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Prohibition and Excise Department Policy Note 2005-2006 Demand No.36
Introduction 1.1 The present Government headed by the Hon’ble Chief Minister of Tamil Nadu has initiated series of policy measures to augment excise revenue and to enforce the Prohibition Laws of the State in order to eliminate illicit and non-duty paid liquor. The Government is well aware that illicit and spurious liquor causes considerable damage to the health and economic well being of the poor and the downtrodden people. The Government is also firm in protecting them from the evils of illicit and spurious liquor. However, the Government is conscious of the fact that it cannot ignore the revenue from the sale of liquor by imposing suitable rates of duties and taxes on liquor. Tamil Nadu State Marketing Corporation Limited (TASMAC), a wholly owned Government Company, is functioning as the leading organisation contributing to the enhancement of revenue to the Government by exploring various means and thus supporting the Government in its planning and developmental activities. 1.2 The Government headed by the Hon’ble Chief Minister of Tamil Nadu will continue to take stringent action against illicit, non-duty paid and spurious liquor dealers. While taking action to eradicate the illicit, non-duty paid and spurious liquor, the Government is also taking concerted efforts to rehabilitate the families traditionally engaged in the illicit trade of liquor. Owing to the stringent steps taken by the Government, instances of deaths from the consumption of methanol-contaminated or other poisonous brews anywhere in the State have been effectively contained. 2. RETAIL VENDING OF IMFL 2.1 The licensees who had undertaken retail vending of IMFL in 2002-2003 by paying the privilege amount in advance, did not come forward with the applications for 45% of the shops notified for the year 2003-2004 under the new scheme. Ignoring all the opportunities offered to the ex-licensees by the State Government, they formed cartels among themselves and attempted to cause loss of excise revenue including privilege amount legitimately due to the Government. In order to thwart their attempt, the Government headed by the Hon’ble Chief Minister of Tamil Nadu ordered that the retail vending of IMFL be done by TASMAC, with effect from 29.11.2003. This visionary and bold initiative of the Government has proved to be a resounding success and has augmented Government Revenue. TASMAC SALES TURNOVER 2.2 The Tamil Nadu State Marketing Corporation has undertaken retail vending of IMFL with effect from 29.11.2003 and is continuing its operation successfully. When the retail vending were undertaken by ex-licensees from 29.11.2002 to 28.11.2003, the sales turnover was Rs.3877.00 crores. During the corresponding one year period i.e., from 29.11.2003 to 28.11.2004, after the retail vending was taken over by TASMAC, the sales turnover was Rs.5441.00 crores. After TASMAC took over the retail vending, the additional turnover mobilised during the corresponding one year period was Rs.1564.00 crores. Thus, the retail vending by TASMAC, when compared to the retail vending by ex-licensees, has resulted in a growth of 40.34%. The sales turnover for 11 months from April 2004 to February 2005 was Rs.5340.00 crores. The sales turnover during the corresponding period of the previous financial year was Rs.3826.00 crores only. Thus, the additional turnover during the 11 months period in the current financial year is Rs.1514.00 crores. TASMAC SALES VOLUME 2.3 When the retail vending was with the ex-licensees from 29.11.2002 to 28.11.2003, the volume of sale of IMFL was 149.79 lakh cases. After exclusive retail vending by TASMAC, the volume of sale of IMFL during the corresponding period from 29.11.2003 to 28.11.2004 has gone up to 183.16 lakh cases. Thus, the incremental sales volume alone is 33.37 lakh cases which resulted in the net growth of 22.27%. This is the highest ever sale achieved in 22 years since the inception of TASMAC. The sales volume of IMFL during the current financial year from April 2004 to February 2005 is 176.16 lakh cases, as against the sale of 143.06 lakh cases during the corresponding period of the previous financial year. Thus, the additional sales volume achieved during the 11 months period in the current financial year is 33.10 lakh cases. This resounding success stands testimony to the bold and clean administration of the Hon’ble Chief Minister of Tamil Nadu. GOVERNMENT REVENUE THROUGH TASMAC 2.4 The Government earns its revenue through excise duty, wholesaler vend fee, special privilege fee and sales tax. 2.5 When the retail vending was with the ex-licensees, the total revenue earned by Government, by way of Excise Revenue and Sales Tax on the sale of IMFL from 29.11.2002 to 28.11.2003 was Rs.3825.99 crores (inclusive of the privilege amount for retail shops and bars of Rs.679.51 crores collected from the ex-licensees in advance). The revenue mobilised by TASMAC after take over of retail vending from 29.11.2003 to 28.11.2004 was Rs.4441.88 crores. The additional revenue earned by Government after take over of retail vending by TASMAC during the one year period is Rs.615.89 crores. Compared to the last 11 months of the previous financial year, i.e, April 2003 to February 2004, the additional revenue generated during the current financial year from April 2004 to February 2005 is Rs.1151.66 crores. 2.6 The increase in sales volume, turnover of TASMAC and the Government revenue is shown in the charts. 3. STATE EXCISE LABELS Polysterised Hologram Excise Labels, with duplication-proof, security features have been introduced from March 2004, to prevent the illicit movement / sale of spurious liquor in the State and thus to safeguard the excise revenue to the Government. The new Excise Labels are machine-compatible, designed with more security features and their application on the Indian Made Foreign Liquor and Beer bottles is done by mechanical applicators. 4. ORGANISATION AND FUNCTIONS OF PROHIBITION AND EXCISE DEPT. 4.1 The Prohibition and Excise Department in the Secretariat functions under the administrative control of the Secretary to Government. The Secretary is assisted by one Deputy Secretary and five Under Secretaries. This department at the Secretariat, formulates Policy and reviews the implementation of Policies. The following are the three wings functioning under the control of the Prohibition and Excise Department:- 1.
Office of the Commissioner of Prohibition and Excise OFFICE OF THE COMMISSIONER OF PROHIBITION AND EXCISE 4.2 The Commissioner of Prohibition and Excise is the Head of the Department. The Commissioner is assisted by two Joint Commissioners, one Financial Controller (in the cadre of Joint Secretary to Government, Finance Department) and four Assistant Commissioners in the headquarters. Besides, a flying squad headed by an Assistant Commissioner conducts surprise inspections and random checking. 4.3 The Commissioner of Prohibition and Excise assists the Government in formulating policies on Prohibition and Excise and their implementation. He is enforcing the Tamil Nadu Prohibition Act, 1937 (Tamil Nadu Act X of 1937) and the rules made thereunder viz., Tamil Nadu IMFS (Manufacture) Rules, 1981, Tamil Nadu Distillery Rules, 1981, Tamil Nadu Brewery Rules, 1983, Tamil Nadu IMFS (Supply by wholesale) Rules, 1983, Tamil Nadu Liquor (Licence and Permit) Rules, 1981 and Tamil Nadu Liquor Retail Vending (in Shops and Bars) Rules, 2003 etc. 4.4 The Commissioner is vested with authority for granting the privileges and licences to establish a distillery for the manufacture of alcohol with the prior approval of the Government. The Commissioner of Prohibition and Excise has also been empowered to grant the privileges and licences with prior approval of the Government, for the establishment of Indian Made Foreign Spirit and Beer manufacturing units. He is also empowered to renew the licences of the units annually. DISTRICT - EXCISE ADMINISTRATION 4.5 The District Collector supervises the excise administration at the district level. The various statutory powers under the Tamil Nadu Prohibition Act, 1937 and the rules made thereunder are exercised by him. The Collector is assisted by an Assistant Commissioner (Excise) in the cadre of Deputy Collector in all Districts except Chennai and Coimbatore, where the Deputy Commissioners (Excise) in the cadre of District Revenue Officer are assisting the Collectors. In the Distilleries and Indian Made Foreign Liquor manufactory units, Deputy Collectors are posted as Distillery Officers and Excise Supervisory Officers respectively. Revenue officials in the cadre of Tahsildars and Deputy Tahsildars are posted as Excise Supervisory Officers and Bonded Manufactory Officers in the chemical units and Bonded Warehouses to supervise the proper use of alcohol and to levy excise duty on excisable articles under the Tamil Nadu Prohibition Act, 1937 and the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 and the Rules framed thereunder. 4.6 There are 13 Distillery Officers in the cadre of Deputy Collectors in the Distilleries and 8 Excise supervisory officers in the Indian Made Foreign Spirit and Beer Units functioning in the State. There are 5 Excise Supervisory Officers in the cadre of Tahsildar and 4 Excise Supervisory Officers in the cadre of Deputy Tahsildar in the DL licensed units (Chemical units using denatured spirit), one Tahsildar as Excise Supervisory Officer in a Chemical Unit using Rectified Spirit and 3 Bonded Manufactory Officers in the cadre of Tahsildar in the Bonded Manufactory Warehouses. SUGAR MILLS AND MOLASSES 4.7 There are 38 Sugar Mills in Tamil Nadu (19 in Private Sector,16 in Co-operative Sector and 3 in Public Sector). Molasses is produced as by product in the sugar manufacturing process. The Commissioner of Prohibition and Excise is functioning as the controller of molasses. 4.8 Alcohol is produced from molasses by fermentation and distillation. Consequent on the decontrol of molasses, the Sugar Mills are free to sell molasses to any licensed user, depending on the quantity permitted in the licence. 4.68 Lakh M.Ts. of Molasses was produced during the molasses year from October 2003 to September 2004. The sugarcane production was vastly affected due to acute drought condition that prevailed in 2003-2004 and 2004-2005. Consequently, the production of sugar and molasses was also affected. Therefore, the Government banned the export of molasses to safeguard the interests of the local industries. Owing to the timely and well considered decisions of the Hon’ble Chief Minister of Tamil Nadu, the stock position of molasses is maintained satisfactorily. DISTILLERIES AND ALCOHOL 4.9 There are 12 Private Sector and 2 Co-operative Sector Distilleries manufacturing alcohol from molasses. 4.10 Alcohol is used as raw material in the manufacture of Indian Made Foreign Spirit products, other chemicals and varnish. Educational Institutions, Laboratories and Research Institutions also use alcohol in small quantities. 4.11 There is no price control on Alcohol after the Government of India in 1993 rescinded the Ethyl Alcohol (Price Control) Order, 1971. This Government, consequently issued detailed guidelines in 1993 regulating the movement, possession and use of alcohol by the licensees in the State. The use of alcohol for various purpose like sale, possession, use, import, export and transport is governed by Tamil Nadu Rectified Spirit Rules, 2000 and the Tamil Nadu Denatured Spirit, Methyl alcohol and Varnish (French Polish) Rules, 1959. Due to the prevalence of acute drought conditions in the past two years in the State, the production of molasses has considerably declined and consequently there was shortfall in alcohol production also. To overcome this problem, the Government have permitted the Chemical Industries to import Denatured Spirit from other Countries. INDIAN MADE FOREIGN SPIRITS AND BEER UNITS 4.12 There are six Indian Made Foreign Spirits and three Beer units in the State. They supply IMFS and Beer products to the Tamil Nadu State Marketing Corporation Limited. ETHANOL 4.13 Pursuant to the decision of the Government of India to introduce Ethanol-doped-petrol, the State Government have permitted the manufacture of Ethanol (Anhydrous Alcohol) by 5 Distilleries in the State. Licences have been issued to Oil Companies for 6 locations and the Oil Companies have lifted and utilised 91.70 lakh litres of Ethanol. SPIRIT FROM SWEET SORGHAM AND SUGAR BEET 4.14 Pursuant to the announcement of the Hon’ble Chief Minister of Tamil Nadu on the floor of the Assembly to promote Sweet Sorgham and Sugar Beet as viable alternative crops, production of spirit from sweet sorgham has been permitted on experimental basis. BAN ON SALE OF LIQUOR TO PERSONS BELOW 21 YEARS OF AGE 4.15 The Hon’ble Chief Minister of Tamil Nadu has ordered to ban sale of liquor to the youth below 21 years of age in order to safeguard the youth in their formative years from the hazards of liquor consumption. This order is enforced strictly all over the State. REHABILITATION OF PROHIBITION OFFENDERS 4.16 The Government is of the firm belief that by providing sustainable rehabilitation assistance to erstwhile prohibition offenders, the production and sale of illicit arrack can be effectively contained. The Government have already sanctioned a sum of Rs.1.78 crores during the year 2003-2004. Further, the Hon’ble Chief Minister sanctioned Rs.2.50 crores for the year 2004-2005 during the Collectors and Police officers Conference held on 10.08.2004. STATE-WIDE AWARENESS CAMPAIGN 4.17 The Government had launched a State-wide awareness campaign during the year 2002-2003 for sensitising and educating the people on the evils of consuming illicit liquor/methanol. Self-Help Groups, Non-Government Organisations and other Voluntary Agencies were also actively involved in this campaign. The awareness campaign is being pursued in 2004-2005 also. The Government have sanctioned a sum of Rs.30 lakhs at the rate of Rs.1.00 lakh per district, vide G.O.Ms.No.324 dated.10.09.2004 of P&E (VII) Dept, for the purpose. This fund is utilised in the illicit liquor prone areas for conducting rallies, functions, street-plays and seminars etc., in the Districts. The print and visual media are also involved in the awareness campaign. COMPUTERISATION IN EXCISE ADMINISTRATION 4.18 Effective communication and error-free data are indispensable in achieving excellence in administration. Computerization of the Offices of the Commissioner of Prohibition and Excise at the State level and offices at district level becomes imperative to achieve this objective. 4.19 The office of the Secretary to Government in the Secretariat has already been linked with TASMAC electronically at a cost of Rs.13.80 lakhs. 4.20 The office of the Commissioner of Prohibition and Excise, the office of the Secretary to Government, Prohibition & Excise Department and TASMAC are being electronically inter-linked with Rs.5.00 lakhs sanctioned for connectivity. 4.21 To inter-link select Districts with the office of the Commissioner of Prohibition and Excise, a sum of Rs.10.00 lakhs has been sanctioned under Part II Scheme and the works are in progress. 4.22 Further, the Preventive Detention and Excise Wings of the Prohibition and Excise Department in the Secretariat, have already been computerised. 5. TAMIL NADU STATE MARKETING CORPORATION LIMITED (TASMAC) 5.1 The Tamil Nadu State Marketing Corporation Limited (TASMAC), a wholly owned Government Company, was incorporated on 23.05.1983 under the Companies Act, 1956. TASMAC has been granted exclusive privilege of wholesale and retail vending of IMFL for the whole State of Tamil Nadu as per Sections 17-C (1-A) (a) and 17-C (1-B) of Tamil Nadu Prohibition Act, 1937.The operations of TASMAC are guided by the Vision Statement "to Maximise the Revenue yield to the Government" and the Mission Statement "to achieve operational excellence by deploying the best options of technology and management for managing the supply chain, inventory and funds flow". FINANCIAL STRUCTURE 5.2 The Tamil Nadu State Marketing Corporation has an authorised capital of Rs.15.00 crores. The Government have contributed the entire share capital of Rs.15.00 crores. CORPORATE OFFICE 5.3 Tamil Nadu State Marketing Corporation Limited (TASMAC) has its Corporate Office in Chennai. In the Corporate Office, the Chairman and the Managing Director are assisted by two General Managers, one in the cadre of District Revenue Officer and other in the cadre of Joint Registrar of Co-operative Societies, one General Manager (Finance) and Company Secretary and other supporting staff. REGIONAL OFFICES, DISTRICT MANAGER OFFICES AND DEPOTS 5.4 There are five regional offices at Chennai, Coimbatore, Madurai, Salem and Tiruchirappalli headed by Senior Regional Managers in the cadre of District Revenue Officers. TASMAC has 33 District Managers’ offices. The Corporation is distributing the stock through its 41 IMFL depots spread throughout the State. These depots are managed by Depot Managers in the cadre of Tahsildars. RETAIL SHOPS 5.5 6,870 retail shops are functioning in the State. 3,159 retail shops are located in Urban areas and 3,711 retail shops are located in rural areas. 7,332 Shop Supervisors, and 19,171 Salesmen appointed on contract basis are working in these shops. BARS 5.6 4,016 bars are attached to the retail shops. 1,801 Bar Supervisors and 5,296 Bar tenders appointed on contract basis are working in these bars. EMPLOYMENT OPPORTUNITIES 5.7 TASMAC has generated employment to 33,600 persons, by employing them in retail vending shops, bars and District Managers’ offices. WELFARE SCHEMES TO THE RETAIL VENDING PERSONNEL 5.8 The benefits under the Employees Provident Scheme, Bonus and Incentive linked to sales are provided to the retail vending personnel appointed on contract basis. 6. NARCOTICS INTELLIGENCE BUREAU Narcotics Laws in Tamil Nadu are enforced by the District Police, Railway Police, Prohibition and Enforcement Wing, Narcotic Intelligence Bureau, C.I.D. Department under the control of State Government and Narcotics Control Bureau, the Collector of Customs and the Directorate of Revenue Intelligence under the control of the Central Government. During the year 2004, the Narcotics Intelligence Bureau has seized 3,821.900 kgs. of Dry Ganja in 1,285 cases valued at Rs.1.91 crores. In respect of wet Ganja the seizure was 1,37,510 kgs. in 41 cases valued at Rs.34.38 crores. In respect of heroin, the number of cases detected was 36 and the quantity seized was 40.736 kgs. worth Rs.40.74 crores. 7. PREVENTION OF VIDEO PIRACY Video piracy is an act prejudicial to the maintenance of public law and order. Due to this video piracy, the film industry has been facing severe crisis and the Producers, Distributors and Theatre owners have been put to loss of revenue. Representatives from various associations have pleaded for the eradication of this menace, and requested to put the film industry on the revival path. The Hon’ble Chief Minister ordered to amend the Tamil Nadu Prevention of Dangerous Activities of Bootleggers, Drug-offenders, Forest-offenders, Goondas, Immoral Traffic Offenders and Slum-grabbers Act, 1982 (Tamil Nadu Act 14 of 1982) to detain the video pirates under the said Act with a view to preventing them from acting in any manner prejudicial to the maintenance of public order. This Act came into force from 1st October 2004. 8. PROHIBITION ENFORCEMENT WING 8.1 The Prohibition Enforcement Wing (PEW) is functioning with the avowed objective of eradicating illicit distillation, transportation, possession and sale of illicit liquor / spurious and seconds IMFS and preventing smuggling from other States. The Prohibition Enforcement Wing is headed by the Additional Director General of Police, Enforcement. 8.2 The Additional Director General of Police, Enforcement is assisted by four Superintendents of Police, viz. Superintendent of Police, Central Investigation Unit (CIU) and Superintendents of Police, Enforcement, at Chennai, Salem and Madurai. The Superintendent of Police CIU heads the CIU (Central Investigation Unit), which is primarily an intelligence set-up with 2 Deputy Superintendents of Police, 6 Inspectors, 8 Sub-Inspectors and 1 Head Constable. 8.3 There are 94 PEW units throughout the State, each headed by an Inspector of Police. There are 38 Additional Superintendents of Police and 38 Deputy Superintendents of Police (PEW) to cover all the Districts and Cities. The Units and the Officers are placed under the control of the District Superintendents of Police and Commissioners of Police, on whom primarily falls the burden of prohibition enforcement. The PEW Units have been declared as Police Stations to enforce the provisions of the Tamil Nadu Prohibition Act, 1937. MEASURES TAKEN BY PROHIBITION ENFORCEMENT 8.4 As Methanol was found to be a major cause of hooch tragedies, ways and means were devised to put an end to the free availability of Methanol. This Government have taken a firm stand against misuse and diversion of Methanol by bringing Methanol under the purview of the Tamil Nadu Prohibition Act, 1937 and also suitably amending the provisions of the Tamil Nadu Denatured Spirit, Methyl Alcohol and Varnish (French Polish) Rules, 1959. A State-wide Awareness Campaign to spread the message amongst the people about the dangers of illicit liquor/ Methanol was continued during 2004-2005. 8.5 The Government have issued orders regarding the constitution of Auction Committees in the Districts / Cities for disposal of vehicles confiscated under the Tamil Nadu Prohibition Act 1937, vide G.O.Ms.No.315, P&E (V) Dept dated 25.08.2004. So far 724 motorised vehicles have been auctioned bringing in a revenue of Rs.1.36 crores. 8.6 21 check-posts are functioning in Nagapattinam, Cuddalore, Villupuram, Krishnagiri, Salem, The Nilgiris and Coimbatore Districts to keep a vigil and check clandestine transport of seconds / spurious IMFS and ID arrack from Pondicherry, Andhra Pradesh and Karnataka into Tamil Nadu. In the Collectors and Police Officers Conference held on 10.08.2004, the Hon’ble Chief Minister agreed to the proposal for creation of 6 Mobile Check Posts in Nagapattinam, Cuddalore, Villupuram, Krishnagiri, Tiruvallur and Tiruvarur Districts each headed by an Inspector of Police and in this connection Government have issued an order in G.O.Ms.No.332, P&E (VII) Dept.dated 27.09.2004. PERFORMANCE AND ACHIEVEMENTS 8.7 The District Police, PEW and CIU are taking all out efforts to achieve the ultimate aim of the Government to eradicate illicit distillation, transportation, possession and sale of illicit arrack / spurious and non-duty paid IMFL and to prevent smuggling into Tamil Nadu. 8.8 ACHIEVEMENTS DURING THE YEAR 2004-2005 (APRIL 2004 TO FEBRUARY 2005)
8.9 42,957 cases have been detected under the stringent provisions of the amended Sections 4(1-A) (for poisonous liquor), 4(1)(aa) and 4(1)(aaa) (for large possession of illicit liquor) and of Tamil Nadu Prohibition Act, 1937. 8.10 Prohibition Vigilance Committees have been formed in all black spot villages and Black Spot Village Registers are maintained in every Police Station and PEW Unit. The activities of bootleggers are systematically monitored and curbed to achieve the objective of illicit liquor free villages. 9. CONCLUSION This Government, under the dynamic and visionary leadership of the Hon’ble Chief Minister of Tamil Nadu is committed to eradicate illicit arrack in Tamil Nadu, protect the poor from hazards of illicit arrack and spurious liquor and rehabilitate the erstwhile illicit distillers. This Government has resolved to create adequate awareness on the evils of consumption of illicit arrack and spurious liquor. This Government strives to maximise excise revenue for supporting various development programmes undertaken for the welfare of the people of Tamil Nadu. O. PANNEERSELVAM MINISTER (Public Works,Prohibition & Excise and Revenue)
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