GOVERNMENT OF ANDHRA PRADESH
PROHIBMON AND EXCTSE DEPARTMENT
From To
I.A.S,
Sri Nishanth Kumar, The Principal Secretary to Government
Prohibition
Director, Excise and Revenue (Excise) Departrnent
A.P., Mangalagiri A.P., Secretariat, Velagapudi, Guntur District
C,R,No.928/2023/CPElE3. Dated!,01.2025
Sir,
Sub:- Proh & Excise Department -
Representation of A.P Wine Dealers Association,
Guntur with regard to compounding of Technical Cases - Certain repot - Reg.
Ref:- 1 Representation of Sri Rayala Subba Rao, President of A.P Wine Dealers
Association, Guntur, Dt.27. 12.2022.
2 This offi ce [Link].928/2023 lCPElE3, Dt.21.03.2024.
3 Govt., Memo No.REVO1-CPE0MISC/1 10/2023-Excise, Dt.07. 12.2023.
4 From Sri Rayala Subba Rao, President of A.P Wine Dealers Association,
Guntur, Dt. 12.08.2024.
5 Govt., lvlemo No.REVo1-CPEoMISC/110/2023-Excise, Dt. 14.08.2024.
6 GO Ms. No. 12, Revenue (Excise-Il) Department, dated 08-01-2018
7 GO Ms. No. 278, Revenue (Excise) Department, dated 02-12-2024
@@@
i invite kind attention of the Government to the subject and references cited. It is
submitted that, in the reference 1$ cited, the President A.P Wine Dealers Association, Guntur
has submitted a representation by enclosing the Commissioner's Compounding circular issued
during the year 2011 and stated that, previously technical cases viz., non-production of
Nowkarnama, non updation of account registers and shop opened before/beyond schedule
hours were compounded by the Deputy Commissioner as per the circular instructions of the
CPE [Link].3600l20l0lCPElG2, dt. 10.03.2011 and grave crime cases namely MRP, Non duty
paid, Parcel sales, Dilution, Dry Days compounded by the CPE.
Further, the President has stated that, the local Excise officials informed the licensees
that, huge compounding fee will be levied on the cases booked against the 28 Bars in technical
nature, Futher added that, the licensees are running their licenses by investing huge amounts
and not justifiable for imposing huge compounding fee for technical violations.
Finally, the President, A.P Wine Dealers Association has requested to give directions
to compound the technical cases by imposing compounding fee as per the circular instructions
of the Commissioner of Proh. & Excise in [Link].3600/20L0|CPE1G2, dt. 10.03.2011.
In this connection, it is submitted that, as per the circular instructions of the CPE
[Link].3600/20l0lCPElGz, dt. 10.03.2011, the following are the details of offenses and their
corresponding compounding fee to be levied and compounding authorities.
[Link]. Offence Compounding fee to be Authority competent
levied to compound
Shops Bars Clubs Shops Bars Clubs
(Rs.) (Rs.) (Rs.)
(1) (2) (3) (4) (s) (5) (7) (8)
1 Violation of business hours s000/- s000/- s000/- DC DC CPE
[Link]. Offence Compounding fee to be Authority competent
!evied to compound
Shops Bars Clubs Shops Ba rs CIubs
(Rs.) (Rs.) (Rs.)
2 No Nowkarnama s000/- s000/- s000/- DC DC PE
3 Non Maintenance/Non Production s000/- s000/- s000/- DC DC CPE
of Daily Account Registers/Bill
Books/Licence/Inspection Book
4 Allowing customers into the shop s000/- DC
premises
5 Providing more than one door for so00/- DC
entry and exit
6 Prohibited Advertisements s000/- s000/- s000/- CPE CPE CPE
7 Keeping duty paid stock tn 25000/- + 2s000/- 2s000/- CPE CPE CPE
unauthorized premises Value + Value + Value
thereof thereof thereof
8 Loose sale/Permitting consumption 2s,0001- CPE
in A4 shop premises
9 Sale/possession of duty paid stock 2s,0001- One lakh One lakh CPE CPE CPE
of other licenses of Bars & Clubs
selling liquor/beer to be taken out
of the premises
10 Sale/possession of diluted liquor One lakh One lakh One lakh CPE CPE CPE
11 Sale during dry days 25000/- One lakh One lakh CPE CPE CPE
L2 Sale to persons below (21) years ol s0000/- One lakh One lakh CPE CPE CPE
agae
IJ Sale to persons other than One lakh CPE
members and guests
L4 Unauthorized alterations/changes 2s000/- One lakh One lakh CPE CPE CPE
made to the premises
However, these circular instructions became inoperative due to issuance of the
following notification under Section 47 (1) of A.P Excise Act, 1968 vide G.O Ms No. 12, Revenue
(Excise-Il) Department, dated 08-01-2018: -
a. Any offence /
violation compoundable and committed for the first time may be
compounded for an amount not less than Rs.l lakh but not exceeding Rs.2 lakh
depending upon the nature of offence / violation.
b. Any offence / violation compoundable and committed for the second Ume may be
compounded for an amount not less than Rs.2 lakh but not exceeding Rs.5 lakh
depending upon the nature of violation.
c Any offence / violation compoundable and committed for the third time shall entail
cancellation of license.
d. Offences relating to non-duty paid liquor, spurious liquor, and adulteration of liquor
shall not be compounded and in all such cases licenses have to be cancelled duly
following the procedure laid down under law.
Further, the Government by Act No.4 of 2020 added the following Proviso in Section
47 in sub section (1) after the existing Proviso.
"Provided further that in the caseofan offence committed by the holder ofa bar
license for the ft6t tine, such offence may be compounded for a sum equal to
two ttmes of the license fee along with a waming. In the case of an offence
committed for the second time by the Bar licenseq the bar license shall be
cancelled. "
With this amendment to Section 47 (1), the offences committed for the first time
by bar licensees may be compounded for a sum equal to two times of license fee and for the
second offence the license shall be cancelled.
Further in the reference 7th cited, the Government have issued orders increasing the
compounding fee for MRP Violations and Belt Shops to Rs 5.00 Lakhs for first offence and for
the second offence, the Shop license may be cancelled.
Thus, prior to 2020 the violations committed by the licensees of Shops, Bars and In-
house were dealt with almost similarly depending upon the nature of violation. However, from
2020 onwards, the offences committed by the licensees of Bars are dealt with differently
without making any distinction between minor and major violations.
The violations committed by all the categories of licensees may be categorised into
minor and major depending upon the nature of violation. Certain minor violations like violation
of timings, not updating account books, no nowkarnama etc. are the common violations
committed by Shop, Bar and In-House licensees. These offences are committed sometimes
unintentionally under some exigency circumstances and therefore do not deserve harsh
punishments.
Viewed from this angle, the Bar licensees are inflicted more stringent punishments in
the form of huge compounding fee even for minor irregularities when compared to their
counterparb i.e. Shop and In-House licensees.
This anomalous situation has emerged due to insertion of an additional proviso as
mentioned above under Section 47 (1) of AP Excise Act, 1968 which does not make any
distinction between minor and major violations in respect of offences committed by the Bar
licensees. In order to rectify the anomaly and fix compounding fees differently for minor and
major violations on scales proportionate to the nature of violation committed by the licensees,
the following are proposed: -
9) Amendment to second proviso under section 47(1) of AP Excise Act, 1968
Existing Proposed
Section 47 (1) :- Section 47 (1) :-
Provided further that in the case of an offence Provided further that in the case of an offence
committed by the holder of a bar license for committed by the holder of a bar license for the
the first time, such offence may be first time, such offence may be compounded for
compounded for a sum equal to two times of a sum of money subject to such minima as may
the license fee along with a warning. In the be prescribed and notified by the Government
case of an offence committed for the second but not exceeding a sum of money equal to
time by the Bar licensee, the bar license shall two times of the license fee along with a
be cancelled. warning. In the case of an offence committed
for the second time by the Bar licensee, the bar
license may be cancelled depending upon the
nature of offence.
10) Consequent on amendment to the proviso under Section 47 (1) of AP Excise
Act, 1968 the Government may issue a notification specirying the scales of
compounding fees with minimum and maximum amounts.
11) The violations committed by the licensees amounting to breach of license
conditions under Section 31 (1Xb) of AP Excise Act, 1968 may be classified as
minor and major violations.
12) The following may be considered as minor violations and the compounding fees
leviable therefor: -
s Nature of Violation Min. Compounding fee to Authority competent to
No be levied compound
Shop Bar In-house Shop Bar In-house
I 1 Violation of business hours 2s000 25000 2s000 DC DC CPE
2 No Nowkarnama 25000 2s000 2s000 DC DC CPE
3 Non-Maintenance/Non- 25000 25000 25000 DC DC CPE
Production of Daily Account I
Registers/Bill Books/
Licence/Inspection Book
4 Providing more than one 2s000 DC
door for entry and exit I
5 Sale to persons below (21) 25000 2s000 25000 DC DC CPE
years of age
6 Sale to persons other than I 2s000 I CPE
members and guests (Cl
licence)
7 Non-installation of HPFS 2s000 25000 2s000 DC DC CPE
Softwa re
I
8 Non-installation of CCTV 2s000 2s000 25000 DC I
DC CPE
9 Transportation without GPS 2s000 25000 2s000 DC DC CPE
10 Permitting drunkenness, 25000 2s000 25000 DC DC CPE
disorderly conduct, riot or
gaming in a place where
intoxicant is sold
11 Permitting Gambling, 2s000 25000 DC CPE
Dancing, and other
obscene activities in a bar I
12 lNon keeping of Standard 25000 2s000 |
DC CPE
lmeasures in bar
13 Display of Advertisemenb 5000 5000 5000 DC DC CPE
13) The following may be considered as major violations and the compounding fees
leviable therefor: -
s, Nature of Violation Min. Compounding fee to be Authority
No Ievied competent to
Shop Bar/Microbr In-house compound
ewery
1 Loose sale in the shop 150000 CPE
premises
s. Nature of Violation Min. Compounding fee to be Authority
No levied competent to
Shop Bar/Microbr In-house compound
ewerT
2 Permitting consumption in 150000 CPE
shop premises
3 Sale/possession of duty 1s0000 Two times of 150000 CPE
paid stock of other licence fee
licensees
4 Dilution / Brand mixing of 150000 Two times of 150000 CPE
Liquor licence fee
5 Sale during dry days 150000 150000 150000 CPE
6 Unauthorized 150000 200000 150000 CPE
alterations/changes made
to the premises
7 Outside sale by Bar, In- 500000 150000 CPE
House, Micro Brewery
(Parcel Sale)
8 Keeping stock in un- 150000 Two times of 150000 CPE
authorised premises licence fee
9 MRP Violation 500000 CPE
Two times of 500000
10 Running unauthorised
outlet (Belt shop) I s00o0o licence fee
CPE I
14) The above-mentioned minor and major violations along with the compounding
fee may be inserted in the Schedule under AP Excise (Compounding of
Offences) Rules, 1973, by amending the item at Serial No, 2 in the table of the
Schedule: -
Existing: -
sl. Provision in Nature of offence Minimum
No, the Act under Compounding
which the fee
offence falls
2. 31 (1) (b) Breach of any of the terms and Rs. 5/- in each
conditions of a license or a permit case
for which the license or permit is
liable for cancellation or suspension,
not falling in any of the offences
enumerated in this column I
Proposed: -
sl. Provision in Nature of offence Minimum
No. the Act under Compounding
which the fee (Rs.)
offence falls
2 31 (1) (b) Breach of any of the terms and
conditions of a license or a permit
for which the license or permit is
liable for cancellation or suspension,
not falling in any of the offences
enumerated in this column
Minor Violations
Violation of business hours 2s000
No Nowkarnama 2s000
Non-Maintenance/Non-Production 25000
of Daily Account Registers/Bill
Books/ Licence/Inspection Book
Providing more than one door for 2s000
entry and exit
Sale to persons below (21) years of 2s000
age
Sale to persons other than 2s000
members and guests (Cl licence)
Non-installation of Track and trace 2s000
Sofurvare
Non-installation of CCTV 25000
Transpoftation without GPS 25000
Permitting drunkenness, disorderly 25000
conduct, riot or gaming in a place
where intoxicant is sold
Permitting Gambling, Dancing, and 25000
other obscene activities in a bar
Non keeping of Standard measures 25000
in bar
Major violations
Loose sale in the Shop premises 1s0000
Permitting consumption in Shop 150000
premises
Sale/possession of duty paid stock 150000
of other licensees by Shop/In-
House licensee I
Sale/possession of duty paid stock Two times of
of other licensees by Bar licensee the License fee
Dilution I Brand mixing of Liquor by 150000
Shop/In-House licensee
Dilution / Brand mixing of Liquor by Two times of
]
I Bar licensee the License fee
Sale during dry days 150000
Unauthorized alterations/changes 1s0000
I
made to the premises by Shop/In-
House licensee
Unauthorized alterations/changes 200000
made tothe premises by Bar
I
licensee
Sale of liquor to be taken outside s00000
the premise (Parcel Sale) by Bar,
Micro Brewery licensee
Sale of liquor to be taken outside 150000
the premises (Parcel Sale) by In-
house licensee
Keeping stock in un-authorised 150000
premises by Shop/In-house licensee
Keeping stock in un-authorised Two times of
premises by Bar licensee the License fee
MRP Violation 500000
Running unauthorised outlet (Belt 500000
shop) by Shop/In-house licensee
I
Running unauthorised outlet (Belt Two times of
shop) by Bar licensee I
the License fee
15) The following further amendments are proposed to the provisions under AP
Excise (Compounding of Offences) Rules, 1973: -
a. In sub rule 3 (i) for Rs. 5000, Rs. 75000 may be substituted to
enable the Deputy Commissioners to compound the offences up to
Rs. 50000.
b. In sub rule 3 (ii) for Rs. 4000, Rs, 40000 may be substituted to
enable the Assistant Commissioners to compound the offences up to
Rs, 40000.
c. In sub rule 3 (iii) and in the proviso for Rs. 3000, Rs. 30000 may be
substituted and for the words "Excise Superintendent", the words
"District Prohibition & Excise Officer" may be substituted to enable
the District Prohibition & Excise Officers to compound the offences
up to Rs. 30000.
16) In addition to the proposed amendments, the Government may issue the
following orders -
a) The compounding fees in respect of minor offences as enumerated in
the Schedule shall be levied for the first offence, for the second offence
the compounding fees shall be twice that of flrst offence and thrice for
subsequent violations.
b) The compounding fees in respect of major offences as enumerated in
the Schedule shall be levied for the first offence, and for the second and
subsequent offences, necessary action including cancellation of licence
may be taken depending upon the nature of violation.
c) Further, in the above major offences, the licences shall be suspended
after issuing show cause notice, and on the request of the licensees
compounding proceedings may be considered.
d) MRP violation committed by the Shop licensee for the first time may be
compounded for Rs 5.00 lakhs and for the second offence the shop
licence may be cancelled.
e) The offence of running unauthorised outlet (Belt shop) by the shop
licensee committed for the first time may be compounded for Rs 5.00
lakhs and for the second offence the shop licence may be cancelled.
In view of the above, it is requested to the Government for kind
consideration in the following
a) to amend the second proviso under section 47(1) of AP Excise Act 1968
b) to amend the Schedule under A.P Excise (Compounding of offences) Rules, 1973
to enable compounding of major and minor violations on different scales of
compounding fees after amending the second proviso under section 47(1) of AP
Excise Act 1968.
c) To issue orders covering (a) to (e) at Para 8.
It is requested the Government to issue early orders in the matter.
Yourc faithfully,
Dir€ctor, Excise ibition
9-
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