The AAP Government sources on Monday issued a point-by-point rebuttal to the Delhi Chief Secretary’s report flagging alleged “violations of rules and procedural lapses” in the implementation of the Excise Policy 2021-22, amid a CBI probe into the matter.
As per the report, seven specific violations and lapses, including waiver of licence fee worth `144.36 crore of licensees due to the Covid pandemic, refund of `30 crore earnest money deposit (EMD) of a bidder for the airport zone, reducing the number of dry days, and lack of coercive action on payment default are the issues that have been raised.
The AAP sources defended the rebates allowed in the Excise Policy, saying the Government had acted and capped discount to 25 per cent, when market distortions were feared due to hefty concessions offered by liquor vends.
According to Government sources, the licensees had approached the Government requesting waiver in the licence fee for the days of the lockdown that came soon after liquor shops opened from November 17. The Government initially ignored their requests, but it waived the licence fee after the licensees approached the High Court, although there was no such specific provision for compensation in the tendered document.
“The licensees approached the High Court, which in its order on January 6, 2022 directed the Government to dispose of the matter within a
week.
The Excise Department had submitted to the Excise Minister not to consider the waiver as there was no such provision for it in the tender document. The Minister had asked the department to submit report if the licensees effected any sale on the days of Covid-19-induced restrictions,” sources said.
“On the basis of the Excise Department calculations, pro-rata licence fee waiver to each licensee was given separately. Further, actual waiver granted to the licensees as a whole was actually 24.02 per cent (not 49.54 per cent) with individual relief varying from 9.94 per cent to 41.01 per cent, totalling Rs 144.35 crore,” the sources said. In the matter of refund of the EMD in the airport zone, the Government sources said, “It is absolutely wrong to say that there was a loss of revenue because it obtained what was due.”
The EMD of the H1 bidder who failed to obtain the no objection certificate (NOC) from the airport authorities was returned as per the policy approved by the Government, they explained.
The issue was placed before the Excise Minister who directed “in all fairness, that the EMD should be refunded if the applicant fails to obtain NOC from Airport Authorities within 30 days, since no licence is given by the department by that time,” the sources said.
The Chief Secretary in his report had cited that the Excise Department revised the formula for calculation of rates of foreign liquor and that both beer and foreign liquor were made cheaper for retail licensees which tantamount to extending “undue favour” to retail licensees.
The sources said the Excise Department had after approval of the Group of Ministers (GoM) and Cabinet changed import pass fees on beer and profit margin per unit for manufacturer of foreign liquor.
The GoM had recommended changing prevailing import fee of `5 per bulk litre to `50 per case for IMFL and `50 per bottle of foreign liquor.
In the earlier excise regime, beer was exempted from levy of import pass fee.
Levy of import pass fee of `50 per case, as recommended by the GoM, would have led to a substantial hike in the wholesale price of beer segment, the sources said.
The profit margin in case of foreign liquor was added twice “inadvertently” as a result of this “double counting”, the price of foreign liquor was causing an increase by a margin of 80-95 per cent of the wholesale price in 2019-20, they said.