The court in its ruling on the plaint of a complainant has apparently ruled that the excise waiver was to have the duty benefits for the farmers or consumers and not the producers.
In a nutshell, the case relates to the 2001 policy of the Maharashtra State which allowed an excise rebate of 50% to the existing wineries and 100% to the new wineries till 2011. The wineries maintained the old MRP and simply showed an increase in their manufacturing costs in various documents. The excise duty column in the excise records maintained by the wineries continued to exist, even though the duty was not charged by them.
It has directed the excise department to collect the excise not paid by the producers to the excise department since 2001 on a retrospective basis and since it cannot be refunded to the consumers , it should be given to the grape farmers who would have been expected to benefit in the first place and the objective of the incentive was not to fill the coffers of the producers.
A show cause notice has been sent by the excise department to all producers of Nashik to reply or else a demand notice would be sent to deposit the amount waived off. The state department has been directed to inform the court that the directives have been complied with, within 2 months of the order which was dated around 25th of September.
Reliable sources suggest that the excise department has replied to the court a week ago that they shall collect the duty from the producers and will revert to the high court after the action has been completed.
Rajeev Samant of Sula says that the court decision has been unfortunate as it was done ex-party. He is confident that it would be eventually overturned by the court after proper representation of facts by the producers since the wine industry was not called in to testify, and shed proper light on the case.
'We are confident that this decision will be overturned since the state had clearly framed this policy to help the industry to flourish thus also helping grape growers. Both these objectives have been handsomely achieved so far, justifying the policy. It was clearly not done to bring cheap wine to the consumers,' says Rajeev.
Agrees Prahlad Khadangale, Chairman of Sankalp Wineries that came into existence a couple of years after the policy was framed. We did not have any MRP 2001 as we were not even there earlier. We determined our MRPs and got them approved by the excise department. If they did not follow the technical procedures, why should we suffer,' adding that 'our Nashik wine association is ready to go to the local court and we hope to get a stay order, if and when the department raises a demand.'
Prahlad is sitting on both sides of the fence. He and his partners are also grape growing farmers who got together and started making wine being sold under Vinsura label.
Yatin Patil of Vintage Wines who along with his wife Kiran is producing premium wine is equally foxed like the other producers. 'How can there be a retrospective action on some policy which has been announced by the State excise department?' He has also received the Show Cause Notice and is dreading the Demand Notice which would be the logical step and hopes that the association will be able to help them out of the problem.
The court decision does seem to be rather harsh. But it does indicate a bungling on the part of the Excise department who think they are law unto themselves and apparently took the court case rather lightly. Rather than admitting oversight in technical handling the case and taking producers on their side to face judiciary, they have once again showed their high-handedness which only the wine importers have been known to be subjected to, in the recent months.
In either case, it seems to be a long drawn battle which will keep both the producers tense and the department busy and uncomfortable for a while despite our sympathies with both.
Subhash Arora |