitioners in these writ petitions for payment if excise duty on the IMFL fraudulently shown to have been exported to other States on the basis of those import permits. The authorities invoked clause (2) of the bond (in Statutory Form No.158) executed by the petitioners, holding them liable to make good the loss of excise duty suffered by the State. These writ petitions have been filed assailing those demands raised against the petitioners by the excise authorities. In some of these cases the petitioners have come to this Court after moving the Board of revenue against the impugned demand; some writ petitioners, however, have approached this Court directly to challenge the demand of excise duty raised against them. 2. Before proceeding to examine the contending claims, we propose to briefly state the material facts of each case which, excepting some minor details, are similar in all material particulars. It may be noted at the outset that for the years 1982-83 and 1983-84 the petitioners had obtained licences (i) in statutory form No.1 for the sale of foreign Liquor to the Trade, that is to other licenced Dealers (hereinafter referred to as the Wholesale Licence)and (ii) in statutory form No. IA. It may be noted at the outset that for the years 1982-83 and 1983-84 the petitioners had obtained licences (i) in statutory form No.1 for the sale of foreign Liquor to the Trade, that is to other licenced Dealers (hereinafter referred to as the Wholesale Licence)and (ii) in statutory form No. IA. To deposit or keep Foreign Liquor Imported or Transported under Bond in a warehouse Established with The Approval of the Excise Commissioner (hereinafter referred to as the Bonded warehouse Licence ). Further, as required under clause 1 of the Bonded warehouse Licence (in Form No.1a)all the petitioners had also executed a general bond for Import, Export and transport of Excisable Articles without payment of Duty in form No.156. The bonds executed by the petitioners were subsisting along with their licences for the years in question. C. W. J. C. No.3710 of 1990 pawan Kr. Singhi V/s. State of Bihar 3. According to the petitioner, during the aforesaid period, import permit Nos.278 and 379, dated 29-10-1993 were issued by the Deputy Commissioner of Excise, Mahe, Pondicheri in favour of M/s. T Abraham and Co. Mahe, for importing 7938.00 L. P. Litres of IMFL. On production of the two import permits in the office of the Commissioner of Excise, Bihar, Patna export sanction was granted in respect of those import permits vide order No.304, dated 20-1-1984 passed by the Deputy commissioner of Excise (D. W ). On the basis of the export sanction, the Superintendent of Excise, dumka issued export passes with the endorsement, duty paid. The petitioner then prepared invoices and supplied the specified quantity of IMFL to the importer on payment of its cost price. The Officer incharge posted at the petitioners bonded Warehouse issued transport passes for exporting 7938.00 L. R Litres of IMFL. On the transport passes too, the Officer-in-charge made the entry that the excise duty on the consignment had been paid at the State Bank of india, Mahe. Thus following the due procedure, the specified quantity of imfl was removed from the petitioners Bonded Warehouse and was handed over to the importing party. 4. The petitioner then received a notice dated 14-6-1988 (copy at Annexure-1) issued by the Excise Commissioner, Bihar, Patna. Thus following the due procedure, the specified quantity of imfl was removed from the petitioners Bonded Warehouse and was handed over to the importing party. 4. The petitioner then received a notice dated 14-6-1988 (copy at Annexure-1) issued by the Excise Commissioner, Bihar, Patna. It was stated in the notice that the petitioner under his licence for the year 1983-84 had applied for export sanction producing import permit Nos.278 and 279, dated 29-10-1983 issued in favour of M/s. T. Abraham and Co. , Mahe, Pondicheri. Having obtained the export sanction the petitioner had shown export of 7938 L. P. Litres of IMFL against the two import permits. However, from the information received from the Pondicheri Government, it came to light that the quantity of IMFL shown to have been exported against those import permits had not reached its authorised destination at m/s. T. Abraham and Co. Mahe, Pondicheri. According to the terms of the general Bond, in case an excisable article was not delivered at its authorised place of destination, the licencee would be liable to pay the excise duty leviable on that article. The petitioner was accordingly directed to pay a sum of Rs.3,57,210.00 as excise duty on 7938 L. p. Litres of IMFL @ Rs.45/- per L. P. Litre. 5. The petitioner sought to challenge the demand raised by the Excise commissioner before the Board of revenue by filing a revision under Sec.8 of the Bihar Excise Act. The demand notice issued by the Commissioner was assailed on a number of grounds including the stock plea of violation of the principles of natural justice. However, the main ground to resist, the demand was that the exports were made on the basis of duty paid import permits issued by the excise authorities in this State had given the export sanction and had issued export passes and transport passes. In terms of the provisions of the Act, the Rules and the conditions of the licence, the petitioner was merely following the directions contained in the export passes and the transport passes and hence no liability could attach to him. It was further stated that the General bond never came into play as the exports were made on the basis of duty paid import permit and therefore no demand could be raised by invoking the conditions of the General Bond. It was further stated that the General bond never came into play as the exports were made on the basis of duty paid import permit and therefore no demand could be raised by invoking the conditions of the General Bond. The Member, Board of Revenue by Resolution, dated 14-5-1990 (Copy at Annexure-2) rejected the revision filed by the petitioner. The decision of the Board of Revenue is also primarily based on condition No.8 of the General Bond executed by the petitioner in Form No.158. C. W. J. C. No.5461 of 1989 umapati Poddar V/s. State of Bihar 6. The petitioner in this case too purported to have made export of 7992 l. P. Litres of IMFL against import permit Nos.24 and 28, dated 30-6-1983 issued by the excise authorities at pondicheri in favour of M/s. T. Sadanand, Mahe, Pondicheri. A similar demand notice as coming under challenge in CWJC No.3710/90 was issued to this petitioner too by the Excise commissioner on 14-6-1990. In this notice a demand of Rs.3,59,640/- has been made as excise duty on 7992 L. P. Litres of IMFL @ Rs.45/- per litre. 7. The petitioner in this case has come directly to this Court without moving the Board of Revenue against the demand notice issued by the Commissioner. In fact in the main writ petition it was stated that the demand notice issued by the Commissioner had not been served upon the petitioner and what came under challenge in the writ petition were certain demands made by the Supdt. of Excise, Monghyr on the basis of the Commissioners demand notice. The demand notice, however, was brought on the record as Annexure-4a along with a supplementary affidavit filed in this case. In the counter affidavit filed on behalf of the respondents, the demand was justified, as in the earlier case, on the basis of the terms and conditions of the General Bond executed by the petitioner in Form No.158. The petitioner in his reply to the counter affidavit denied having executed any bond but in the supplementary counter affidavit filed on behalf of the respondents a photo-state copy of the General bond executed by the petitioner has been enclosed as Annexure-B. C. WJ. C. No.1187 and 1203 of 1990 ram Gopal Agarwal V/s. State of Bihar and ors. 8. The petitioner in his reply to the counter affidavit denied having executed any bond but in the supplementary counter affidavit filed on behalf of the respondents a photo-state copy of the General bond executed by the petitioner has been enclosed as Annexure-B. C. WJ. C. No.1187 and 1203 of 1990 ram Gopal Agarwal V/s. State of Bihar and ors. 8. These two writ petitions have been filed by the same person; one writ petition (CWJC No.1187/90) relates to exports shown to have made against import permits issued from Rajasthan while the other writ petition (CWJC no.1203/90) relates to export shown to have been made against import permits issued from Meghalaya. During the year 1983-84, this petitioner too purportedly made an export of 16200 L. P. Litres of IMFL against import permits issued by the Dist. Excise Officer, udaipur, Rajasthan in favour of M/s. Sahara Wines Agency, Chittorgarh (CWJC No.1187/90 ). In addition to this, the petitioner made further export of 121150 L. P. Litres of IMFL against import permits issued by the Dy. Commissioner of Excise, Meghalaya, Shilong in favour of M/s. Tura Bonded Ware house, Tura, West Garo Hills, meghalaya (CWJC No.1203/90 ). The other procedural details were routine and exactly similar to those relating to the other cases, as stated above. On the basis of the import permits, requisite export sanctions were obtained from the office of the Excise Commissioner, bihar, Patna following which export passes and transport passes were issued by the concerned excise authorities. The material details in this regard are furnished in paras 17 to 26 of each of the two writ petitions and para 5 of the counter affidavit filed in each of these two cases. These two writ petitions however, are different from the earlier two cases in that in these two cases copies of the transport passes, bearing the signatures of the Officer in-charge at the specified places of destination (at Rajasthan and Meghalaya respectively), in proof of the consignments having been delivered there, were received back and were produced by the petitioner before the concerned excise authorities in its state. Thus, in so far as these two cases are concerned, there was no missing link of papers and at least on the record, it was shown that the consignments had been duly delivered at their respective destinations. Thus, in so far as these two cases are concerned, there was no missing link of papers and at least on the record, it was shown that the consignments had been duly delivered at their respective destinations. It later transpired that the import permits on the basis of which the purported exports were made to rajasthan and Meghalaya respectively, were bogus and fake and those import permits were not issued by the Dist. Excise officer, Udaipur, Rajasthan or the deputy Commissioner of Excise, meghalaya. The import permits being fake and bogus it necessarily followed that the receipts showing delivery of the consignments in the Bonded warehouses at Rajasthan and meghalaya were equally fake and forged and, in fact, no exports, as shown in the records, were made. The Commissioner of Excise accordingly issued demand notices for a sum of Rs.5,29,000/- as excise duty on the quantity of IMP shown to have been exported to Raja than and a sum of Rs.5,46,750/- as excise duty on the quantity of IMFL shown to have been exported to meghalaya. Having unsuccessfully challenged the demands raised by the Commissioner before the Board of Revenue, the petitioner filed these two writ petitions before this Court assailing the two demand notices. 9. The writ petition, however, did not state one important fact that challenging the same two demands the petitioner had filed TS. No.27/1989 in the Court of Subordinate Judge VII, muzaffarpur. This fact was stated in the counter affidavit filed in this case on behalf of respondents 4 and 5 and according to the counter affidavit the suit was lying undisposed of at the time of the filing of the counter affidavit. In his reply to the counter affidavit, the petitioner admitted this fact in the following words: "the petitioner states that it is true that the petitioner filed IS. No.27/1989 in the Court of Sub-Judge VII, Muzaffarpur which is pending adjudication. " 10. It may be noted that even in the reply affidavit it was not stated that the suit had been withdrawn after filing/admission of the writ petitions before this court. This fact was not brought to our notice even at the time of the hearing of these applications and we stumbled on to it only by chance while going through the records at the time of writing of this judgment. This fact was not brought to our notice even at the time of the hearing of these applications and we stumbled on to it only by chance while going through the records at the time of writing of this judgment. These two writ petitions are liable to be dismissed also on the ground that the petitioner, suppressing a material fact, is trying to seek the same relief simultaneously before two courts. C. W. J. C. No.315 of 1990 ram Lakhan Choudhary V/s. State of Bihar 11. This petitioner too claimed to have made exports of beer and IMFL, in very large quantities, to four different firms on the basis of import permits purported to have been issued by the dy. Commissioner of Excise, Mahe, pondicheri. The procedure was the same as already stated in respect of the other cases. The details regarding the import permits, the orders granting export sanction, export passes and transport passes are contained in paras 15 to 50 of the writ petition. In this writ petition too, as in CWJC Nos.1187 and 1203 of 1990, the consignments were shown to have been received at their authorised destinations in Pondicheri and receipts granted by the Officers-Incharge of a bonded Warehouses at Pondicheri were duly received back and produced before the excise authorities in Bihar. Later, information was received from the Pondicheri Government, that in most of those cases the import permits were not issued at all by the excise authorities there; in a few cases in which import permits were issued at Pondicheri the specified quantity of IMFL was not delivered at the destination given in the permit. Needless to say that in case of the bogus permits there was no question of any consignments being delivered at any destination in Pondicheri and it, therefore, followed that the receipts showing the deliveries at Pondicheri were equally fake. The Excise Commissioner accordingly issued four demand notices against the petitioner on 8-6-1988, 13-6-1988 and 14-6-1988 (Copies at Annexures 2 to 5) raising demands of rs.17,86,050/-, Rs.1,78,605/-, Rs.13,38,570/- and Rs.10,59,588/-. The petitioner challenged the aforesaid demand notices before the Board of revenue by filing a revision under Sec.8 (3) of the Bihar Excise Act. The revision was dismissed by resolution, dated 20-9-1989 passed by the Member, board of Revenue (Copy at Annexure-1 ). The petitioner challenged the aforesaid demand notices before the Board of revenue by filing a revision under Sec.8 (3) of the Bihar Excise Act. The revision was dismissed by resolution, dated 20-9-1989 passed by the Member, board of Revenue (Copy at Annexure-1 ). The aforesaid decision of the Board of Revenue along with the demand notices are now sought to be challenged before this Court in this writ petition. C. W. J. C. No.7948 of 1990 mcdowell and Co. Ltd. V/s. State of Bihar and ors. 12. The petitioner company exported 27,271.50 L. P. Litres of IMFL to M/s. Suman Enterprises, Cuttack, orissa in 1982-83 and 2,23,668.90 L. P. Litres of IMFL to M/s. Wine Traders sonepat, Haryana in 1983-84. The paper work in so far as those exports are concerned appears to be quite thorough and complete. The routine procedure started with the production of the import permits in the office of the Excise commissioner, Bihar, Patna for the grant of export sanctions against those permits. On the basis of the export sanctions export passes and transport passes were issued authorising the removal of the specified quantity of IMFL from the petitioners Bonded Warehouse. The despatches were also shown to have been delivered at their respective places of destination at Orissa and Sonepat and in proof thereof excise Verification certificates were received from the excise authorities at Orissa and Haryana. In late 1989 the Excise Department received a complaint that bogus exports were made on the basis of fake import permits. On enquiry it was revealed that the liquor said to have been exported by the petitioner company never reached the authorised destinations either at Orissa or at Haryana. In the case of Orissa it was found that the importing warehouse M/s. Suman enterprises was a fake firm and the import permits and Export Verification certificates said to have been issued by the Excise authorities at Orissa were equally fake and bogus. The Haryana firm, namely M/s. Wine Traders, sonepat was a licenced warehouse but the import permits against which the alleged exports were made and the Export verification Certificates bearing the signatures of the excise authorities at haryana in proof of the consignment having been delivered at the Bonded warehouse of the Haryana party were fake and forged. In no case the liquor exported by the petitioner company reached at the authorised destination. 13. In no case the liquor exported by the petitioner company reached at the authorised destination. 13. On the above facts coming to light, the Excise Commissioner issued two notices to the petitioner on June 20, 1990. The first notice (Copy at Annexure-1) raised a demand of Rs.12,27,206.25 paise as excise duty on 27,271.25 L. P. Litres IMFL allegedly exported to the Orissa firm @ Rs.45 per l. P. litre; by the second notice (Copy at annexure-2) the Excise Commissioner raised a demand of Rs.1,45,65,100.50 paise as excise duty on 2,23,668.90 L. P. litre. The two notices were in considerable detail and gave all the material facts regarding the bogus exports. The petitioner challenged the demands by filing a petition before the Excise Commissioner, Bihar. The petition, after a detailed hearing was dismissed by the excise Commissioner by a reasoned order, dated 27-11-1990 (Copy at Annexure-3 ). At this stage the petitioner, instead of going to the Board of revenue, came to this Court, challenging the two demand notices and the order passed by the Excise Commissioner in this writ petition. 14. It may be noted here that in respect of the fake exports made by the petitioner company, first information reports were also lodged giving rise to secretariat P. S. Case Nos.445 and 446 dated 15-7-1990 for offences punishable under Sections 406, 419, 420, 467, 468, 471/34 of the I. P. C. and Sec.47-A of the Bihar Excise Act. We refer to the criminal cases only because Mr. G. P. Bimal, counsel for the petitioner advanced laborious submissions on that basis. According to him in those cases charge sheet Nos.5 and 6 were submitted in which one K. S. Raju, who at the material time was the Commercial officer of the petitioner company at hatidah, Patna was cited as accused along with some others. Learned counsel further stated that neither the company nor any one of its directors were shown as accused in the charge sheets submitted in the criminal cases. On the basis of the aforesaid charge sheets, learned counsel appearing for company strenuously argued that the impugned demands made against the petitioner were not sustainable in law. He made repeated references to the case diaries of the two criminal cases in support of his submission. 15. On the basis of the aforesaid charge sheets, learned counsel appearing for company strenuously argued that the impugned demands made against the petitioner were not sustainable in law. He made repeated references to the case diaries of the two criminal cases in support of his submission. 15. We have taken note of the submission merely for the sake of the record and in our opinion the submission is quite misconceived. There is hardly any need to point out that a criminal liability and a liability to pay excise duty under the Excise Act are quite different in nature. The ingredients of a criminal offence and the degree of proof required to establish a criminal charge are vastly different from the requirements to sustain a demand for payment of duty under the Excise act. For raising the impugned demands the Excise authorities are not required to prove, to the same stringent degree, that the petitioner was a member of a criminal conspiracy or it had abetted in forging the fake documents in cheating the government of its revenue through fraudulent transactions. All that is required to be shown is that the consignments of the exported liquor were not delivered at their authorised places of destination and hence the licencees had incurred the liability to pay excise duty on those stocks under the provisions of the Act, the Rules and the licence/bonds. 16. Now, coming to the liability of the petitioners/licencees under the Excise Act, it may be noted at the outset that none of the petitioners boldly denied the allegation by asserting that the import permits and the Excise verification Certificates showing the receipt of the despatches at their authorised places of destination were genuine and correctly accounted for the exports made by the petitioners/licencees. In case those documents were genuine the petitioners could obtain certificates from the Excise commissioners of the concerned States that the consignments of IMFL were duly delivered at the importing Warehouses; and that would have been the end of the matter. Instead of that all that was tried to be done before the Court was to explain away the petitioners role and to dissociate or at least to distance away the petitioners from the fraudulent nature of the exports. It was greatly stressed that in making the exports in question the petitioners were simply following the directions issued by the excise authorities. It was greatly stressed that in making the exports in question the petitioners were simply following the directions issued by the excise authorities. It was stated that duty paid import permits issued by the Excise authorities of the different States were received on the basis of which export sanctions were given by the orders passed in the office of the Excise Commissioner, Bihar. In some of the writ petitions it has even been suggested that the import permits emanating from the different States were received directly in the office of the Excise Commissioner, bihar and the respective petitioners came in the picture only after the grant of export sanctions by the orders passed in the Excise Commissioners office. It is further stated that in case those import permits were bogus and fake the forgery was apparently so good as to deceive the Excise Commissioners office and hence it would be quite unjust and unfair to hold the licencees liable because they had no means to verify the genuineness of the import permits. It is further pointed out that on the basis of the export sanctions granted by the office of the Excise Commissioner, export passes and transport passes were issued by the concerned officials which contained directions for the petitioners/ licencees to remove the specified quantities of IMFL from their Bonded warehouses and to despatch them to the importing Warehouses. On the basis of those passes the specified quantities of IMFL were removed from the bonded Warehouses in presence of the officer-in-charge. In four cases of this batch (CWJC Nos.1187 and 1203 of 1990, 315/90 and 7948/90) the Excise verification Certificates were also received in proof that the consignments were duly delivered at their authorised places of destination and the same were produced before the Excise authorities. It is further stated that under the terms and conditions of their licences and the various provisions of the Act and the rules the petitioners were legally obliged to follow and to act according to the directions contained in the export passes and the transport passes and in case they had refused to sell the specified quantities of IMFL and to deliver the same to the importing party they would have incurred the liability of cancellation of their licences. 17. 17. An impression is thus sought to be given that the petitioners simply followed the directions given by the excise officials and in case the Excise authorities were deceived and duped by the fake import permits it was a matter between the excise authorities and the importing party who could only be held responsible for the fake import permits and the petitioners/licencees in this stage hardly come in the picture and the action of the Excise authorities in raising the demands against the petitioners was not only unjust, unfair and arbitrary but amounted to passing on to the petitioners the consequences of their own mistake and failure. 18. On behalf of the State it is strongly denied that the petitioners/licencees had merely a passive role to play in those fraudulent exports. According to the State it would be quite ridiculous to suggest that out of dozens of licencees in the state the petitioners were fortuitously selected in the office of the Excise Commissioner to make the exports against the fake import permits. It is explained that the import/export of IMFL was essentially a commercial deal, arrived at between the importing and the exporting parties in the ordinary course of their normal business activities. It was pointed out that the occasion for obtaining an import permit would come much later and before that the importing party and the exporting party would come to an agreement regarding the price, the specified quality and the desired quantity etc. of IMFL intended to be imported. It was only after the business deal was settled that the importing party would obtain import per-mit (s) from the Excise authorities of the importing State and would send it to the exporter. It is clarified that at the material time (1982-83 and 1983-84) the excise authorities of the different States did not follow the practice of sending a copy of the import permit directly to the office of the Excise Commissioner and it was only after the Excise authorities had grown wiser in this regard on coming across such fraudulent cases that a circular letter was issued by the Government of Bihar advising the Excise authorities of the different States to send a copy of the import permit, by registered post, directly to the office of the Excise Commissioner, Bihar. As the practice prevailed during the material time the import permits would come to the exporter who on the basis of those permits would make an application for grant of export sanction to the Excise commissioner through the District Excise Officer (Supdt. of Excise/asstt. Commissioner of Excise ). In the office of the Excise Commissioner the application for the grant of export sanction were dealt with by a Dy. Commissioner of Excise (Distillery and Warehouses ). Following the grant of export sanction the exporter/licencee would approach the District Excise officer for issue of export pass on making payment of the export pass fee and after getting the export pass he would obtain transport pass from the Excise Officer Incharge of his Bonded Warehouse (who was usually an Excise Inspector ). On completion of these formalities the exporter/licencee was authorised to remove the liquor (IMFL) in such quantity as was specified in the pass from his Bonded warehouse without payment of duty for exporting it to the importers place of storage. As per the practice prevalent at the material time the second copy, each of the export pass and transport pass, which was meant for the Collector of the importing district was handed over to the exporting party who was supposed to produce them before the Col lector. Similarly, the Excise Verification certificates, in proof of the despatches having been duly delivered at their authorised places of destination, came to the exporter who forwarded them to the Excise Department. In every import/export deal the exporter/licencee was the real and immediate beneficiary as in each transaction his cost price and profit on the non-duty paid IMFL was paid to him before the removal of the liquor from the Bonded Warehouses. 19. In CWJC No.7948/90 in the order of the Excise Commissioner rejecting the petition filed against the demand notices it was observed in this regard as under: "it is clear that the application for export of liquor to both the destinations in question were made by the company to the distillery officer, along with details of the import permits. Only on those being received from the distillery officer was export sanction accorded. Export pass fee were deposited by the company thereafter. The consideration towards cost price of the exported liquor was received by the company. The export consignments were also despatched by the company. Only on those being received from the distillery officer was export sanction accorded. Export pass fee were deposited by the company thereafter. The consideration towards cost price of the exported liquor was received by the company. The export consignments were also despatched by the company. In the circumstances, it is difficult to accept that the company was an uninterested spectator and had nothing to do with the transaction except to act on the export authorisation received by it. Receipt of large sums of money towards cost price, deposit of fees, despatch of consignments etc. are all Volitional activities and there is no claim that this was done under coercion or threat. It was clearly a business transact/on involving substantial pecuniary benefits to the company. Such transactions are not done in the dark and the company need not have applied for export authorisation if it was not interested or benefitted. If the company was not keen nobody could force it to export to any particular destination. The company exported liquor by choice and must face the consequences of such exports not arriving at their destination. Normally the receipt of the Excise verification Certificates would be an acceptable proof of the arrival of the consignment at the destination. However, the presumption is that such certificates were genuine and issued by the authorised excise authority of the importing warehouse. If those documents were fake, they cannot be used as a defence to deprive the State of its legitimate revenues. The fact that the consignments did not arrive at their destination at Cuttack and Sonepat has not been controverted by the Company. In fact, if this was so, the company could have obtained easily a certificate from the excise Commissioner of Orissa and haryana about the fact of arrival of the consignment at the importing warehouse. Such a confirmation would have knocked out the very basis of the demand notices. The company has had sufficient time to do so but has failed to produce any evidence contrary to the finding of the enquiry Officer that the consignments were not received at their destination. This also stands to reason. If the firm was nonexistent as in Orissa or the permits, fake as in Haryana, the possibility of the consignments arriving does not arise. " 20. At the time of hearing of these cases the Excise Commissioner was present as directed by this Court. This also stands to reason. If the firm was nonexistent as in Orissa or the permits, fake as in Haryana, the possibility of the consignments arriving does not arise. " 20. At the time of hearing of these cases the Excise Commissioner was present as directed by this Court. He further explained the manner in which the exporters/licencees were likely to make huge illegal profits in the transactions of fraudulent exports. It was stated that at the material time the fee for export passes was levied @ Rs.4/- per l. P. litre whereas the excise duty payable in the State was @ Rs.45/- per L. P. litre. Thus using a fake import permit the licencee was able to get a seizable stock of IMFL released from his bonded Warehouse on payment of Rs.4/- per L. P. litre only as export pass fee. By clandestinely passing on this stock to the underground market, the so called exporter could make an illegal profit upto Rs.41/- per L. P. litre. 21. In the very few cases where the import permits were not found to be fake, the excise duty payable in the importing stage at the material time was much lower than the excise duty (@ Rs.45/- per L. P. Litre) payable in this State and it still worked out to be much cheaper if Rs.4/- per L. P. Litre, the export pass fee, was added to the amount of excise duty paid in the importing state and thus in those cases also if the stocks removed from the Bonded warehouse were clandestinely sold to the underground market in this State the exporter could still make a large illegal profit. 22. Having regard to the facts and circumstances stated on behalf of the state in the counter affidavits filed in c. W. J. C. Nos.5461/89 and 315, 1187, 1203 and 7948 of 1990 and the notes of arguments submitted on behalf of the state, it becomes plain and clear that the petitioners claim that in marking those fraudulent exports they were merely following instructions given by the excise authorities has no legs to stand. It is impossible to accept that the petitioners had no knowledge or inkling regarding the fraudulent nature of the transactions. 23. It is impossible to accept that the petitioners had no knowledge or inkling regarding the fraudulent nature of the transactions. 23. It was finally contended on behalf of the petitioners that in any event the exports in question having been made on the basis of duty paid importing permits issued by the different states it was not open to the respondent authorities to invoke clause 2 of the general Bond (in form No.158) for raising the demands of excise duty on the plea that the consignments were not delivered at their authorised places of destination. In this regard learned counsel placed reliance on Rules 11 and 11a of the Rules (bearing No.471-F, dated january 15, 1990 formed by the State government under Sec.89 of the act ). According to the petitioners rules 11 and 11a envisaged two distinctly separate modes of exports of imfl. Under Rule 11 export of non-duty paid IMFL could be made on the basis of a bond whereas under Rule 11a export of non-duty paid IMFL could be made on pre-payment of duty at the rate in force in the State where it was desired to be exported. It was submitted that the provisions contained in Rules 11 and 11a were mutually exclusive. It was further submitted that in this case the exports were admittedly made on the basis of import permits issued in the importing States and hence the exports were made following the provisions contained in Rule 11a According to the petitioners, therefore, the bond as contemplated under Rule 11 could never come into picture. The action of the authorities in relying upon clause 2 of the General Bond was therefore clearly untenable, 24. We find absolutely no merit or substance in the submission. To some extent it can be said that Rules 11 and 11a contain different provisions relating to (i) export on the basis of a bond and (ii) export on pre-payment of duty in the State where the liquor was desired to be exported. However, in the facts of this case Rule 11-A has no application for the simple reason that in facts no exports were ever made and what actually happened was that large stocks of non duty paid IMFL illegally removed from Bonded Warehouses without payment of lawful excise duty; rule 11-A envisages a bonafide and genuine export where duty has been in fact pre-paid in the importing State. It cannot be used as a sheild in case of exports shown to have been made on the basis of permits. 25. The position will be further clear if we refer to some other provisions of the Act and the Rules. Sec.10 of the Act, imposing restriction on export or transport, has a preemptory ring to it; it is as under: "10. Restriction on export or transport - No intoxicant shall be exported or transported unless- (a) the duty (if any) payable under chapter V xxx has been paid or a bond has been executed for the payment thereof: provided that the Board may, subject to such conditions (if any) as it thinks fit to impose, exempt any intoxicant from the provisions of this section. " Sec.12 deals with passes for export, import or transport. Sec.17 prohibits the removal of any intoxicant from the distillery or warehouse without payment of duty and is as follows: "17. Payment of duty on removal from distillery, brewery, warehouse or other place of storage - No intoxicant shall be removed from arty distillery, brewery, warehouse or other place of storage licenced, established, authorised or continued under this Act, unless the. duty (if any) payable under Chapter V has been paid or a bond has been executed for the payment thereof. " 26. Section 27 in Chapter V empowers the State government to impose duty on import, export, transport and manufacture. Sec.28 deals with the ways of levying excise duty and, in its relevant portion, is as follows: "28. Ways of levying such duty -Subject to any rules made under Section 60, clause (12) any duty imposed under section 27 may be levied in any of the following ways - (a) on an excisable article imported xx XX XX (b) on an excisable article exported - by payment in the State or in the state or territory to which the article is sent;" 27. Rules 11 and 11a under Rules 471-Fare as follows: "11 (1 ). Rules 11 and 11a under Rules 471-Fare as follows: "11 (1 ). When any person desires to remove foreign liquor from any distillery, brewery or spirit warehouse for export to any other provinces in India under a bond for the payment of excise duty, he must execute a bond in the prescribed form, before the Collector of the district in which the distillery brewery or spirit warehouse is situated (provided that before such a bond is executed, a pass fee @ (one rupee) per L. P Litre, shall be levied and realised, in case of export of rectified spirit and also absolute alcohol ). (2) Such bond may be either a general or a special bond. (3) The Collector shall sign the bond on behalf of the Government of Bihar as a party to the instrument. (4) The Collector shall then intimate, the fact of the execution of the bond, to the officer in charge of the distillery, brewery or spirit warehouse who shall after the particulars thereof have been entered in the prescribed bond register, issue the liquor as if duty had been paid.11-A. A person, holding license for the sale of foreign liauor to the trade, may also export it to any other State in India on pro-payment of duty at the rate in force in the State where it is desired to be exported, subject to the following conditions, namely - (1) The exporter shall obtain from the importer a permit authorising the import granted by the Chief Revenue authority of the State of import or by an officer duly authorised by him in this behalf. (2) the permit shall specify - (a) the name and address of the person or firm authorised to import; (b) the name and address of the exporter; (c) the description and quantity of foreign liquor; (d) the rate of duty leviable in the state of import: provided that in the case of troops and military bodies of the Defence services, the duty may be adjusted by book transfer. " 28. Finally clause 2 of the statutory agreement in Form 158 is as follows: "2. That. . . " 28. Finally clause 2 of the statutory agreement in Form 158 is as follows: "2. That. . . or his/their legal representatives shall on each occasion of import/export transport of the said article within the time mentioned in the pass or passes authorizing such import/export transport granted under the rules for the time being in force furnish satisfactory proof to the officer granting the pass that the specified quantity of the said excisable article has been duly delivered in full to the officer in charge of the bonded warehouse or other authorised place of destination specified in the said pass and deposited therein after the necessary examination, or in default thereof shall on demand pay or cause to be paid to the said Secretary of State for India in Council at the Treasury/sub Treasury at. . . . a sum equal to the amount of duty payable on the said specified quantity or such portion thereof as shall not have been delivered at the rate prescribed therefor under Section 27 of the Bihar and Orissa Excise Act, 1915, or any other amending Act for the time being in force. " 29. From a reading of the above provisions we have not the slightest doubt that the petitioners cannot escape the liability of payment of excise duty on the stocks of foreign liquor which were shown to have been exported on the basis of fake import permits and which were never delivered at their specified places of destination. It is undeniable that the import permits being fake no excise duty was paid in the importing State and hence the stocks of imfl could be removed from the bonded Warehouses only on payment of excise duty or on the security of the bond. On the basis of the provisions contained in Sections 10 and 17, we are further of the opinion that in the facts and circumstances of this case the bonds merely provided additional means of recovery but the liability of the petitioners arose in terms of the provisions of the Act and even in the absence of bonds the duty of excise would be recoverable from them. 30. For the reasons stated above, we find no merit or substance in any of the writ petitions. These are, accordingly, dismissed. However, without any order as to costs. Petition Dismissed.