SHILLONG: The Comptroller and Auditor General (CAG) report for the year ended March 31 has brought to fore large scale misuse of holograms by bottling plants in the State.
It also pointed out that implementation of holograms was rendered ineffective due to the lack of a testing laboratory in the State and absence of facilities to carry out any quality checks defeated the objective of introduction of holograms.
According to the report, as per the notification issued by the State Government (April 2009), application of printed security holograms issued by the Government on bottles, pouches and cans containing alcoholic liquor for human consumption was made compulsory on its issue from distilleries, breweries, bonds and licensees with the twin objectives of collecting the excise duty at the point of issue of such liquor and safeguarding public health and safety by certifying the genuineness of the alcohol.
The report stated that for implementation of holograms in the State, an agreement was entered into with M/s Uflex Limited, Noida in June 2009 for supply of holograms at an agreed cost of Rs 1.42 per hologram to be affixed on each. The cost of the hologram was included in cost price declared by the manufacturer and the cost of hologram included Rs 1.30 as the contractor’s share and Rs 0.12 as the share of the State Government.
Audit analysis of the efficiency and effectiveness of introduction of holograms in the State revealed that the State has no chemical laboratory, as a result of which IMFL produced locally were not getting tested by the Excise Department to test if it was fit for human consumption and if the strength of the spirit was in the prescribed level, i.e., 75 degree proof as indicated in the brand approved by the Excise Department.
It was also revealed that during 2012-13, 96,995 cases of IMFL and 70509 cases of beer on which holograms were affixed were allowed as go-down breakage and transit breakage for which no records were available and there is a possibility that IMFL are being sold in the market without payment of excise duty and VAT.
The report observed that the mandatory submission of sale statements by the retailers were not enforced and no physical verification of retailers were conducted during the review period which left no scope for verification by the Excise Department.
The CAG report further pointed out that in three bottling plants and one brewery, there was variance of 3.25 crore holograms issued (May 2010 to March 2013) by the Commissioner of Excuse (CE) and that shown as received and utilised by the licensees.
During May 2010 to March 2013, 9,74,70,000 holograms were shown as issued to three bottling plants as per records of the CE. However, during the same period, the bottling plants showed receipt of 13,00,06,558 holograms, utilisation of 12,76,37,602 and closing balance of 23,68,956 holograms as on March 31, 2013 as per the returns furnished to the CE.
“No action was taken by the CE to ascertain the discrepancy in the holograms issued and that shown as received by the bottling plants. The scope of issue of excess holograms without realisation of revenue cannot be ruled out,” the report added.
It was also noticed that 3,40,950 holograms were reported as wasted by three bottling plants between May 2010 and March 2013 and the wasted holograms were neither returned to the Excise Department by the distilleries nor was any action taken by the Department to take possession of the holograms to rule out any misuse of the Government labels.