Hon'ble Judges/Coram:
Vikramajit Sen and S.K. Singh

JUDGMENT

Vikramajit Sen, J.

1. The Appellants before us assail the impugned judgment of the High Court of Andhra Pradesh, which had upheld the legality of Andhra Pradesh Rectified Spirits Rules, 1971 (1971 Rules for brevity) and had found the requirement of obtaining a licence and the payment of Excise duty and Pass fee for exporting rectified spirit to be legal.

2. The Appellants have distilleries which produce various grades of industrial alcohol from molasses, also known as ethyl alcohol or ethanol. In exercise of powers conferred Under Section 72 of the Andhra Pradesh Excise Act, 1968, the Respondent State enacted the 1971 Rules. Rules 4, 13 and 15 are laid out herein for the facility of reference; although in these Appeals it is Rule 15 which is in focus--

Rule 4: Rectified spirit shall not be issued from a distillery or a warehouse without pre-payment of administrative fee meant for industrial purposes. In case of potable purposes, rectified spirit shall not be issued from a distillery or a warehouse without pre-payment of Excise Duty except when rectified spirit is moved in bound or when payment of Excise Duty has been exempted.

Rule 13: (1) No person shall be granted license for possession and use of rectified spirit for industrial purposes unless the applicant:

(a) deposits as security for the fulfillment of all the conditions of his license such sum as may be fixed by the Government from time to time which shall not be less than Rs. 15,000 in cash in the Government treasury; and

(b) executes an agreement in Form R.S.-V for payment of the costs, charges and expenses including salaries and allowances of such Excise staff as may be determined by the Commissioner or his nominee to be posted at the manufactory of the licensee in connection with the supervision to ensure compliance with the provisions of the Act, the rules and terms of the license. The staff shall be under the supervision and control of the Commissioner or the Authorised Officer.

Rule 15: (1) No rectified spirit shall be exported save under an export permit and in accordance with these rules.

(2) Any person manufacturing or possessing rectified spirit desires to export (herein-after referred to as the exporter) it for the purpose of its exportation to any area outside the State, shall apply in Form ARS-V to the Commissioner for export permit in that behalf. No such application shall be entertained unless rectified spirit is in surplus in the State. The application shall be accompanied by an import per........