Karnataka State Policy

Karnataka State Beverages Corporation Limited “Seethalakshmi Towers”

78, Mission Road Bangalore 560 027

HANDBOOK ON POLICIES

2005-06

Karnataka State Beverages Corporation Limited

Handbook on Policies 2005-06

INDEX

Sl. No.

Subject Circular No. Page No.

1

Liquor Sourcing Policy for 2005-06

083

01 to 38

2

Liquor Sales Policy for 2005-06

084

39 to 48

3 Sourcing policy for rectified spirit and denatured spirit for 2005-06

085

49 to 74

4

Sales policy for rectified spirit and denatured spirit for 2005-06

086

75 to 87

5

Import policy for rectified spirit and denatured spirit for 2005-06

087

88 to 93

6

Policy on import of spirit from abroad (Potable/Non-Potable) for 2005-06

088

94 to 95

7

Export policy for rectified spirit and denatured spirit for 2005-06

089

96 to 97

Karnataka State Beverages Corporation Ltd. Circular No.083 dated 27-06-05

Circular No.083 Page 1 of 97

KARNATAKA STATE BEVERAGES CORPORATION LIMITED

Circular No.083 June 27, 2005

Liquor sourcing policy for 2005-06

A detailed procedure for sourcing of liquor has been prescribed in various circulars issued by the Corporation from time to time. This circular supercedes all previous procedures, so far as it pertains to sourcing of liquor. Suppliers are requested to take note of the procedure prescribed in this circular which would come into effect from 1.7.2005. 1. Submission of initial documents 1.01 Manufacturers/Suppliers desirous of supplying liquor to the Corporation for subsequent distribution to buyers shall submit the following documents, for the Corporation to initiate action.

(i) Details of the organisation of the manufacturer to be given in its letter head in the format in Annexure I, along with a copy of the certificate of incorporation or partnership deed and registration from the registrar of firms as the case may be.

(ii) In case of manufacturers based in the state, a certified copy of the License

granted by the Excise Commissioner under rule 4 of the Karnataka Excise (Distillery and Warehouse) Rules, 1967 or rule 3 of the Karnataka Excise (Brewery) Rules, 1967 as the case may be and a copy of the License granted under rule 5 of the Karnataka Excise (Bottling of Liquor) Rules, 1967.

In case of manufacturers located outside the state, certified copies of the Licenses under relevant rules as may be applicable, granted by the competent authority of the state where the distillery/brewery of the manufacturer is located. In case of suppliers supplying liquor imported from abroad, authorisation of the manufacturer, if any, permitting the supplier to deal with the products proposed to be supplied to the Corporation.

(iii) Details of authorised signatories of the manufacturer/supplier, who would deal

with the Corporation, to be given in its letter head as per the format in Annexure II.

(iv) Letter authorising representatives (not exceeding three) of the

manufacturer/supplier for collection of Order for Supplies and other documents, to be given in its letter head as per the format in Annexure III.



(v) An agreement as in the format in Annexure-IV, duly executed by the authorised signatory of the manufacturer/supplier in a stamp paper of denomination of Rs.100/-.

(vi) If the manufacturer/supplier is not the owner of the brands proposed to be

supplied, then a copy of the agreement between the manufacturer/supplier and the owner of the brand.

(vii) Certified copy of the latest audited accounts and annual report. If such

accounts pertain to a period other than the recently concluded financial year, reasons for not submitting the certified accounts of such year may be indicated.

2. Registration of labels 2.01 Labels of brands proposed to be supplied by a manufacturer located in the state have to be approved by the Excise Commissioner under rule 15(3) of the Karnataka Excise (Bottling of Liquor) Rules, 1967. Such an approval shall be obtained by the manufacturer and submitted to the Corporation. 2.02 As per rule 9(B) of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968 no item manufactured outside the state can be sold in the state without an approval of such brand label by the Excise Commissioner. 2.03 Manufacturers located outside the state shall apply to the Corporation as per the format in Annexure-V along with a copy of the permission for the manufacture of the brands proposed to be supplied, approval for labels as granted by the competent excise authorities of that state and the authorisation for exporting from that state to Karnataka. They shall remit necessary fees for label approval (currently being Rs.50,000/- per annum per label for liquor other than wine and Rs.25,000/- per annum per label for wine) and enclose the challan in original and a copy thereof and provide six copies of each label. 2.04 The Corporation would thereafter forward such applications to the Excise Commissioner for consideration. Manufacturers may note that the Corporation shall not be held liable by them in respect of any decision of the Excise Commissioner regarding approval of their labels. 2.05 As per rule 9 (C) (1) of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968 no item imported from abroad can be sold in the state without an approval of such brand label by the Excise Commissioner. And as per rule 9 (C) (2) of these rules, the Corporation is required to apply to the Excise Commissioner for approval of brand labels. 2.06 Suppliers of foreign brands shall apply to the Corporation as in the format in Annexure-VI enclosing challans for having paid the necessary fee for label approval.



Currently, the fee for label approval in such cases is Rs.20,000/- for liquor other than beer and wine and Rs.10,000/- for beer and wine. 2.07 The Corporation would then apply for label approval. Suppliers may note that the Corporation shall not be held liable by them in respect of any decision of the Excise Commissioner regarding approval of their labels. 3. Declaration of prices and Landed Cost 3.01 Manufacturers located within the State are required to declare the price of liquor in Form DP and the Maximum Retail Selling Price in form MRP under Rule 2AE and Rule 2AF respectively of the Karnataka Excise (Excise Duty and Fees) Rules, 1968. They shall do so and submit two copies of the declarations in forms DP and MRP as recorded by the Excise Commissioner. These details shall be made available to the Corporation at least three days prior to the date on which the manufacturer desires to have the first Order for Supplies (OFS) in respect of these brands. 3.02 While doing so, manufacturers may ensure that the description of the item in forms DP and MRP is exactly the same as the label approval accorded by the Excise Commissioner. In case of any difference, the Corporation would not act on the DP and MRP forms submitted by the manufacturer. 3.03 In respect of brands imported from outside the State, the Corporation is required to declare the price for sale and the Maximum Retail Selling Price of such products. They shall submit a cost sheet, containing details of basic price and duties in the form as in Annexure-VII. Based on the cost sheet, the Corporation would submit necessary declarations to the Excise Commissioner for recording the sale price and the Maximum Retail Selling Price. Manufacturers may please note that they are required to work out the Landed cost (see 3.05 below), the sale price and the Maximum Retail Selling Price taking due note of the provisions of the Karnataka Excise (Excise Duty and Fees) Rules, 1968. They shall be liable for any consequence arising out of any action initiated by the Corporation based on such cost sheets. 3.04 Suppliers desirous of supplying liquor imported from abroad shall submit a cost sheet containing details of basic price and duties in the form as in Annexure- VIII for stocks imported after payment of Customs Duty and as per the form in Annexure IX for stocks imported duty free. The price shall be indicated in Indian rupees and shall not be contingent upon any fluctuation in foreign exchange rates. Suppliers may please note that they are required to work out the Landed cost (see 3.05 below), the sale price and the Maximum Retail Selling Price taking due note of the provisions of the Karnataka Excise (Excise Duty and Fees) Rules, 1968. They shall be liable for any consequence arising out of any action initiated by the Corporation based on such cost sheets. 3.05 The term Landed Cost to the Corporation shall mean;



(i) In the case of supplies from the manufacturers within the State the ex-factory declared price of the manufacturer (including the profit margin) plus excise duty and additional excise duty as applicable.

(ii) In the case of supplies imported from outside the state but within India, the all inclusive ex-factory manufacturer’s price (including the profit margin) plus Import Fee plus Countervailing Duty and Additional Countervailing Duty. Manufacturers may ensure that the Countervailing Duty and Additional Countervailing Duty are calculated on ex-factory manufacturer’s price plus import fee plus the margin charged by the Corporation.

(iii) In the case of liquor brands imported from abroad after payment of customs duty, the Basic Price of the importer plus Customs Duty and other fees and levies, plus litre fee and Special fee as applicable.

(iv) In the case of duty free import of liquor from abroad, the Basic Price of the importer plus other fees and levies, plus litre fee and Special fee as applicable.

3.06 The Corporation shall charge a margin of 2 per cent on the Landed Cost, except in cases of liquor imported from abroad, where the margin shall be 5 per cent of the Landed Cost. 3.07 Manufacturers located in the state who revise their price shall submit the revised DP and MRP forms as recorded by the Excise Commissioner. The Corporation would implement revised declared prices as approved by the Excise Commissioner and intimated by the manufacturer. 3.08 In case of revision in prices by manufacturers located outside the state or suppliers delivering liquor imported from abroad, necessary particulars shall be given to the Corporation in the prescribed format. Such revision shall become effective after the revised DP and MRP are recorded by the Excise Commissioner in the case of former and from the 1st of the month following the month during which the particulars are received by the Corporation in the case of the latter. 3.09 In case of any change in the duty structure, new prices shall become effective from the date of notification issued by the government. The Corporation would compute the new prices and make necessary changes in prices. 3.10 Manufacturers in the state shall submit a revised Maximum Retail Selling Price in respect of their products, after re-recording such MRP in accordance with Rule 2-AF(2) of Karnataka Excise (Excise Duties and Fees) Rules, 1968. Till such time they submit the re-recorded MRP, no fresh OFS shall be issued. 3.11 In case of manufacturers located outside the state, the Corporation would effect necessary changes in prices with effect from the date of notification. Such manufacturers shall provide necessary particulars in Annexure VII for submitting a revised MRP for recording by the Excise Commissioner. Till such time the MRP is re-recorded, no fresh OFS shall be issued.



3.12 The procedure in para 3.11 above shall be applicable in case of suppliers delivering liquor imported from abroad, except that no re-recording of MRP would be necessary in such cases. 3.13 In all such cases, as the OFS would be issued at revised rates, all pending OFS would be cancelled by the Corporation and manufacturers shall surrender all outstanding OFS and collect revised OFS immediately. 3.14 Any loss/gain due to a price reduction/increase shall be to the account of the manufacturer, except in cases where such price increase results in payment of additional duty. In such cases, the incremental duty amount would be recovered and remitted to the Government passing on the benefit of price increase to the manufacturer. 3.15 Manufacturers/suppliers shall, before introducing any sales promotion or discount scheme, communicate to the Corporation, the details of such scheme and its impact on the maximum retail selling price. 4. Order for supplies 4.01 Supplies to the Corporation shall be based on the Order for supplies (OFS) issued by it. The Corporation shall issue OFS based on the stock requirement of depots after duly considering the quantity held, the sales trend and requests of the manufacturer/supplier, if any. To facilitate the process, the supplier may indicate the requirement of its brands and packs in various depots. However, the Corporation reserves its right to decide the quantity for which OFS can be issued. Special requests or difficulties faced by manufacturers/suppliers regarding issue of OFS may be addressed to the General Manager (Operations). 4.02 Two copies of the OFS will be issued for the exact quantity that the supplier proposes to transport. It is, therefore, imperative that manufacturers/suppliers indicate their despatch plan for issue of OFS. The OFS shall be signed by one of the authorised signatories of the Corporation whose specimen signatures may be seen in Annexure-X to this circular. 4.03 The OFS would indicate the validity date within which the manufacturer/supplier should complete the delivery. If a manufacturer/supplier does not honour the quantity indicated in the OFS within the validity period, then the order for the remaining quantity shall lapse automatically. The Corporation may, at its discretion, extend the validity of the OFS and the manufacturer/supplier shall honour the OFS within the extended validity period.

4.04 Repeated lapsing of OFS without valid reasons may result in reduction of quantity sourced and may also attract other penalties that the Corporation may specify from time to time.

4.05 In respect of supplies from outside the State or from outside India, the manufacturer/supplier shall, after the issue of OFS, remit the import fee, Countervailing



Duty and Additional Countervailing Duty or the Litre fee and Special fee as may be applicable for their respective brands. Manufacturers/suppliers may please take note that they are responsible for remitting the correct quantum of duties/fees and that they are liable for any short payment of duties and other consequences. The Corporation shall be entitled to recover any short payment of duty and other amounts from them, should such instances occur. 5. Duty free imports 5.01 The EXIM policy 2002-07 provides for duty free imports equivalent to 5 per cent of the average foreign exchange earned by exporters (eligible importer). The procedure detailed below shall be applicable for import of liquor into the state under this provision. 5.02 The eligible importer shall be permitted to import only registered labels approved for consumption in Karnataka for the relevant excise year. The eligible importer shall produce a copy of the eligibility certificate, issued by the Director General of Foreign Trade for duty free import of such stocks. 5.03 The eligible importer shall declare the brands and the quantity proposed to be imported under this provision. The source of import which shall be a supplier who has submitted initial documents to the Corporation and in whose favour the labels have been registered shall also be declared by the eligible importer. 5.04 The supplier as declared by the importer shall be responsible to complete customs and other formalities so that the goods can be transported to the state. 5.05 The Corporation shall be the indentor of stocks on behalf of the eligible importer. An Order for Supplies shall be issued by the Corporation to the supplier. The rate of supply of the item shall be as indicated by the supplier in the cost sheet for duty free import. 5.06 The supplier shall thereafter remit state levies as may be applicable. Suppliers may note that they are responsible for remitting the correct quantum of duties and that they are liable for any short payment of duties and other consequences. The Corporation shall be entitled to recover any short payment of duty and other amounts from them, should such instances occur. 6. Delivery

6.01 As indicated above, manufacturers shall effect supplies within the time period mentioned in the OFS. The stocks shall be delivered at the depot specified by the Corporation at the cost and risk of the manufacturer/supplier and shall conform to the brand, quantity and pack sizes as indicated in the OFS. Any delivery that deviates from the OFS shall not be acknowledged by the Corporation and shall not be unloaded at the depot.



6.02 An exclusive invoice shall be raised for every OFS issued. If a lorry load of liquor is in satisfaction of more than one OFS either partially or fully that many invoices shall be raised by the manufacturer/supplier. At the time of effecting delivery, the manufacturers shall invariably quote in their invoice, the reference number and date of the OFS issued by the Corporation and surrender the OFS in original to the receiving depot. 6.03 In cases of supplies from manufacturers in the state, the invoice rate shall be as indicated in the OFS. They are required to indicate the Landed Cost of the item as per the OFS placed on them. They may, if they so choose indicate the declared price and the duties thereon separately for every item. However, indicating the Declared Price for various items supplied and adding Excise Duty and Additional Excise Duty as a lump sum at the end of the invoice shall be avoided. 6.04 In respect of imported brands (both from outside the state and the country) the invoice rate shall be the all inclusive ex-distillery price of the manufacturer (item A (iii) of Annexure VII or item A (iv) of Annexure VIII or item A (iii) of Annexure- IX as the case may be). Other state levies paid by them may be claimed as a debit note in the format as in Annexure XI and XII as the case may be and shall be submitted along with the invoice. It may be ensured that the per unit rate (invoice rate plus debit note rate) is as indicated in the OFS. 6.05 Permit fee and other levies are not a part of the Landed Cost and therefore cannot be claimed in the debit note. Further, the Corporation is a Public Sector Undertaking as defined under section 2(31A) of Income Tax Act, 1961 (PAN No. AACCK1421A) with all the shares being held by Government of Karnataka and hence is exempt from TCS under section 206C of the Income Tax Act, 1961. Hence, TCS shall not be claimed either in the invoice or in the debit note. 6.06 The invoice of the manufacturer/supplier shall be accompanied by the following documents and shall be submitted to the receiving depot.

(i) The original OFS issued by the Corporation. If the supplies made are in satisfaction of more than one order so issued, all such orders shall be attached;

(ii) Copy of the permits issued by the Excise Department; (iii) Lorry Receipt; (iv) Copy of the challans for having remitted duties in case of manufacturers

located in the State; and (v) Necessary debit notes as indicated in para 6.04, if applicable.

6.07 All manufacturers in the state are required to mention the excise adhesive label numbers on all the liquor carton boxes supplied to the Corporation. Such details may be furnished on one of the longer sides of the carton box as per the format in Annexure XIII. No other matter shall be printed on this side. The excise adhesive label numbers shall be written in permanent marker pen.



6.08 Manufacturers/suppliers may please note that the consignment would not be unloaded in the receiving depot if the requirements indicated in the above paras are not complied with. 6.09 In respect of imported liquor (both from within the country and abroad), the supplier shall make arrangements to affix excise adhesive labels on the bottles and if necessary, offer the boxes for inspection at the depot. 6.10 Manufacturers shall ensure that the carton boxes used by them conform to the specifications of the Bureau of Indian Standards and that the boxes do not become a cause for excessive transit and/or depot damages. The Corporation may, if it so warrants, issue necessary guidelines in case of manufacturers who do not use standard boxes, which shall be followed by them. They may also ensure that each brand in their portfolio has a distinct carton box and in no case is a carton box similar to any other box in their portfolio. No labels shall be affixed on the carton box for distinguishing any aspect of the brand; such details shall be printed on the box. 6.11 Manufacturers shall also ensure that they do not overload the lorries transporting their goods. Needless to mention, such overloading is a major cause of excessive transit and depot damages. Any instance of overloading noticed by the Corporation may result in appropriate action as may be necessary. 6.12 The consignment shall reach the depot during working hours. Manufacturers shall ensure that the consignment is taken care of while waiting for unloading at the depot and the Corporation shall not be liable in this regard. 7. Adherence to quality 7.01 The manufacturer/supplier is expected to ensure that the items delivered to the Corporation are fit for human consumption and adheres to the quality as stipulated by the relevant standards of the Bureau of Indian Standards and/or other standards as may be applicable. 7.02 Further, as per rule 20A of the Karnataka Excise (Distillery and Warehouse) Rules, 1967 manufacturers in the state are required to establish a well equipped chemical laboratory within their premises. The liquor produced shall be released for sale only after the chemist certifies that the same is fit for human consumption. The Corporation expects that manufacturers maintain such certificates carefully and produce them, if so required. 7.03 Manufacturers/Suppliers of liquor imported from other states shall ensure compliance with rules/stipulations regarding quality as may be specified by authorities of that state. However, the quality control exercised by them shall in no way be less rigorous than 7.02 above.



7.04 Suppliers of liquor imported from abroad shall ensure that the quality standards and procedures as prescribed by the Department of Customs and Central Excise for imports into India are complied with 7.05 The Corporation may periodically request manufacturers/suppliers to test samples of such items as it may decide, in reputed laboratories and produce the test results, to ensure that quality standards are adhered to. If an item does not adhere to the quality standards expected of it, sale in respect of that particular batch of the item (if in stock) would be suspended immediately. The manufacturer/supplier would also be advised to improve the quality to conform to specifications. 7.06 In such a case, the manufacturer/supplier shall test all other brands also and produce test results to the Corporation. If any of these products do not conform to specifications, then such products would be black listed and the Corporation would stop transacting in the same at the risk and cost of the manufacturer/supplier. 8. Transit risk and losses 8.01 It is the responsibility of the manufacturer/supplier to deliver stocks at the depots of the Corporation. The manufacturer/supplier shall unload the stock, affix excise adhesive labels wherever necessary and stack the boxes in the depot. All risks during transit of liquor, (like broken bottles, short receipts, etc.) from the premises of the supplier till the stocks are unloaded and stacked in the depot shall be borne by the manufacturer/supplier alone and the Corporation shall not be responsible for the same. 9. Stocks held for sale 9.01 The Corporation would take necessary care of the stocks held for sale as is reasonably possible and expected of it. 9.02 Damages to the stock held for sale, as a result of any negligence of the manufacturer/supplier or the transporter (typical of these are bottles having hairline cracks resulting in steady evaporation of the contents, quantity filled being less than the declared quantity, losses experienced if the day’s production of beer is received in the depot, damage due to weak carton boxes, etc.) would be to the account of the manufacturer/supplier. Any decision of the Corporation as regards the nature and quantum of such losses shall be final and binding. Manufacturers/suppliers may, if they so desire, depute their representatives to verify such bottles and satisfy themselves. 9.03 Manufacturers/suppliers may ensure that stocks held for sale are sold expeditiously. Stocks that are more than ninety days old would attract a penalty of Rs.60/- per carton box per month or part thereof. The penalty would be levied on the number of carton boxes more than 90 days old as on the last day of the previous month. This amount shall be recovered against the payments due to the manufacturer.



9.04 If the manufacturer/supplier does not take necessary action to liquidate such stocks expeditiously, the Corporation may dispose off the stock in any manner as may be appropriate and the difference between the Landed Cost and the amount realised shall be borne by the manufacturer/supplier. The manufacturer/supplier shall not have any further claim against the Corporation in respect of such stocks. 9.05 However, any stock of beer lying unsold for a period of over six months from the date of delivery or stocks declared unfit for human consumption at the depot shall be drained out by the Corporation. Any expenditure incurred by the Corporation towards this shall be recovered from the manufacturer/supplier. In accordance with Rule 5 of the Karnataka Excise (Intoxicants Destruction) Rules, 1967, no compensation shall be payable in respect of such stock. 10. Inter depot transfers

10.01 Manufacturers/suppliers shall have the liberty to effect inter depot transfer of stocks for quick and easy disposal, if in their opinion, such transfers would facilitate disposal of stocks. The Corporation may also, if necessary, initiate inter depot transfers. In either case, manufacturers/suppliers shall bear all expenses towards inter depot transfers like permit fee, loading, transportation, unloading, stacking, etc. Losses to the stock due to the transfer shall be borne by them.

10.02 If for any reason, the Corporation expends any amount towards the transfer, like permit fees, such amounts shall be immediately debited to the account of the manufacturer. 11. Bottle returns 11.01 Buyers may return empty bottles directly to the brewery. The brewery may accept the bottles so returned and prepare a Goods Receipt Note (GRN), indicating the name and address of the buyer and the value of bottles accepted by the brewery. Amounts indicated in any document, other than the GRN, shall not be reckoned by the Corporation. 11.02 The depot where the GRN is delivered in original by the buyer would pass a credit note crediting the buyer and debiting the brewery. Such amounts shall be reckoned by the Corporation while making payment to the brewery for the goods sold. 11.03 The Corporation would periodically inform details of such credits given to buyers, with a request to confirm the same. If no confirmation is received within two months, it would be presumed that the credits given are in order. 12. Payment for stocks sold 12.01 The Corporation shall pay the manufacturer/supplier only for the stocks sold. Stocks held for sale shall not be eligible for any payment, except to the extent mentioned in clauses 13 and 14 below.



12.02 The amount payable to a manufacturer/supplier for the sales provisionally recorded between Thursday and Wednesday next shall be computed and paid on Saturday (Monday in case Saturday is a holiday). The period for which sales would be reckoned for payment would be suitably modified, depending on intervening holidays. For instance, if Friday happens to be a public holiday/bank holiday, sales between Thursday and Tuesday next would be reckoned and for the subsequent week, sales will be reckoned from Wednesday to next Wednesday. 12.03 Any amounts to be recovered from the manufacturer/supplier due to penalty charges, bottle returns, interest, etc. shall be recovered out of the amounts payable. The Corporation would provide a statement of provisional sales recorded to facilitate reconciliation. Any missing data due to delays/failures in electronic transfer of data shall be reckoned in the succeeding week and adjusted. 12.04 Payment by the Corporation would only be through a transfer directly to the bank account of the manufacturer/supplier. To facilitate such transfer, manufacturers/suppliers shall open an account with any one of the bankers to the Corporation or maintain an account with a bank having RTGS facility. No payment by any other mode is allowed. 12.05 In case the manufacturer/supplier desires a separate payment in respect of some brands, the Corporation would consider such requests on the following terms:

(a) The distillery may open a separate bank account appropriately titled (for instance M/s. XYZ Distilleries – Brand Owner Account) and communicate the account number to the Corporation.

(b) The distillery may specify the brands for which payment due is to be directly credited to this account.

(c) Operating this account may be internally decided between the distillery and the brand owner.

(d) The arrangement so made can be revoked only with a seven-day notice to the Corporation.

12.06 The Corporation would not be a party to any bill discounting or factoring arrangements that the manufacturer/supplier may enter into with his bank. 13. Information to suppliers 13.01 Every depot of the Corporation would provide details of sales effected during the day to representatives of manufacturers/suppliers. Such information would be provided by placing a copy of the sales invoices for the day for perusal. No other information like sales trend, market share, etc., would be made available at the depot level. Such information, if needed, may be sought from the Head Office directly.



13.02 All critical details like deliveries affected, sales, damages, etc., would be made available through the website of the Corporation (www.ksbcl.com). All manufacturers are required to verify the data and point out discrepancies, if any. If requested by the manufacturer/supplier, the Corporation would provide an extract of all transactions for facilitating reconciliation. Manufacturers/suppliers may verify the statement and point out instances of differences, if any, within the next two months. The Corporation would, after confirmation, initiate corrective action. However, no such difference shall be entertained by the Corporation after two months of the close of the financial year. 14. Advance towards duties paid for stocks delivered 14.01 The Corporation would, on an ongoing basis, advance the Excise Duty and Additional Excise Duty remitted by manufacturers in respect of stocks delivered. In addition to the advance towards duties paid for stocks delivered, manufacturers/suppliers may, if they so desire, seek a one time reimbursement of duties paid in respect of stocks held by the Corporation as on a particular date. The scale of the advance would be as per Annexure XIV. 14.02 Manufacturers/suppliers shall specifically express their willingness ten days prior to the date from which they desire the advance and conclude an agreement as given in Annexure XV before the advance can be paid. Any manufacturer who has opted for obtaining the advance may opt out after giving ten days notice. In such a case, the outstanding advance would be recovered in such installments as may be decided by the Corporation. 14.03 Stocks that have an inventory turnover ratio (the ratio computed as the total sales for the last three months divided by the average stock held during that period, called eligible stock) of 2.5 or above shall alone be eligible for the advance. 14.04 The Corporation shall have the first charge on the eligible stocks for which an advance has been paid. The manufacturer/supplier shall be obliged to inform this position to the bank with which it has banking arrangements and inform the Corporation accordingly. 14.05 Manufacturers/suppliers may ensure that the value of eligible stocks held by the Corporation is 1.50 times the advance outstanding against them. In the event the value of eligible stock falls below 1.50 times the advance outstanding, proportionate recovery would be made out of the amounts due to the manufacturer/supplier on the next payment day. 14.06 The advance shall be paid every week along with the payment for stocks disposed off by the Corporation. The advance shall carry interest at 12 per cent per annum. The advance in respect of the stock sold and the interest payable on the amount outstanding shall be computed every week and adjusted against the payment to be received by the manufacturer/ supplier.



15. Advance payment of duties for supply of stocks 15.01 Manufacturers/suppliers, who have adequate stocks and/or have sufficient raw material and work in progress and other facilities to supply stock against the OFS issued by the Corporation within three days of drawing the advance, are eligible to avail an advance for payment of Excise duty and Additional Excise duty as per the scale in Annexure XIV. 15.02 Only eligible stock (as defined in para 13.03) shall qualify for the advance. Manufacturers intending to avail an advance as aforesaid shall make a written request to the Corporation and conclude an agreement as in Annexure XV before their request is considered by the Corporation. 15.03 They shall indicate the amount of advance that they seek, giving details of the brands, sizes and quantities that they intend to supply against the advance requested. The Corporation shall scrutinise such applications and may make inquires and shall call for a confirmation from the Distillery Officer regarding availability of stocks for delivery and/or such other evidence as may be necessary to ascertain the stock position and the capability of the manufacturer to supply against OFS issued and arrive at the actual amount of advance required for payment of ED and AED by the manufacturer. 15.04 The Corporation reserves the right to reject an application completely or partially and make such changes in quantities and brands as it deems fit. The Corporation may, in order to safeguard its interest, attach such additional conditions as may be necessary. Thereafter the Corporation shall provide a demand draft in favour of the Excise Commissioner and the distillery officer of the concerned manufacturer shall acknowledge the same. 15.05 The Corporation shall have the first charge on the eligible stocks for which an advance has been paid. The manufacturer/supplier shall be obliged to inform this position to the bank with which it has banking arrangements and inform the Corporation accordingly. 15.06 Manufacturers/suppliers shall supply the ordered quantity, against which the advance has been availed as above, within three days from the date of payment of duty. The Corporation may at its sole discretion, extend the time for supply of stock by the manufacturer, but in no case shall it extend beyond seven days from the date of payment of duty.

15.07 The Corporation is at liberty to withdraw the facility, if a manufacturer/supplier persistently defaults or violates the conditions of sanction of the advance. 15.08 The advance shall be at a premium of 2 per cent over the normal interest charged by the Corporation as per para 14.06 above. The advance in respect of the stock sold and the interest payable on the amount outstanding shall be computed every week and adjusted against the payment to be received by the manufacturer/supplier.



16. Jurisdiction

15.01 All transactions of the Corporation with the Manufacturer/Supplier shall be subject to the exclusive jurisdiction of Bangalore.

17. Review of the policy

16.01 The above policy is subject to periodic review. If the circumstances so warrant, the Corporation may, at its sole discretion amend this policy and the same shall be binding on all buyers.

(R. Ramaseshan) Managing Director

To i) All Manufacturers & Suppliers ii) All Primary & Composite Distilleries iii) ED-1 / ED-2 iv) GM(S)/GM(N)/C(F)/A(F&A)/C(A) v) AGM(F)/AGM(LS)/MMIS vi) All IML Depot Managers vii) All Spirit Depot Managers viii) Circular – Master File



Annexure I

Details of the organisation of the manufacturer/supplier

(To be given in the letter head of the organisation)

Name of the organisation:

Type of the organisation:

Company/Partnership/Sole Proprietorship

Documents enclosed Certificate of incorporation/Partnership deed and registration from the registrar of firms

Name Address Telephone number

Fax number

Particulars of the Chief Executive/Managing Partner/Owner


Fax number

Particulars of the other Directors/ Partners

(1) (2) (3) (4) (5)

Address for correspondence

E mail id Particulars of the bank where payments are to be credited a) Name of the bank b) Branch c) Account number

Place: Sd/- Date: Chief Executive/Managing Partner/Owner

(Name)



Annexure II

Details of authorised signatories to deal with the Corporation on behalf of the manufacturer/supplier


Name of the signatory Designation Address Telephone number Mobile number E mail id Specimen signature (1)

(2)

(1) (2)


(Name)



Annexure III

Authorisation letter for collecting OFS/other documents from the Corporation

(to be issued in the letter head of the manufacturer/supplier) (Paste attested photograph of the person here) We hereby authorise Sri. …………. (name of the person) whose signature is attested below to collect OFS/other documents on our behalf from the Corporation. Place: Sd/- Date: Authorised signatory

(Name) Signature of Sri. ……….. (name of the person) Attested Sd/- Authorised signatory (Name)



Annexure IV

Agreement to be executed by a manufacturer/supplier desirous of supplying liquor

to the Corporation

(To be executed in stamp paper of denomination Rs. 100/-)

AGREEMENT

This Agreement made at Bangalore on ………….. day of ................ Two Thousand Five ( / /2005) between the Karnataka State Beverages Corporation Limited having its registered office at “Seethalakshmi Towers”, No.78, Mission Road, Bangalore 560027 represented by its General Manager (Operations) Shri James L.Ficcker, (hereinafter called the ‘Corporation’) which term, unless repugnant to the context, shall mean and include its executors, administrators, successors-in-interest, assigns, etc., of the ONE PART

AND M/s…………………………………………………………………………………………. represented by Shri………………………………………………. (hereinafter called the `Manufacturer/Supplier’) which term, unless repugnant to the context, shall mean and include its executors, administrators, successors-in-interest, assigns, etc., of the OTHER PART WHEREAS the Corporation, registered under the Companies Act, 1956, is a Government Company within the meaning of Section 617 of the said Act. WHEREAS the Corporation is a licensee under Rule 3(11) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968. WHEREAS the Manufacturer/Supplier is a licensee under Rule 2(d) of the Karnataka Excise (Distillery and Warehouse) Rules, 1967 and/or under Rule 2(m) of the Karnataka Excise (Brewery) Rules, 1967 and/or under Rule 2(4) of the Karnataka Excise (Manufacture of Wine from Grapes) Rules, 1968 and/or under Rule 5 of the Karnataka Excise (Bottling of Liquor) Rules, 1967.

OR The Manufacturer/Supplier is a licensee under the relevant Act and Rules of the exporting State.

OR

The Manufacturer/Supplier is a licensee under the Foreign Trade (Development & Regulation) Act, 1992.



WHEREAS under the Karnataka Excise Act 1965 and the rules made there under, the Manufacturer/Supplier shall sell wine, beer or liquor (all of which, i.e., Wine, Beer and Liquor are hereinafter collectively and severally referred to as ‘Liquor’) only to the Corporation. WHEREAS the parties herein have entered into this Agreement for the distribution of Liquor on the following terms and conditions. NOW THIS AGREEMENT WITNESSETH AS FOLLOWS: 1. Quantity for Distribution 1.1 The quantity of Liquor to be procured and distributed shall be determined by the

Corporation from time to time, keeping in view the demand for Liquor supplied by the Manufacturer/Supplier.

1.2 The Manufacturer/Supplier shall not claim the right for distribution of Liquor

through the Corporation. 2. Delivery 2.1 In case the Manufacturer/Supplier is located within the state, it shall bottle, seal,

affix excise adhesive labels, pack, load, transport, unload and stack the Liquor at the depots of the Corporation at its cost and risk. In case the Manufacturer/ Supplier is located outside the state or supplies Liquor imported from abroad, it shall bottle, seal, load, transport, unload, affix excise adhesive labels and stack the Liquor at the depots of the Corporation at its cost and risk. The Corporation is not liable for any transit risk and other perils. In its own interest, the Manufacturer/ Supplier may arrange for an insurance coverage for all the risks including transit risk.

2.2 The Manufacturer/Supplier shall ensure that the Liquor is transported in an

exclusive vehicle and that other goods are not transported in it. 2.3 The Manufacturer/Supplier shall deliver the Liquor in good condition within such

time and at such depots as specified by the Corporation in its Order for Supplies. 2.4 Delivery shall be in line with the Order for Supplies placed by the

Corporation and shall be completed within the period specified by the Corporation. Short supplies, if any, shall not be carried forward beyond the validity period of the Order for Supplies.

2.5 Non-delivery and/or repeated delays in adhering to the delivery schedule may

entail recall of the pending Order for Supplies, suspension of distribution and may attract other penalties as may be imposed by the Corporation.



2.6 The Manufacturer/Supplier may transfer Liquor from one depot to another depot of the Corporation to enable quick disposal and shall bear all costs towards such transfer including permit fee, loading, freight, unloading, stacking, etc. Any damages that may arise on account of such transfer shall be borne by the Manufacturer/Supplier.

3. Quality 3.1 The Manufacturer/Supplier shall ensure that the items delivered to the

Corporation are fit for human consumption and adheres to the quality as stipulated by the relevant standards of the Bureau of Indian Standards and/or other standards as may be applicable.

3.2 In case the Manufacturer/Supplier is located within the state, it shall conform to

the stipulations of rule 20A of the Karnataka Excise (Distillery and Warehouse) Rules, 1967 and shall make available to the Corporation the certificates issued by the chemist under rule 20A (2) of the said rules.

3.3 In case the Manufacturer/Supplier is located in another state, it shall ensure that

the quality and testing standards as specified by the authorities of that state are adhered to. However, the quality and testing standards shall in no way be inferior to 3.2 above.

3.4 In case the Manufacturer/Supplier supplies Liquor imported from abroad, it shall

ensure that the quality standards and procedures as prescribed by the Department of Customs and Central Excise for imports into India are complied with.

3.5 The Manufacturer/Supplier shall, at his cost and risk, withdraw stocks that do not

conform to the expected quality. 4. Cancellation of Order for Supplies 4.1 The Corporation shall, without prejudice to its legal rights, have the right to

forthwith terminate any or all Order for Supplies placed on the Manufacturer/Supplier and forfeit deposits, if any, if the Manufacturer/Supplier or any of his representatives, workers, employees, agents, etc.,

(a) indulge in any activity which is directly or indirectly prejudicial to the interest of the Corporation; or

(b) indulge in forgery, falsification, fabrication of any document, bill, voucher or delivery challan or commit any offence in connection with the manufacture and supply of Liquor, which offence is punishable under law.

4.2 All losses incurred by the Corporation on account of the Manufacturer/Supplier,

his agents, workmen, employees, etc. committing the above said prohibited acts, shall be recovered from the Manufacturer/Supplier.



4.3 If the Manufacturer/Supplier indulges in any unfair trade practice, the Corporation

shall have the right to cancel the Order for Supplies placed on the Manufacturer/Supplier.

5. Landed Cost 5.1 The Manufacturer/Supplier shall deliver the Liquor at the rate as specified by the

Corporation in the Order for Supplies. No other levy or fee shall be included. 5.2 Any loss/gain due to a price reduction/increase shall be to the account of the

Manufacturer/Supplier, except in cases where such price increase results in payment of additional duty. In such cases, the incremental duty amount would be recovered.

5.3 The Manufacturer/Supplier shall communicate to the Corporation any sales

promotion scheme/activity including the change in the maximum retail price of the goods, validity period, etc., at least two weeks prior to its introduction to the market.

6. Payment 6.1 Payment for the Liquor delivered shall be made only after the disposal of Liquor,

and is subject to any periodicity that may be specified by the Corporation. No payment shall be made for the stocks held for sale, except to the extent in 6.2 below.

6.2 The Corporation may advance, either in full or in part, the duties paid or to be

paid by the Manufacturer/Supplier to the Government. The Corporation would, from time to time, determine the interest payable on the amount so advanced, and the Manufacturer/Supplier shall pay the same.

6.3 The Corporation shall be entitled to deduct such advance, the interest due or other

dues from any amounts due to the Manufacturer/Supplier. 7. Stocks held for sale

7.1 The Manufacturer/Supplier, pursuant to Section 4 of Sale of Goods Act, 1930,

acknowledges that supply of liquor to the Corporation against Order for Supplies shall be construed as an agreement to sell under sub-section 3 thereof and that sale shall be concluded only upon such liquor being sold and delivered to buyers by the Corporation which shall be treated as fulfillment of the condition attached therewith under sub-section 4 thereof, for the purpose of transfer of property in the liquor being supplied by the Manufacturer/Supplier and distributed by the Corporation.



7.2 The Manufacturer/Supplier, without prejudice to the fulfillment of the condition as mentioned in 7.1 above, shall be responsible for liquidation of liquor stock supplied to the Corporation and shall further continue to be liable for all costs, taxes and levies or such other contingent liability that may prevail upon the stocks supplied by the Manufacturer/Supplier and held for sale/distribution by the Corporation, till liquidation of the same.

7.3 If the stocks held for sale is not disposed off within ninety days, the Corporation

would levy a penalty of Rs.60/- per carton box per month or part thereof. Such penalty shall be recovered by the Corporation out of any payment due to the Manufacturer/Supplier.

7.4 Without prejudice to 7.3 above, the Corporation may dispose of Liquor lying

unsold for over 120 days and the difference between the price of delivery of Liquor and the amount so realised shall be borne by the Manufacturer/Supplier.

7.5 Notwithstanding anything contained in the above, any stock of beer lying unsold

in the depots of the Corporation for a period exceeding six months from the date of delivery at the depot will be drained at the risk and cost of the Manufacturer/Supplier. No payment shall be made in respect of such stock.

8. Inspection and Supervision 8.1 The Manufacturer/Supplier shall offer all facilities to the Corporation for

supervising and verifying various activities like manufacturing, measuring, bottling, sealing, loading, transporting, unloading, etc.

8.2 It shall be open to the Corporation to post its officials under/or of the Government

and/or any technical and security personnel as it may deem it necessary from time to time.

8.3 More particularly, the Corporation shall have unhindered access to all

manufacturing and appurtenant facilities and records of the Manufacturer/Supplier for verification and inspection. It shall be entitled to monitor the movement of raw materials into and finished goods from the premises of the Manufacturer/Supplier.

9. Compliance with Laws

9.1 The Manufacturer/Supplier shall comply with the requirements of all laws, which

are applicable for him, including timely remittance of tax dues and filing of returns.

10. Force Majeure 10.1 Upon the occurrence of any event of force majeure, the Party being affected by

such event shall, without delay, notify the other Party in writing.



10.2 In the event of any failure in performance due to any force majeure condition,

such as war, strike, fire, natural disaster, or any other cause whatsoever beyond the control of the Party being affected, the Party so failing shall, to that extent, be exempted during the period of such happening from the liabilities that would otherwise result from its failure. The occurrence of the event of Force majeure will not relieve either party from performing its obligations at such times and to the extent as may be possible after the intervention of the event of Force majeure.

11. Arbitration

11.1 Any dispute, which may arise between the Parties herein shall be submitted to

arbitration. The arbitral award shall be conclusive, final and binding on both the Parties herein. The Manufacturer/Supplier has agreed with the Corporation to provide for the nomination of a sole arbitrator by the Corporation only from amongst the following:

(a) Any retired Judge of the Hon’ble Supreme Court of India ; or (b) Any retired Judge of the Hon’ble High Court of Karnataka.

The arbitration shall be conducted in accordance with the Arbitration and

Conciliation Act, 1996 as amended or substituted from time to time. The venue for arbitration shall be Bangalore. Indian Law shall apply.

12. Indemnity

12.1 The Manufacturer/Supplier shall keep the Corporation harmless and indemnified

in all matters arising from supply of the Liquor to the Corporation and its subsequent disposal. Any third party claims arising from any wholesaler, retailer or consumer shall be settled by the Manufacturer/Supplier at his cost.

12.2 Without prejudice to the generality of the circumstances contained in 12.1, the

Manufacturer/Supplier shall specifically indemnify the Corporation and keep it harmless with respect to

(i) Non-compliance with the standards specified by the Corporation; (ii) Non-conformation to the provisions of various laws in force; and

consequences, losses or claims (including claims of additional duty raised by the Government of Karnataka) more specifically, the non-remittance and short remittance towards the duties statutorily payable.

(iii) Any claims for infringement of patent, trademarks etc., relating to Liquor

delivered.



(iv) Any breach of the agreement entered into by the Manufacturer/Supplier with any brand owner for the purpose of bottling, manufacturing or otherwise.

13. Jurisdiction 13.1 Both the parties are amenable to the exclusive jurisdiction of the Bangalore City

Civil Court only, irrespective of where the cause of action or a part of it arises. 14. Damages 14.1 Notwithstanding any clause hereinabove, the Manufacturer/Supplier is liable to

compensate the Corporation for any loss suffered by it due to any act of commission or omission by the Manufacturer/Supplier.

15. Interpretation 15.1 In the event of any difficulty in interpretation or applicability of any provision, the

clauses contained in the Sourcing Policy of the Corporation shall prevail. The terms of the Sourcing Policy shall be read as part of this agreement and the terms thereof shall be binding.

IN WITNESS WHEREOF, the Corporation and Manufacturer/Supplier have set and subscribed their signatures and seals on the day, month and year aforementioned in the presence of the following attesting witnesses for Karnataka State Beverages Corporation Limited James L. Ficcker General Manager (Operations)

For Manufacturer/Supplier

Witnesses:

1. 2.



Annexure V

Application from manufacturers located outside the state desirous of supplying

liquor to the Corporation (To be given in the letter head of the organisation)

To The Managing Director, Karnataka State Beverages Corporation Limited, 78, Seethalakshmi Towers, Mission road, Bangalore 560 027. Sir, We desire to supply the following brands of liquor/beer manufactured outside Karnataka for distribution in Karnataka for the excise year 2005-06.

Sl. No Brand Size Pack

We request you to recommend the above brands for approval of brand labels to the Excise Commissioner. We understand that the Corporation is not liable in respect of any decision of the Excise Commissioner regarding approval of these labels. The following are enclosed.

1. Copies of the permission for the manufacture of the brands proposed. 2. Approval for labels as granted by the competent excise authorities of

………. (state). 3. Authorisation for exporting from …………. (state) to Karnataka. 4. Challan in original with a copy for having remitted the necessary fee. 5. Six copies of each label.

Thanking you, Yours faithfully, for . . . . . . . . . . . . . . . . . . . . . . Sd/- Authorised signatory (Name)



Annexure VI

Application from suppliers desirous of supplying foreign liquor to the Corporation


To The Managing Director, Karnataka State Beverages Corporation Limited, 78, Seethalakshmi Towers, Mission road, Bangalore 560 027. Sir, We desire to supply the following brands of liquor/beer/wine imported from abroad for distribution in Karnataka for the excise year 2005-06. We confirm that we are authorised to import these brands.

Sl. No Brand Size Pack

On our behalf, please apply to the Excise Commissioner for approval of brand labels. We understand that the Corporation is not liable in respect of any decision of the Excise Commissioner regarding approval of these labels. The following are enclosed.

1. Challan in original with a copy for having remitted the necessary fee. 2. A copy of the authorisation given by the manufacturer of the brand

permitting us to deal with the brands above. 3. Six copies of each label.

Thanking you, Yours faithfully, for . . . . . . . . . . . . . . . . . . . Sd/- Authorised signatory (Name)



Annexure VII

Cost sheet of Liquor brands imported from outside the state

(To be given in the letter head of the supplier)

Name of the brand

Size of the pack (in ml) Particulars 180 375 750

A. Cost build up for KSBCL selling price Number of bottles per case (i) Ex distillery price of the manufacturer (ii) Other fees/levies/cost Bottling fee Export fee Central Sales tax Others (insurance etc.)

(iii) All inclusive ex distillery price of the manufacturer [(i) + (ii)]

(iv) Import fee as applicable (v) KSBCL margin {at 2per cent of [(iii)+(iv)+(vii)+(viii)]}

(vi) Declared Price as per Rule 2AE [(iii) +(iv)+(v)] (vii) Countervailing duty at applicable rates (viii) Additional countervailing duty at applicable

rates

(ix) Landed cost to KSBCL [(vi)+(vii)+(viii)-(v)] (x) Selling price of KSBCL [(ix)+(v)] B. Cost build up for Maximum Retail Selling Price (i) KSBCL selling price per bottle (ii) Wholesale margin at 5per cent of (i) (iii) Landed cost for retail seller [(i) + (ii)] (iv) Retail margin at 20per cent of (iii) (v) Recorded maximum retail selling price [(iii) + (iv)]

Place: Sd/- Date: Authorised signatory

(Name)



Annexure VIII

Cost sheet of Liquor brands imported from outside the country after payment of

custom duty

(To be given in the letter head of the supplier) Name of the brand

Size of the pack (in ml) Particulars

Number of bottles per case A. Cost build up for KSBCL selling price (i) Basic price (ii) Customs duty (iii) Other fees/levies/cost Central Sales tax Others (insurance etc.)

(iv) All inclusive price [(i) + (ii) + (iii)] (v) Litre fee as applicable (vi) Special fee as applicable (vii) Total duties paid [(v) + (vi)] (viii) Landed Cost of KSBCL [(iv) + (vii)] (ix) KSBCL margin at 5per cent of (viii) (x) Selling price of KSBCL [(viii + (ix)] B. Cost build up for Maximum Retail Selling Price (i) KSBCL selling price per bottle (ii) Wholesale margin at 5per cent of (i) (iii) Landed cost for retail seller [(i) + (ii)] (iv) Retail margin at 20per cent of (iii) (v) Recorded maximum retail selling price [(iii) + (iv]


(Name)



Annexure IX

Cost sheet of Liquor brand imported duty free from outside the country

(To be given in the letter head of the supplier) Name of the brand

Size of the pack (in ml) Particulars

Number of bottles per case A. Cost build up for KSBCL selling price (i) Basic price (ii) Other fees/levies/cost Central Sales tax Others (insurance etc.)

(iii) All inclusive price [(i) + (ii)] (iv) Litre fee as applicable (v) Special fee as applicable (vi) Total duties paid [(iv) + (v)] (vii) Landed Cost of KSBCL [(iii) + (vi)] (viii) KSBCL margin at 5per cent of (vii) (ix) Selling price of KSBCL [(vii + (viii)] B. Cost build up for Maximum Retail Selling Price (i) KSBCL selling price per bottle (ii) Wholesale margin at 5per cent of (i) (iii) Landed cost for retail seller [(i) + (ii)] (iv) Retail margin at 20per cent of (iii) (v) Recorded maximum retail selling price [(iii) + (iv]


(Name)



Annexure X

Specimen signatures of the officers authorised to sign and issue Order for Supplies

1. Officers authorised to sign OFS in respect of supplies from any manufacturer/supplier.

Name of the Officer Designation Specimen Signature 1)

James L Ficcker

General Manager (Operations - South) 2)

1)

H C Ramesh Chand

General Manager (Operations - North) 2)

1)

I Sugunamurthy Assistant General Manager (Liquor Sales)

2)

Contd……



Annexure X

Specimen signatures of the officers authorised to sign and issue Order for Supplies 2. Officers authorised to sign OFS in respect of supplies from specific manufacturers.

Name of the Officer Designation and authorisation accorded

Specimen Signature

1)

S. Srinivasan

Depot Manager, KSBCL Depot, Ugar Sugar Works in respect of supplies from M/s.Ugar Sugar Works

2) 1)

C. Basavaraju

Depot Manager, KSBCL Depot, M/s.Samsons Distilleries in respect of supplies from M/s. Samsons Distilleries 2)

1)

V. Murali

Depot Manager, KSBCL Depot, M/s.Pampasar Distillery Ltd in respect of supplies from M/s.Pampasar Distillery Ltd.

2)

1)

P. Prabhakar

Depot Manager, KSBCL Depot, Hubli in respect of supplies from M/s.Kalburgi Distilleries Ltd.

2)



Annexure XI

Form of debit note for imports from outside the state (to be given in the letter head of the supplier)

To

M/s. Karnataka State Beverages Corporation Limited,

(Name of the Depot) Debit Note No: Date : Sir,

We have debited your account towards duties paid to the Government of Karnataka, relating to supplies made to you as per the details given below.

Details 1) OFS No & Date 2) Invoice No & Date 3) Invoice Value (excluding Karnataka State levies) Amount (Rs.) 4) Import Fee paid

Sl.no. No. of carton boxes Rate per CB (Rs.)

Amount (Rs.)

1. 2. 3. Sub total

5) Excise Duty paid Sl.no. No. of carton boxes Rate per CB

(Rs.) Amount (Rs.)

1. 2. 3. Sub total

6) Additional Excise Duty paid Sl.no. No. of carton boxes Rate per CB

(Rs.) Amount (Rs.)

1. 2. 3. Sub total

Total (4+5+6)

Amount (in words) Rs. ……………………………………………………………………. for XYZ Distillery/Supplier Authorised Signatory (Name)



Annexure XII

Form of debit note for imports from outside the country

(to be given in the letter head of the supplier) To M/s. Karnataka State Beverages Corporation Limited, (Name of the Depot) Debit Note No: Date : Sir, We have debited your account towards duties paid to the Government of Karnataka, relating to supplies made to you as per the details given below.

Details 1) OFS No & Date 2) Invoice No & Date 3) Invoice Value (excluding Karnataka State levies) Amount (Rs.) 4) Litre Fee paid


Amount (Rs.)

1. 2. 3. Sub total

5) Special fee paid


Amount (Rs.)

1. 2. 3. Sub total

Total (4+5+6) Amount (in words) Rs. ……………………………………………………………………. for XYZ Distillery/Supplier Authorised Signatory (Name)



Annexure XIII

Details to be printed on one of the longer sides of the carton box

Supplies to the KSBCL Name and Address of the Distillery/Brewery

---------------------------------------------- -------------------------------------

-------------------------------- Excise adhesive numbers

From To



Annexure XIV

Scale of Reimbursement of Duties paid

1. I M L

Declared Ex factory Price ( Rs)

ED per BL AED per BL Reimbursement Per CB

250 to 399 40 45 734 400 to 449 55 65 1036 450 to 649 55 75 1123 650 to 1199 55 90 1252 1200 and above 55 140 1684

2. Beer



125 to 150 4 20 187 151 and above 4 22 202

3. Wine



400 to 750 4 10 120 751 to 1200 4 18 190 1201 to 2500 4 48 449 2501 to 3000 4 65 596 3001 and above 4 70 639

4. Fenny



325 and above 45 42 751



Annexure XV

(Agreement to be executed by Manufacturers for Advance against stocks delivered/to be delivered on Stamp Paper of Rs.100/-)

AGREEMENT

This Agreement made at Bangalore on .................... day of ………... Two Thousand Five ( / /2005) between the Karnataka State Beverages Corporation Limited having its registered office at “Seethalakshmi Towers”, No.78, Mission Road, Bangalore 560027 represented by its General Manager (Operations) Shri James L.Ficcker, (hereinafter called the ‘Designated Authority’) which term, unless, repugnant to the context, shall mean and include its executors, administrators, successors-in-interest, assigns, etc., of the ONE PART

AND M/s…………………………………………………………………………………………. represented by Shri………………………………………………. (hereinafter called the `Manufacturer’) which term, unless, repugnant to the context, shall mean and include its executors, administrators, successors-in-interest, assigns, etc., of the OTHER PART WHEREAS under the Karnataka Excise Act 1965 and the rules made there under, the Manufacturer shall sell wine, beer or liquor (all of which, i.e., Wine, Beer and Liquor are hereinafter collectively and severally referred to as ‘Liquor’) only to the Corporation. WHEREAS the Corporation with a view to streamline payments to the Manufacturer has from time to time specified its policies. WHEREAS the Manufacturer has remitted Excise Duty and Additional Excise Duty to Government of Karnataka in respect of the stocks delivered to the Corporation on an on-going basis and at its option sought an advance from the Corporation to the extent of the Excise Duty and Additional Excise Duty remitted by it or proposes to deliver stocks to the Corporation on an on-going basis and at its option sought an advance from the Corporation to the extent of the Excise Duty and Additional Excise Duty payable by it for stocks to be delivered. WHEREAS the advance carries interest at 12 per cent per annum in case the Manufacturer has remitted the duty and 14 per cent per annum in case the Manufacturer proposes to deliver stocks after availing duty advance from the Corporation. NOW THIS AGREEMENT WITNESSETH AS FOLLOWS: The Corporation has agreed to extend advances equivalent to the amount of Excise Duty and Additional Excise Duty remitted or to be remitted by the Manufacturer in respect of



stocks held and supplies received by the Corporation or in respect of stocks to be delivered to the Corporation subject to the following terms and conditions:

(i) The amount of advance shall be computed as per the sourcing policy of the Corporation prevailing from time to time and shall be paid against the stocks held or supplies received by the Corporation or proposed to be delivered to the Corporation; however at no point of time the total advances so computed shall exceed the amount of Excise Duty and Additional Excise Duty paid by the Manufacturer on the stocks held by the Corporation or proposed to be paid for stocks to be delivered to the Corporation.

(ii) The Corporation shall recover the advances so paid, on a weekly basis, while

making payment to the Manufacturer against the sales effected.

(iii) Interest shall be calculated at the rate of 12 per cent or 14 per cent per annum as the case may be, on the balance outstanding at the beginning of each week and recovered while making payment to the Manufacturer against the sales effected.

(iv) The Manufacturer may opt to withdraw from this facility by giving at least ten

days notice in writing of his intention to do so and shall be relieved from this agreement only after all the dues, including interest and other costs as applicable, to the Corporation are fully settled.

(v) The Manufacturer hereby agrees to indemnify and keep the Corporation

indemnified at all times against all costs, losses and damages arising out of the Corporation having extended the advance to it.

(vi) The Corporation shall have first charge on all the eligible stocks on which the

advance has been paid and the same shall be communicated to its Bankers by the Manufacturer under intimation to the Corporation.

(vii) This agreement shall be in force till such time the advance amount and interest

thereon is fully settled by the Manufacturer. The Corporation shall be at liberty to stop making the advance at any time without assigning any reasons whatsoever and without any prior notice, in which event the Corporation shall not be liable to pay any damages if suffered by the Manufacturer on that account.

(viii) The Manufacturer shall at all times adhere to such other conditions that may

be imposed by the Corporation either specific to the Manufacturer or to all others in general.

(ix) Any dispute, which may arise between the Parties herein, shall be submitted to

arbitration. The arbitral award shall be conclusive, final and binding on both the Parties herein. The Manufacturer/Supplier has agreed with the



Corporation to provide for the nomination of a sole arbitrator by the Corporation only from amongst the following:

(a) Any retired Judge of the Hon’ble Supreme Court of India; or (b) Any retired Judge of the Hon’ble High Court of Karnataka.



IN WITNESS WHEREOF, the Corporation and Manufacturer have set and subscribed their signatures and seals on the day, month and year aforementioned in the presence of the following attesting witnesses. For M/s. Karnataka State Beverages Corporation Ltd.

For Manufacturer

Witness 1.

2.





Liquor sales policy for 2005-06

A detailed procedure for disposal of liquor has been prescribed in various circulars issued by the Corporation from time to time. This circular supercedes all previous procedures, so far as it pertains to disposal of liquor. Buyers are requested to take note of the procedure prescribed in this circular which would be effective from 01.07.2005. 1. Submission of initial documents 1.01 Buyers desirous of procuring liquor from the Corporation shall submit the following documents, before they can be allowed to transact with the Corporation.

(i) Details of the organisation of the buyer to be given in its letter head in the format in Annexure I.

(ii) A certified copy of the licence granted by the Excise Commissioner under the

Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1967 as may be applicable to the buyer.

(iii) Certificate, if any, from the Income Tax Department for collecting tax at a

reduced rate under section 206C of the Income Tax Act, 1961. 2. Issue of stocks 2.01 Stock shall be issued to buyers during working hours, which shall ordinarily be between 12 noon and 6 pm. Issue of stock before or after these hours shall be at the discretion of the depot manager and shall be exceptional. 2.02 Ownership of stocks sold to buyers shall pass on to them immediately upon delivery at the depot. Buyers are therefore advised to verify the goods before accepting delivery. If the buyer so desires, Depot Managers shall allow prior inspection of carton boxes before delivery (popularly called open delivery), in order to avoid claims for shortages or breakages later. 2.03 Buyers shall be responsible for loading the purchased goods into their vehicle and transport the same to their destination at their risk and cost. Any damages arising during handling of goods at this stage shall be their responsibility. Under no circumstances, shall any claim for damages be entertained after handing over the goods and no depot shall accept return of goods after issue.



2.04 Sale of goods shall be for a minimum value of Rs. 25,000. Even within this limit, the Corporation shall not generally sell loose bottles. 2.05 The Corporation would endeavour to have adequate stocks to meet any demand from buyers. In the unlikely event of shortage of any particular item, the depot manager would distribute the available quantity equitably amongst demanding buyers. In such cases, the buyer shall collect the stocks within two hours of receiving the intimation. If he does not turn up within the stipulated time, then such stocks may be allotted to the next wholesaler who has registered and is awaiting intimation from the Depot. 2.06 The Sales Invoices raised on the Buyer shall be subject to the terms stipulated in this policy. 3. Sale price 3.01 The price to be charged for the stock issued shall be as fixed by the Corporation periodically. The Corporation reserves its right to revise the sale price and such revised prices shall be effective on such dates as may be specified. 3.02 The depot manager shall provide a provisional extract of the ledger balance of the buyer as and when so requested which however, is subject to final confirmation by the Head Office. The buyer may seek clarifications in the sales invoices raised by the Corporation within three weeks of the sale. Corrective action as may be necessary would be taken based on the buyer’s representation. Generally, the Corporation would not entertain clarifications on the sales invoices raised after two months of the sale. 3.03 The Corporation is entitled to recover differences due to short billing, excess dispatches, price differences, short collection of TCS or any other reason, immediately after such instances are noticed by it. Such amounts if not paid immediately upon demand shall carry an interest of 14 percent per annum. Further the Corporation is entitled to adjust such amounts out of any payment received or out of any other credit lying in favour of the buyer. 4. Payment for stocks purchased 4.01 Issue of stocks shall be against a local Demand Draft or Pay Order or direct credit through account transfer in favour of the Corporation. No credit sale is allowed. 4.02 Demand drafts/Pay Orders issued by scheduled banks alone shall be accepted by the Corporation. Instruments issued by non-scheduled banks, including co-operative banks shall, generally not be accepted. 4.03 Buyers who have an account with any branch of designated banks may transfer the due amount in favour of the Corporation through a challan prescribed by the Corporation. Bank branches where such payment can be made is given in Annexure II and the account number of the Corporation with these banks is at Annexure III.



4.04 Buyers shall produce a portion of the challan with the confirmation of the bank to the concerned depot based on which goods would be issued. Buyers may note that confirmation in any other format or by an officer not authorised to issue such confirmation would not be entertained by the Corporation. 4.05 Return of the demand draft/pay order shall attract a penalty of Rs.1,000/- per instance, apart from other legal recourse that the Corporation may resort to. 4.06 Wholesale licensees may deposit a fixed amount and lift stocks against such deposit. The Corporation would not pay any interest for the deposit. They may replenish the deposit periodically. 5. Tax collection at source 5.01 The Income Tax Act 1961, under section 206C provides for tax collection at source. Tax would be collected at the time of receipt of amount for sale of goods, at 1% of the sale price (inclusive of excise duty and other applicable taxes). A surcharge and Education Cess is to be added as specified. However, these rates are subject to change from time to time. 5.02 Therefore, a part of the remittance made by the buyer shall be first appropriated towards tax to be collected. The tax so collected would be remitted by the Head Office and necessary certificates forwarded to concerned depots for onward transmission to buyers. Certificates shall be issued at the end of the relevant financial year. 5.03 The buyer is entitled to approach the Assessing Officer for issue of a certificate for tax collection at a rate lower than the one prescribed. The buyer may enclose the certificate from the Assessing Officer with a covering letter and authenticate the certificate by affixing his signature on its reverse, after which the Corporation shall act upon it. It may be noted that such certificate shall have to be in favour of the licensee. 5.04 The Corporation shall not refund excess tax collected (due to late submission of a certificate for reduced collection or any other reason) and buyers are advised to seek refund from income tax authorities. 5.05 A buyer who generally procures goods from a depot chooses to transact in another depot, shall approach the first depot and obtain a certificate indicating details of transactions undertaken by him, to facilitate collection of tax at source in the other depot. In the absence of such certificate the tax to be collected would be at the prescribed rates and no cognizance would be taken of any certificate for reduced tax collection issued by income tax authorities. 6. Bottle returns 6.01 Buyers may return empty beer bottles directly to the brewery. The brewery may accept the bottles so returned and prepare a Goods Receipt Note (GRN) in triplicate,



indicating the name and address of the buyer and the value of bottles accepted by the brewery. Amounts indicated in any document, other than the GRN, shall not be reckoned by the Corporation. 6.02 The GRN shall be produced in original to the depot, upon which the depot would pass a credit note crediting the buyer after effecting deductions towards TCS as per clause 5 above. The buyer may lift goods for the net amount so credited to his account. 7. Jurisdiction 7.01 Any sale made by the Corporation shall be subject to the exclusive jurisdiction of the Bangalore City Civil Court only, irrespective of where the cause of action or part of it arises. 8. Review of the policy 8.01 The above policy is subject to periodic review. If the circumstances so warrant, the Corporation may, at its sole discretion amend this policy and the same shall be binding on all buyers.


To i) All Primary & Composite Distilleries ii) All Manufacturers /Suppliers & Buyers iii) ED-1 / ED-2 iv) GM(S)/GM(N)/C(F)/A(F&A)/C(A) v) AGM(F)/AGM(LS)/MMIS vi) All IML Depot Managers vii) All Spirit Depot Managers viii) Circular – Master File



Annexure I

Details of the organisation of the buyer






Fax number



Fax number

Particulars of the other Directors/ Partners, if any (1)

(2) (3) (4) (5)

Details of the licence issued by the Excise Commissioner


(Name)



Annexure II Details of bank branches where direct credit can be made

UTI BANK :

Location Address M G Road Bangalore

No. 9, M.G. Road, Block ‘A” Bangalore – 560 001

Basaveshwaranagar Bangalore

Keers Plaze-2000 472, 80 Feet Main Road, Basaveshwara Nagar Bangalore – 560 079

Banashankari Bangalore

No. 369, 13th Cross 30th Main Road, C.T. Bed Extn Banashankari II Stage Bangalore – 560 070

Indiranagar Bangalore

No. 276, HAL II Stage 100 Feet Road, Indiranagar Bangalore – 560 038

Jayanagar Bangalore

55/5, 30th Cross, 13th Main 4th Block, Jayanagar Bangalore – 560 011

Chamarajpet Bangalore

Sri Ram Mandir Association No.114, 5th Main Road, 6th Cross, Chamarajpet, Bangalore – 560 018

Rajajinagar Bangalore

Vidhyavardhaka Sangha Sapta Shithama I Block, Rajajinagar Bangalore – 560 010

Belgaum

Ground Floor, CT.S. 5854, Congress Road, Tilakwadi Belgaum-500006

Davanagere No. 82, Renuka Extension Omkarappa Lane, P.B. Road Davanagere – 577 008

Hassan Ground Floor, Lalitha Krupa B.M. Road, Hassan

Hubli Kalburgi Plaza, 163/20, 'A' Main Road Deshpande Nagar, Hubli – 580 029

Mangalore Ground Floor, Essel Towers Bunts Hostel Circle, Mangalore 575001

Mysore Haripriya Complex, Temple Road V V Mohalla, Mysore 570002

Udupi 1st Floor, SIMAZ Diana Circle, Udupi



CANARA BANK :

Location Address BTM Layout Bangalore

57 & 58, BTM I Stage II Main, 100 ft. Road B.G. Circle, BTM Layout Bangalore – 560 076

Koramangala Bangalore

P.B. No. 3421, No. 348 100 ft. Road, 4th Block St. John Medical College Post Koramangala Layout Bangalore -560 034

Lavelle Road Bangalore

No. 4/1, Walton Road Lavelle Road Bangalore – 560 001

Madiwala Bangalore

21/01, Hosur Main Road Madiwala Bangalore – 560 068

Mahalakshmi Layout Bangalore

No. 18, 1st Main Road Mahalakshmi Layout Rajajinagar, Bangalore-560086

S.R. Nagar Bangalore

12/2, Lalbagh Road Sampangirama Nagar Bangalore – 560 027

Shanthinagar Bangalore

No. 18, K.H. Road Shanthinagar Bangalore-560 027

Yeshwantpur Bangalore

Bangalore-Tumkur Road No. 14, Industrial Suburb Yeshwantpur Bangalore – 560 022

Bangarpet

Site No.1, Sante Maidana Kolar Road, P B No.14 Bangarpet 563114

Bidar

I Floor, Mohan Market Building Near Bus Stand, Bidar 585401

Chickmagalore

PB No.19, 1535, Syed Street Chickmagalur-577101

Davanagere

M M K Complex 34/2-A, I Floor, PB No.228 Akkammadevi Road II Main, P J Extension Davangere - 577 002



CANARA BANK:

Hassan

P O No.45 Near Narasimharaja Circle Malnad House Hassan – 573 201

Koppal

P.B. No. 15 Quadri Brothers Building Salarjung Road Koppal – 583 231

Kushalnagar

Opp. Govt. Primary School B M Road Kuashalnagar – 571 234

Mandya

No.1572, K C M Building K R Road, Vidhya Nagar Opp. I.J.Girls College Mandya – 571 401

Raichur

P B No.17, Shanthi Bhavan 10-1-73, City Talkies Road Raichur – 584 102

Shimoga

P B No.38 Sri Basaveshwara Nilaya Nehru Road Shimoga – 577 201

Sirsi

P B No.9, C P Bazaar Sirsi – 581 401

Tumkur

P B No.39 3636/5256, Ashoka Road Tumkur – 572 101

Udupi Kavi Muddanna Marg Udupi 576101



ING VYSYA BANK :

Location Address Yeshwantpur Bangalore

157, R.M.C. Yard, 6th Main, 6th Cross Yeshwanthpur Bangalore – 560 022

Frazer Town Bangalore

152/1, Wheeler Road Fraser Town Bangalore – 560 005

Malleswaram Bangalore

No. 89, Sampige Road 11th Cross, Malleswaram Bangalore – 560 003

R.T. Nagar Bangalore

No.2/45, Dinnur Main Road R.T.Nagar Bangalore – 560 032

Vijayanagar Bangalore

19, Adichunchunagiri Shopping Complex, Vijayanagar Bangalore – 560 040

Bellary

No.38, NJSC Bangalore Road, Bellary

Bijapur

No. 952-B/20, Sangam Building S S Front Road Bijapur-586101

Chickmagalore 1130, Ramsunder Complex M.G. Road P.B. No. 87 Chickmagalore-577 101

Gulbarga

No.21, P.B. No. 6, Super Market, Gulbarga

Mysore 6 to 9, 1st Floor Dvarajurs Road Mysore-570001

Shimoga 1st Floor, Srinidhi Shopping Complex T. Shinappa Setty Circle Nehru Road Shimoga-577201



Annexure III

Bank account numbers of the Corporation to which direct credit is to be made

Sl. No. Name of the Bank Account Number

1 UTI BANK 009010200007849

2 CANARA BANK 51116

3 ING VYSYA BANK 123011006463





Sourcing policy for rectified spirit and denatured spirit for 2005-06

A detailed procedure for sourcing of rectified spirit and denatured spirit has been prescribed in various circulars issued by the Corporation from time to time. This circular supercedes all previous procedures, so far as it pertains to sourcing of rectified spirit and denatured spirit. Suppliers are requested to take note of the procedure prescribed in this circular which would come into effect from 1.7.2005. 1. Submission of initial documents 1.01 All manufacturers of RS/DS shall submit the following initial documents.

(i) Details of the organisation of the manufacturer to be given in its letter head in the format in Annexure I, along with a copy of the certificate of incorporation or partnership deed and registration from the registrar of firms as the case may be.

(ii) A certified copy of the licence granted by the Excise Commissioner under

rule 4 of the Karnataka Excise (Distillery and Warehouse) Rules, 1967.

(iii) Registration details, if any, under the Karnataka Sales Tax Act and/or the tax index number under VAT/Central Sales Tax Act.

(iv) Details of storage facility available for RS/DS as in format in Annexure-II

with copies of calibration certificates issued by the Department of Legal Metrology.

(v) A plan (sketch) of the storage yard/room and appurtenant facilities giving

details of location of tanks, piping system, access doors, main gate and other gates used for movement of tankers etc., duty certified by the Distillery Officer as required under clause 3 of Form-1 and clause 3A of Form No-1A of the Karnataka Excise (Distillery & Warehouse) Rules, 1967.

(vi) Details of authorised signatories of the manufacturer, who would deal with the

Corporation, to be given in its letter head as per the format in Annexure III.

(vii) An agreement as in the format in Annexure-IV, duly executed by the authorised signatory of the manufacturer in a stamp paper of denomination of Rs.100/-.



(viii) Certified copy of the latest audited accounts and annual report. If such

accounts pertain to a period other than the recently concluded financial year, reasons for not submitting the certified accounts of such year may be indicated.

1.02 A manufacturer who is a supplier of liquor to the Corporation and has submitted documents in accordance with Liquor Sourcing Policy shall submit all other documents, except (i), (ii) and (viii). 2. Basic Declared Price and Landed Cost 2.01 Manufacturers shall indicate the Basic Declared Price at which they are willing to deliver RS/DS to the Corporation. The Basic Declared Price so indicated by the manufacturer plus the applicable duties thereon shall be called the Landed Cost. The Corporation shall source RS/DS at the Landed Cost. 2.02 Manufacturers shall intimate their Basic Declared Price and the Landed Cost to the depot located in their premises in the form as in Annexure-V. A distinct cost sheet shall be given for each product to be issued by the manufacturer. Such declarations can be made one day prior to the date on which they would like the prices to be made effective. They are also free to alter the prices as frequently as they may desire, subject to the condition such changes are intimated to the depot one day in advance.

2.03 The Depot Manager in-charge of the depot shall obtain the declaration(s) in Annexure-V, enter necessary particulars in the system and give a confirmation copy of the prices so entered. 2.04 The categories of Basic Declared Prices that manufacturers may declare shall be as follows.

(i) Delivery of more than 3000 litres of RS/DS against one Order for Supplies

(OFS) shall be called bulk delivery. They may indicate their Basic Declared Price for bulk delivery.

(ii) Delivery of a quantity less than 3000 litres of RS/DS against one OFS shall be

called retail delivery. They may indicate a distinct Basic Declared Price for retail delivery.

2.05 The Corporation may charge a margin on the Landed Cost as may be specified from time to time to arrive at the Sale Price. Manufacturers may note the margin and price their produce accordingly. 2.06 In case of any change in the duty structure, new prices shall become effective from the date of issue of notification by government. The Corporation would make necessary changes in the Landed Cost and the Sale Price.



2.07 Manufacturers are obliged to deliver RS/DS at the Landed Cost corresponding to the indicated Basic Declared Price, except in cases of forward contracts. Violations may attract suitable action from the Corporation. 3. Declaration of stock available for delivery 3.01 As per the directive of the Excise Commissioner vide number ECE/138/RSA/ 2004 dated 31.08.2004 and 24.12.2004, manufacturers are required to declare details of molasses and spirit held by them in Form-01. A copy of Form-01 may be seen in Annexure-VI. A copy of such declaration duly attested by the Distillery Officer shall be delivered to the depot. 3.02 Rule 25 of the Karnataka Excise (Distilleries and Warehouse) Rules, 1967 stipulates a limit of 1% of wastage. Wastage in this context would imply quantity of spirit lost in process or during storage and issue. Such details would have to be declared by the distillery in the appropriate column in form no.1. 3.03 The declaration shall be received in the depot of the Corporation located in their distillery before 10 am everyday. Delay in giving the declaration may result in delay in transmission of details electronically to the head office and cause a consequent delay in the issue of Order for Supplies (OFS). 4. Captive consumption 4.01 The Manufacturer may, as allotted by the Excise Commissioner, draw spirit for any bonafide use or for the manufacture of potable or non-potable products. Such issue (called captive consumption) shall also be canalised through the Corporation. The Basic Declared Price indicated for bulk delivery shall be reckoned for computation of the margin payable to the Corporation. However, RS/DS shall be drawn by them only after following the procedure as detailed below. 4.02 For drawing the requisite quantity, the manufacturer shall submit the request countersigned by the concerned distillery officer, duly signed Annexure-VII and a copy of the allotment order of the Excise Commissioner to the depot. 4.03 The depot would supervise the drawal of spirit in the presence of distillery officer. The manufacturer shall thereafter forward a copy of the confirmation of the Distillery Officer certifying that the quantity drawn is as per Annexure-VII. Any margin payable to the Corporation for such quantity would be debited to the manufacturer and adjusted against payments due. 5. Forward contracts – supply against tenders 5.01 The Corporation would not participate in any tender inviting offers for supply of spirit, either within the country or outside. Manufacturers may respond to such



solicitations, clearly indicating that the spirit would be issued through the Corporation. If a manufacturer obtains an order for such supply, then it shall be specific to it. 5.02 Any agreement concluded between the manufacturer and the buyer shall contain the clauses indicated in Annexure VIII and a copy of the agreement shall be submitted to the Corporation for record. 5.03 In such cases, the price accepted by the buyer through the tender process shall deemed to be the Sale Price and the Landed Cost and the Basic Declared Price shall be computed taking due note of the margin of the Corporation and the duties payable. Any OFS issued shall be at the computed Landed Cost. 5.04 Except in cases of buyers of anhydrous ethanol, all other buyers shall be required to remit the sale consideration in advance as per the Sales Policy of the Corporation. In case of buyers of anhydrous ethanol, ordinarily, the credit period allowed would be 30 days from the date of delivery (please see para 9.08 below). Any delay in payment beyond that period shall attract interest at 12 percent per annum. 5.05 The buyer is at liberty to demand delivery at the destination. However, in such cases, the buyer may either have an agent to transport the consignment or designate the manufacturer as its agent. The agent/manufacturer would have to bear all transit risks and ensure transportation without misuse/tampering enroute. Any dispute that may arise in course of the transportation would have to be separately dealt with by the buyer and the agent/manufacturer. The Corporation shall not be a party to such disputes, as the ownership of the consignment would have passed on to the buyer immediately upon delivery at the distillery. 6. Forward contracts – negotiated supplies 6.01 Apart from responding to tenders, manufacturers may contact prospective customers and conclude contracts for issue of RS/DS at a predetermined price. In such cases, the validity and quantity of the contract shall be in accordance with the allotment order of the Excise Commissioner. A copy of the concluded contract shall be submitted to the Corporation for record. 6.02 The stipulations in paras 5.02 to 5.05 above shall apply to negotiated forward contracts. 7. Forward contracts – obligations of the manufacturer 7.01 The manufacturer shall be obliged to comply with the terms of the forward contract, including delivering RS/DS at the price contracted. In case of any breach of the contract, he shall be responsible for all consequences, including compensating the buyer, and shall keep the Corporation fully indemnified in this regard. In case of any breach by the buyer, the manufacturer shall have no claim against the Corporation.



7.02 The Corporation reserves its right to force specific performance of the forward contract, if in its opinion, the contract or the breach of the same is with an intention to circumvent or defeat its policies. It may, if the circumstances so warrant, arrange alternate supply of RS/DS to the buyer and recover any additional cost that may be so incurred from the manufacturer. 8. Issue of Order for Supplies 8.01 The head office of the Corporation in case of bulk delivery and the depot in case of retail delivery, shall place an Order for Supplies (OFS) to the manufacturer. A copy of the OFS (whether issued by the head office or the depot) shall be signed by the depot manager and delivered to the manufacturer while taking delivery. 8.02 The OFS would indicate the validity date within which the buyer shall take delivery of the item and the manufacturer is obliged to deliver the quantity indicated in the OFS to the buyer as indicated therein. 8.03 If any manufacturer fails to give delivery against an OFS issued by the Corporation, after the latter has made all arrangements to obtain delivery, the cost of arranging for delivery at Rs.1,000/- per day would be recovered. Manufacturers are therefore advised to inform well in advance about any likely delay/inability in honouring the OFS issued. 8.04 The Corporation shall have the discretion to foreclose/cancel the OFS issued. 8.05 Manufacturers may note that any pending OFS issued by the Corporation shall be honoured by them at the old prices. In case of revision in Landed Cost due to change in duties, pending OFS would be revised or cancelled and fresh OFS issued. 8.06 The Corporation is only a canalising agency and is not involved in the marketing of the produce. It would issue OFS to a manufacturer, as per the allotment order of the Excise Commissioner. It may therefore be noted that manufacturers cannot hold the Corporation responsible if no OFS is issued, leading to accumulation of RS/DS. It is up to them to undertake suitable measures as may be necessary. 9. Delivery

9.01 Manufacturers shall deliver RS/DS as per the OFS issued by the Corporation. It shall be their responsibility to remit applicable duties to government before giving delivery to the Corporation. 9.02 Delivery shall be during working hours of the depot, which shall ordinarily be between 10 am and 4 pm. Issue of stock before or after these hours shall be at the discretion of the depot manager and shall be exceptional. Necessary arrangements may be made by manufacturers to ensure that delivery is not hampered/denied to any buyer who comes during working hours.



9.03 In case of delivery of DS, the manufacturer shall use the denaturant as indicated by the buyer in accordance with rule 2(c) of the Karnataka Excise (Denatured Spirit and Denatured Spirituous Preparations) Rules, 1967. 9.04 Every vehicle coming for taking delivery shall be inspected by the manufacturer for its fitness for transportation of spirit. After satisfying the fitness, the vehicle shall be weighed before loading (the tare weight) and after loading (the gross weight). Copies of electronic print outs of the weights recorded shall be produced to the depot, only after which documents for sale would be released. 9.05 An exclusive invoice shall be raised by the manufacturer for every OFS issued and they shall invariably quote the reference number and date of the OFS issued by the Corporation in their invoice. The invoice rate shall be as indicated in the OFS. No revision in price, either contemplated or actually made effective, shall be reckoned for deliveries made for pending OFS.

9.06 Manufacturers shall note that while raising invoice for DS, “name and address of the end user”, as in OFS, shall be captured as “consignee”. The second copy of the invoice shall be forwarded to the consignee for reference and records. 9.07 Normally, delivery of the quantity indicated in an OFS shall be through a single invoice of the manufacturer. However, in exceptional cases, where the buyer has difficulties in taking delivery in one lot, more than one invoice for an OFS may be accepted.

9.08 The following documents shall be submitted while giving delivery.

(i) Details of duty remitted for the quantities delivered; (ii) Sales invoices for the quantity delivered; (iii) Copies of electronic print outs of weights recorded as per para 9.04; and (iv) Test certificate of the sample as in Annexure IX.

9.09 If the quantity of spirit issued is in excess of the quantity authorised by the Corporation (either for captive consumption or for outside users), such excess quantity cannot be termed as wastage. Such excess issue which is quite natural due to limitations of equipment and gauging shall be accounted in a supplementary authorisation for the difference between the quantity actually issued and the quantity originally authorised. The manufacturer would be responsible for remitting duty in respect of such difference quantity. 9.10 Ownership of RS/DS delivered to buyers shall pass on to them immediately after delivery at the depot. The buyer shall be responsible for transporting the delivered spirit to its premises of use. All risks during the transit would therefore be borne by the buyer. 10. Adherence to quality 10.01 The manufacturer is expected to ensure that the items delivered to the Corporation adhere to the quality as stipulated by the relevant standards of the Bureau of Indian Standards and/or other standards as may be applicable.



10.02 Manufacturers shall be liable for any action that may arise due to non adherence to quality parameters. They shall keep the Corporation indemnified at all times in this regard. 10.03 Every consignment delivered by the manufacturer shall be subjected to joint sampling. Two samples of 375 ml each shall be jointly drawn from each storage tank/vat from which the delivery is effected. If more than one tank/vat is used for delivery, then samples from each such tank/vat shall be drawn. These bottles shall be sealed, the identification label provided by the Corporation affixed, signed by the representative of the manufacturer and the depot manager and handed over to the depot. 10.04 After delivery of the consignment to the tanker, three samples of 375 ml each shall be jointly drawn from the delivered consignment by drawing samples from all the sub-tanks of the tanker, mixed and filled to bottles. Two of the samples shall be sealed, the identification label provided by the Corporation affixed, signed by the representative of the manufacturer and the depot manager and handed over to the depot. The third sample shall be tested by the manufacturer and a certificate as in Annexure-IX given to the depot before dispatch. 10.05 The Corporation may test the sample in its custody to confirm the declared test results. If the test result varies substantially, the third sample would be tested in a reputed laboratory and if such testing confirms the variation in quality, the Corporation may initiate such action as may be appropriate in the circumstances. 11. Payment for stocks sold 11.01 The Corporation shall pay the manufacturer only for the stocks sold to buyers. Unsold stock lying in the custody of the manufacturer shall not be eligible for any payment. 11.02 The amount payable to a manufacturer for the sales recorded between Monday and Saturday shall be computed and paid on Wednesday next. However, sales which have been made on credit basis shall be excluded for reckoning payment. Such amounts will be released on the Wednesday succeeding the day on which the payment is received from the buyer. 11.03 Any amounts to be recovered from the manufacturer shall be recovered out of the amounts payable. Any missing data due to delays/failures in electronic transfer of data shall be reckoned in the succeeding week and adjusted. 11.04 Payment by the Corporation would only be through a transfer directly to the bank account of the manufacturer. To facilitate such transfer, manufacturers/suppliers shall open an account with any one of the bankers to the Corporation or maintain an account with a bank having RTGS facility. No payment by any other mode is allowed. Details of the banks where the Corporation has its accounts may be seen in Annexure-X.



11.05 The Corporation would not be a party to any bill discounting or factoring arrangements that the manufacturer may enter into with his bank. 12. Accounts 12.01 The Corporation would provide details of transactions of a manufacturer in its website (www.ksbcl.com). They may verify the same and indicate variations, if any. Any adjustment necessary would be made after such verification. However, no such difference shall be entertained by the Corporation after two months of the close of the financial year. 13. Margin 13.01 There shall be no margin on the Landed Cost, at present. Thus the Sale Price shall be the same as the Landed Cost. 14. Jurisdiction 14.01 All transactions of the Corporation with the Manufacturer shall be subject to the exclusive jurisdiction of Bangalore. 15. Review of the policy 15.01 The above policy is subject to periodic review. If the circumstances so warrant, the Corporation may, at its sole discretion amend this policy and the same shall be binding on all manufacturers.


To i) All Primary & Composite Distilleries ii) All Manufacturers & Suppliers iii) ED-1 / ED-2 iv) GM(S)/GM(N)/C(F)/A(F&A)/C(A) v) AGM(F)/AGM(LS)/MMIS vi) All IML Depot Managers vii) All Spirit Depot Managers viii) Circular – Master File



Annexure I

Details of the organisation of the manufacturer/supplier

(To be given in the letter head of the organisation) Name of the organisation:





Fax number



Fax number


(1) (2) (3) (4) (5)


E mail id Particulars of the bank where payments are to be credited a) Name of the bank b) Branch c) Account number


(Name)



Annexure II

Details of RS/DS storage details

(to be given in the letter head of the organisation)

Sl. No.

Description of the product

Storage tank identity

Locking Enclosures

Yes/No

Capacity (in litres)

Calibrated on

1. 2. 3. 4.


(Name)



Annexure III

Details of authorised signatories to deal with the Corporation on behalf of the manufacturer


Name of the signatory Designation Address Telephone number Mobile number E mail id Specimen signature (1)

(2)

(1) (2)


(Name)



Annexure IV

Agreement to be executed by manufacturers located in the State

(To be executed in stamp paper of denomination Rs. 100/-)

AGREEMENT

This Agreement made at Bangalore on ………….. day of ................ Two Thousand Five ( / /2005) between the Karnataka State Beverages Corporation Limited having its registered office at “Seethalakshmi Towers”, No.78, Mission Road, Bangalore 560027 represented by its General Manager (Operations) Shri H.C. Ramesh Chand, (hereinafter called the ‘Corporation’) which term, unless, repugnant to the context, shall mean and include its executors, administrators, successors-in-interest, assigns, etc., of the ONE PART

AND M/s…………………………………………………………………………………………. represented by Shri………………………………………………. (hereinafter called the `Manufacturer’) which term, unless, repugnant to the context, shall mean and include its executors, administrators, successors-in-interest, assigns, etc., of the OTHER PART WHEREAS the Corporation registered under the Companies Act, 1956, is a Government Company within the meaning of Section 617 of the said Act. WHEREAS the Corporation is a licensee under Rule 3(11) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968. WHEREAS the Manufacturer is a licensee under Rule 4 of the Karnataka Excise (Distillery and Warehouse) Rules, 1967. WHEREAS under rule 31A of Karnataka Excise (Distillery and Warehouse) Rules, 1967, the Manufacturer as a licensee under the relevant rules shall issue Rectified Spirit or Denatured Spirit (both of which are hereinafter collectively and severally referred to as ‘Spirit’) only to the Corporation. WHEREAS the parties herein have entered into this Agreement for the issue of Spirit on the following terms and conditions. NOW THIS AGREEMENT WITNESSETH AS FOLLOWS: 1. Stock available for issue 1.1 The Manufacturer shall, in accordance with the procedure stipulated by the

Corporation from time to time, declare the stock available for issue and the price of issue.



1.2 The quantity of Spirit to be issued shall be in accordance with the allotment order

of the Excise Commissioner. 1.3 The Manufacturer shall not claim the right of issue of Spirit to the Corporation. 2. Delivery 2.1 The Manufacturer shall deliver Spirit to the Corporation for onward delivery to

the buyer in accordance with the Order for Supplies (OFS) issued by the Corporation.

2.2 The quantity of Spirit delivered shall be measured by appropriate means and/or

weighing the receptacle/vehicle before and after delivery. 2.3 Delivery shall be in line with the Orders for Supplies placed by the

Corporation and shall be completed within the period specified by the Corporation.

2.4 Non-delivery and/or repeated delays in adhering to the delivery schedule may

entail in recall of the pending Orders for Supplies and may attract other penalties as may be imposed by the Corporation.

3. Captive consumption 3.1 The Manufacturer may, as allotted by the Excise Commissioner, draw Spirit for

any bonafide use or for the manufacture of potable or non-potable products. 3.2 The Corporation may impose such conditions, as may be reasonable, on the

captive consumption of the Manufacturer 4. Quality 4.1 The Spirit issued shall adhere to the quality as stipulated by the relevant standards

of the Bureau of Indian Standards and/or other standards as may be applicable. 4.2 The Manufacturer shall test samples of Spirit delivered and declare the test results

to the Corporation. The Corporation may also test such samples and if the result as declared by the Manufacturer varies substantially from the results obtained by its testing, the Corporation may initiate such action as may be necessary.

4.3 The Manufacturer shall be responsible for the quality and quantity of Spirit

issued. Any disputes/claims arising from the delivery of Spirit to the buyer, shall be settled by the Manufacturer.



5. Participation in tenders 5.1 The Manufacturer may participate in tenders solicited by users of Spirit either

within the country or outside. While the Manufacturer is free to quote a price for Spirit, he shall clearly indicate that issue of Spirit shall be through the Corporation and is subject to the policies of the Government and the Corporation prevailing from time to time.

5.2 The Manufacturer shall be responsible for adhering to the conditions/

commitments of the tender. He shall be liable for any consequence arising out of noncompliance of such conditions/commitments and shall keep the Corporation fully indemnified in this regard.

5.3 Save in cases specifically exempted by the Corporation, the Manufacturer shall

not accept supply of Spirit on credit. In such cases where credit delivery is allowed by the Corporation, the Manufacturer shall be entitled for receiving payment for Spirit issued only after the buyer makes such payment to the Corporation.

5.4 In case of forward contracts for issue of Spirit at a predetermined price, the

validity and quantity of the contract shall be in accordance with the allotment order of the Excise Commissioner.

5.5 The Corporation shall have right to enforce specific performance of the forward

contract, where the contract or the breach of the same is with an intention to circumvent or defeat its policies. If warranted, the Corporation would arrange alternate supply of Spirit to the buyer and recover any additional cost incurred from the Manufacturer.

6. Export of spirit 6.1 The Manufacturer may export Spirit to other States only through the Corporation

including to their own units and such export shall be in accordance with the allotment order of the Excise Commissioner.

7. Cancellation of orders 7.1 The Corporation shall, without prejudice to its legal rights, have the right to

forthwith terminate any or all Order for Supplies placed on the Manufacturer and forfeit deposits, if any, if the Manufacturer or any of his representatives, workers, employees, agents, etc.,

(a) indulge in any activity which is directly or indirectly prejudicial to the

interest of the Corporation; or



(b) indulge in forgery, falsification, fabrication of any document, bill, voucher or delivery challan or commit any offence in connection with the manufacture and supply of Spirit, which offence is punishable under law.

7.2 All losses incurred by the Corporation on account of the Manufacturer, his agents, workmen, employees, etc. committing the above said prohibited acts, shall be recovered from the Manufacturer.

7.3 If the Manufacturer indulges in any unfair trade practice, the Corporation shall

have the right to cancel the Order for Supplies placed on the Manufacturer. 8. Price 8.1 Manufacturers shall indicate the Basic Declared Price at which they are willing to

deliver Spirit to the Corporation. The Basic Declared Price so indicated by the Manufacturer plus the applicable duties thereon shall be called the Landed Cost. The Corporation shall source Spirit at the Landed Cost.

8.2 In case of forward contracts/supply against tenders, the price accepted by the

buyer shall be the sale price, representing the basic declared price plus the applicable duties thereon and the margin of the Corporation, if any.

9. Payment 9.1 Payment for the Spirit delivered shall be subject to any periodicity that may be

specified by the Corporation. 10. Facilities to be offered 10.1 The Manufacturer shall offer all facilities to the Corporation and the respective

depots established at their premises to supervise the activities relating to issue of spirit. More particularly, the Corporation shall have unhindered access to all manufacturing and appurtenant facilities for recording details as per the administrative instructions of the Excise Commissioner issued from time to time.

11. Compliance with laws

11.1 The Manufacturer/Supplier shall comply with the requirements of all laws, which

are applicable for him, including timely remittance of tax dues and filing of returns.

12. Force majeure 12.1 Upon the occurrence of any event of force majeure, the Party being affected by

such event shall, without delay, notify the other Party in writing.



12.2 In the event of any failure in performance due to any force majeure condition, such as war, strike, fire, natural disaster, or any other cause whatsoever beyond the control of the Party being affected, the Party so failing shall, to that extent, be exempted during the period of such happening from the liabilities that would otherwise result from its failure. The occurrence of the event of force majeure will not relieve either party from performing its obligations at such times and to the extent as may be possible after the intervention of the event of force majeure.

13. Arbitration

13.1 Any dispute, which may arise between the Parties herein shall be submitted to

arbitration. The arbitral award shall be conclusive, final and binding on both the Parties herein. The Manufacturer/Supplier has agreed with the Corporation to provide for the nomination of a sole arbitrator by the Corporation only from amongst the following:

(a) Any retired Judge of the Hon’ble Supreme Court of India ; or (b) Any retired Judge of the Hon’ble High Court of Karnataka.



14. Indemnity

14.1 The Manufacturer shall keep the Corporation harmless and indemnified in all

matters arising from the issue/delivery of Spirit to the Corporation and its buyers. Any third party claims arising from any user shall be settled by the Manufacturer at his cost.

14.2 Without prejudice to the generality of the circumstances contained in 14.1, the

Manufacturer shall specifically indemnify the Corporation and keep it harmless with respect to

(i) Non-compliance with the standards specified by the Corporation;

(ii) Non-conformation to the provisions of various laws in force; and

consequences, losses or claims (including claims of additional duty raised by the Government of Karnataka) more specifically, the non-remittance and short remittance towards the duties statutorily payable.

(iii) Quality claims that may be raised by any user or the ultimate consumer of

Spirit.

(iv) Claims for damages that may be raised by any user or the ultimate consumer due to delay in delivery of Spirit by the Manufacturer.



(v) Any claims from buyers under the forward contracts entered into between

the manufacturer and buyer as per clause 5-7 of the Sourcing Policy of the Corporation for Rectified Spirits/Denatured Spirits and/or as per clause 3-5 of the Sales Policy of the Corporation for Rectified Spirits/Denatured Spirits.

15. Jurisdiction 15.1 Both the parties are amenable to the exclusive jurisdiction of the Bangalore City

Civil Court only irrespective of where the cause of action or a part of it arises. 16. Damages 16.1 Notwithstanding any clause hereinabove, the Manufacturer is liable to

compensate the Corporation for any loss suffered by it due to any act of commission or omission by the Manufacturer.

IN WITNESS WHEREOF, the Corporation and Manufacturer have set and subscribed their signatures and seals on the day, month and year aforementioned in the presence of the following attesting witnesses for Karnataka State Beverages Corporation Limited H.C. Ramesh Chand General Manager (Operations)

for Manufacturer/Supplier

Witnesses: 1.

2.



Annexure V

Declaration of Basic Declared Price of RS/DS by the manufacturer

(To be given in the letter head of the manufacturer) (i) Basic Declared Price of RS and other spirits

Category of delivery

Particulars

Bulk Retail (i) Basic Declared Price of the manufacturer

(ii) Duty as applicable (iii) Landed Cost to KSBCL [(i)+(ii)]

(ii) Basic Declared Price of DS

Category of delivery

Particulars

Bulk Retail (i) Basic Declared Price of the manufacturer

(ii) Cost of denaturant (iii) Duty as applicable

(a) CED (at 16%) (b) Cess on CED (at 2%) (c) Litre fee (d) Transport fee (e) Permit fee (f) Others

(iv) Landed Cost to KSBCL [(i)+(ii)+(iii)] Place: Sd/- Date: Authorised signatory

(Name)



Annexure VI

Format for declaration of stock available

FORM NO.01

Distillery Name Date

Sl. No.

Item On the day of report

From 1st of the month

From 1st Julyto date of report

I

MOLASSES

1 Opening balance 2 Receipt from sugar factory attached to the distillery 3 Receipt from other sugar factories and Khandsari

units

4 Total 1+2+3 5 Issues for distillation Grade A Grade B Grade C Total 6 Closing Balance Grade A Grade B 7 Total 8 Storage losses II

RECTIFIED SPIRIT (Above 66 op)

1 Opening balance Production 2 Redistilled

3 Total Issues (details given below) Sl. No.

Name of licence

Allotment order no.

Purpose

Arrack Redistilled IML

4

Chemical/Manufacture of DS



Sl. No.




Others Export

5 Total 6 Closing Balance 7 Storage Losses III RECTIFIED SPIRIT (Below 65 op) 1 Opening Balance 2 Production in distillery 3 Total

Issues (details given below) Sl. No.

Name of licence

Allotment order no.

Purpose

Arrack Redistilled IML Chemical/Manufacture of

DS Others

4

Export

5 Closing Balance 6 Storage Losses IV DENATURED SPIRIT 1 Opening balance 2 Quantity of RS below/above 65 UP received for DS 3 Absolute alcohol received for DS 4 Quantity of DS manufactured Total

Issues (details given below) Sl. No.

Name of licence

Allotment order no.

Purpose

5



Sl. No.




6 Closing Balance 7 Losses V NEUTRAL SPIRIT 1 Opening balance 2 Quantity of RS received from distillery for distillation 3 Quantity of Neutral spirit manufactured 4 Quantity of RS below 65 op manufactured 5 Quantity of NS received from distillery and other

distilleries

6 Total Issues (details to be given) Sl. No.

Name of licence

Allotment order no.

Purpose

Others

7

Export

8 Total 9 Closing balance 10 Losses VI ABSOLUTE ALCOHOL 1 Opening balance 2 Production in the distillery 3 Total

Issues (details to be given) Sl. No.

Name of licence

Allotment order no.

Purpose

4

Total 5 Closing balance 6 Storage Losses VII MALT SPIRIT 1 Opening balance 2 Production in the distillery



Sl. No.




3 Total Issues (details to be given) Sl. No.

Name of licence

Allotment order no.

Purpose

4

Total 5 Closing balance 6 Storage losses

Signature of the Distillery Officer Signature of the Licensee



Annexure VII

Request for drawing RS/DS for captive consumption

(To be given in the letter head of the manufacturer) Request number ………… (to be serially numbered for the year) Request date Allotment Order of Excise Commissioner Reference No. date Validity Quantity allotted (bulk litres) : Details of Quantity utilised (bulk litres) against Allotment Order:

Sl. No


Date of Drawal

Quantity as per Annex-VII

Actual Quantity drawn

Details of duty remitted

Total Balance quantity (bulk litres) available : Proposed Quantity (bulk litres) to be drawn :

Sl. No


Purpose Quantity to be drawn

Proposed Date

Details of duty remitted

Total Place: Sd/- Date: Authorised signatory

(Name)



Annexure VIII

Clauses to be incorporated in the agreement between the buyer and the manufacturer selected through a tender/negotiation process

1) The parties hereby agree that the seller shall issue and the buyer shall purchase rectified spirit/denatured spirit as the case may be only through the Karnataka State Beverages Corporation Limited, the distributor licensee under the Karnataka Excise Act and Rules made thereunder. 2) The seller shall be liable for any consequences arising out of non-compliance of such conditions/commitments of the contract and he shall keep the Corporation full indemnified for any consequences that would arise due to breach of contract by either of the parties. 3) More specifically, the Corporation shall not be liable and shall be kept indemnified by the seller at all times against any claims for losses/damages due to non-delivery of spirit by the seller or default in payment of contracted price by the buyer.



Annexure IX

Certification of RS/DS delivered (To be given on the letter head of the manufacturer)

Date & time of dispatch Vehicle number Fitness of the vehicle Satisfactory / Poor KSBCL OFS No. Manufacturers invoice number and date Serial No. of the security seals in the vehicle Type of spirit Quantity delivered Temperature of the delivery Strength of spirit (in 0 OP) Specific gravity of spirit delivered Tare weight of the vehicle (in kgs) Gross weight of the vehicle (in kgs) Weight of the spirit delivered (in kgs) Place: Sd/- Date: (Authorised signatory)



Annexure X

Details of banks where the Corporation has its accounts

Sl.No. Name of the bank Name of the branch 1

Canara Bank

Avenue Road Branch Bangalore – 560 002

2

Corporation Bank

K.H. Road, Shanthinagar Bangalore-560027

3

IDBI Bank

Sarakki Branch, J.P. Nagar Bangalore-560078

4

ING Vysya Bank Limited


5

UTI Bank

M.G. Road Bangalore-560001





Sales policy for rectified spirit and denatured spirit for 2005-06

A detailed procedure of sales policy for rectified spirit and denatured spirit has been prescribed in various circulars issued by the Corporation from time to time. This circular supercedes all previous procedures, so far as it pertains to sale of rectified spirit and denatured spirit. Buyers are requested to take note of the procedure prescribed in this circular which would come into effect from 1.7.2005. 1. Categorisation of buyers 1.01 Buyers of RS would be categorised as under.

(i) Bulk buyers like IML and arrack manufacturers and other licencees sourcing more than 3000 litres in an instance.

(ii) Retail buyers (RS1, RS2 and RS6 licencees) sourcing less than 3000 litres in

an instance.

(iii) Buyers of all other spirits other than denatured spirit, would be categorised as bulk buyers irrespective of the quantity

1.02 Buyers of DS would be categorised as under.

(i) Bulk buyers holding DL2 or DL3 licence sourcing more than 3000 litres in an instance.

(ii) Retail buyers holding a DL2 or DL 3 licence sourcing less than 3000 litres in

an instance. 2. Submission of initial documents 2.01 All buyers of RS/DS desirous of procuring RS/DS from the Corporation shall submit the following documents, before their request can be considered and action initiated.

(i) A certified copy of the licence issued by the competent authority under the RS rules or the DS rules and a copy of the licence granted by the Excise Commissioner under rule 4 of the Karnataka Excise (Distillery and Warehouse) Rules, 1967 as may be applicable.



(ii) Registration details, if any, under the Karnataka Sales Tax Act and/or tax

index number under VAT/the Central Sales Tax Act. (iii) Allotment order from the competent authority specifying the quantity of

RS/DS that can be sourced.

2.02 In addition to the above, bulk buyers of RS/DS are required to give the following documents.

(i) Details of the organisation of the buyer to be given in its letter head in the format in Annexure-I.

(ii) Details of authorised signatories to deal with the Corporation to be given in its

letter head as per the format in Annexure-II.

(iii) Certified copy of the latest audited accounts and annual report. If such accounts pertain to a period other than the recently concluded financial year, reasons for not submitting the certified accounts of such year may be indicated.

2.03 Retail buyers of RS/DS shall submit the aforesaid documents to the depot from where they intend to source RS/DS. Bulk buyers of RS/DS shall submit these documents to the head office of the Corporation. 2.04 A bulk buyer of RS who is a supplier of IML to the Corporation and has submitted initial documents in accordance with the Liquor Sourcing Policy 2005-06 need not submit documents 2.01 (i) and 2.02 (i) and (iii) above. All other documents shall be submitted. 3. Forward contracts – inviting offers for supply 3.01 The Corporation would not participate in any invitation for offers for supply of RS/DS solicited by buyers. Buyers may invite offers for supply from manufacturers in the state; however, the manufacturer selected by the buyer shall issue RS/DS only through the Corporation. 3.02 The supply price quoted by the manufacturer in response to the tender shall be the Sale Price of RS/DS of the Corporation. Special conditions regarding payment and delivery in such cases may be noted by buyers calling for offers. 3.03 Any agreement concluded between the manufacturer and the buyer shall contain the clauses indicated in Annexure III and a copy of the agreement shall be submitted to the Corporation for record.



3.04 Except in cases of buyers of anhydrous ethanol, all other buyers shall be required to remit the sale consideration in advance (please refer para 8). In the case of buyers of anhydrous ethanol, ordinarily, the credit period allowed would be 30 days from the date of delivery (please see para 10.06 below). Any delay in payment beyond that period shall attract interest at 12 percent per annum. 3.05 The buyer is at liberty to demand delivery at the destination. However, in such cases, the buyer may either have an agent to transport the consignment or designate the manufacturer as its agent. In such cases, the agent/manufacturer would have to bear all transit risks and ensure transportation without misuse/tampering enroute. Any dispute that may arise in course of the transportation would have to be separately dealt with by the buyer and the agent/manufacturer. The Corporation shall not be a party to such disputes, as the ownership of the consignment would have passed on to the buyer immediately upon delivery at the distillery. 4. Forward contracts – negotiated supplies 4.01 Apart from responding to tenders, buyers may contact prospective manufacturers and conclude contracts for issue of RS/DS at a predetermined price. In such cases, the validity and quantity of the contract shall be in accordance with the allotment order of the Excise Commissioner. A copy of the concluded contract shall be submitted to the Corporation for record. 4.02 The stipulations in paras 3.02 to 3.05 above shall apply to negotiated forward contracts. 5. Forward contracts – obligations of the buyer 5.01 The buyer shall be obliged to comply with the terms of the forward contract, including sourcing RS/DS at the price contracted. In case any of any breach of the contract, he shall be responsible for all consequences, including compensating the manufacturer, and shall keep the Corporation fully indemnified in this regard. In case of any breach by the manufacturer, the buyer shall have no claim against the Corporation. 5.02 The Corporation reserves its right to force specific performance of the forward contract, if in its opinion, the contract or the breach of the same is with an intention to circumvent or defeat its policies. It may, if the circumstances so warrant, allow issue of RS/DS by the manufacturer to alternate buyers and any loss so incurred by the manufacturer shall be recovered from the buyer. 6. Request for sourcing RS/DS 6.01 Buyers shall submit the following documents for sourcing RS.

(i) Order of the Excise Commissioner permitting sourcing of RS; (ii) Sale value of the RS proposed to be sourced (remitted as per para 8 below).



(iii) Request letter for providing security guard to escort the vehicle on the scheduled date of delivery.

6.02 Buyers of DS shall submit the following documents for sourcing DS.

(i) Order of the Excise Commissioner permitting sourcing of DS; (ii) Details of denaturant in accordance with rule 2 (c) of the DS rules; and (iv) Sale value of the DS proposed to be sourced (remitted as per para 8 below). (v) Request letter for providing security guard to escort the vehicle on the

scheduled date of delivery.

6.03 Bulk buyers of RS/DS shall submit these documents to the head office of the Corporation and retail buyers to the depot from where they intend to source RS/DS. 7. Sale price 7.01 Sale price of RS/DS shall be at a margin over the Landed Cost. Landed cost shall mean the Basic Declared Price indicated by the seller from time to time plus the applicable duty thereon. Thus the sale price would vary across various primary distilleries. 8. Payment for stocks purchased 8.01 The Corporation does not allow credit sale of RS/DS to any buyer, except in cases mentioned in para 3.04 above. 8.02 Sale to retail buyers of RS/DS shall be against a Demand Draft or a Pay Order drawn in favour of the Corporation payable at Bangalore, delivered at the depot. 8.03 Bulk buyers of RS/DS may pay the sale consideration through a Demand Draft/Pay Order payable in Bangalore. In the alternative, they may transfer the sale consideration directly to the bank account of the Corporation as indicated in Annexure-IV. 8.04 Buyers may deposit a fixed amount through either of the modes described above and obtain spirit against such deposit. The Corporation would not pay any interest for the deposit. They may replenish the deposit periodically. 8.05 Demand drafts/Pay Orders issued by scheduled banks alone are accepted by the Corporation. Instruments issued by non scheduled banks, including co-operative banks shall not be accepted. Return of the demand draft/pay order shall attract a penalty of Rs.1000/- per instance, apart from other legal recourse that the Corporation may resort to. 8.06 For a direct transfer, bulk buyers are required to maintain an account with the bankers to the Corporation and issue instructions for the transfer through a prescribed challan. The account number to which the amount has to be directly transferred may be



seen in Annexure IV. A portion of the challan with the confirmation of the bank shall be submitted to the head office of the Corporation. Buyers may note that confirmation in any other format or by an officer not authorised to issue such confirmation would not be entertained by the Corporation. 8.07 Buyers who are suppliers of IML to the Corporation may request for retention of a specified amount out of the payment due to them for IML sold. Such request shall be accompanied by instructions to the bank in the prescribed challan. 8.08 In case of the same legal entity (as in the case of manufacture of IML by another unit of the manufacturer) the margin amount, as may be applicable shall be remitted. In such cases, no payment will be due to the seller and hence no sale consideration need be paid. To ascertain that the transaction is within the same legal entity, necessary documentary proof to this effect shall be produced by the buyer. 9. Issue of Order for Supplies 9.01 The head office of the Corporation, in case of bulk buyers of RS/DS shall place an Order for Supplies (OFS) to the supplier in accordance with allotment order of Excise Commissioner and will be transmitted electronically to KSBCL depot located at the distillery. 9.02 An authorisation for issue of permit (AFIP) shall be issued to the bulk buyer of RS/DS to facilitate obtaining a transport permit for the transportation of RS/DS. 9.03 In case of retail buyers of RS/DS, the depot concerned shall place an OFS to the supplier and issue the AFIP to the buyer. 9.04 Every OFS issued by the Corporation shall have a validity period within which the buyer shall take delivery of RS/DS. 9.05 Request for issue of OFS on emergent basis would be entertained only on an exceptional basis. Buyers may, under normal circumstances, ensure that they submit documents with at least three days validity. Further, requests given before 12.00 noon would be entertained and the OFS issued on the same day, which may be collected at 4.00 PM. Requests given beyond 12.00 noon would be considered subsequently and the OFS issued at 11.00 AM on the following day. 10. Delivery 10.01 RS/DS shall be issued to buyers during working hours of the depot, which shall ordinarily be between 10 am and 4 pm. The following documents shall be submitted by the RS buyer to the depot for obtaining delivery.

(i) In case of IML and arrack manufacturers, a copy of the spirit allotment order of the Excise Commissioner and copies of relevant parts of the transport permit.



(ii) In case of other bulk buyers, copy of Part II of the transport permit, copy of Part-II of the requisition in Form RS (3) .

(iii) In case of retail buyers, copy of Part-II of the transport permit and copy of Part-II of the requisition in Form RS (3).

(iv) In case of transport under bond, copies of Part-II of Form RS (8). 10.02 The depot shall verify that the documents submitted are in order and arrange for delivery. 10.03 A buyer of DS shall apply for grant of transport permit from the distillery to the destination. Such permit shall be applied by the buyer under rule 16 (2) of the DS rules. A bulk buyer shall thereafter submit copy of Part II of Form DL 18, copy of Part IV of the transport permit in Form DL 23. The retail buyer shall also submit the above documents for obtaining delivery. 10.04 Buyers may note that failure to obtain delivery within the validity period of the OFS may result in a levy of Rs. 1000 as penalty. If for some reason buyers are unable to take delivery within the validity period of the OFS, they may inform the head office/concerned depot for cancellation of the OFS. 10.05 Since the Corporation has to arrange for personnel to accompany the tanker, delivery of RS/DS is normally possible only after a lapse of one day from the date of issue of OFS. Buyers may therefore refrain from insisting upon giving delivery immediately after issue of OFS. More particularly, dispatch of tankers in advance, which keep waiting outside the distillery premises and demanding delivery immediately after issue of OFS, well after 4.00 PM shall be avoided. Delivery beyond 4.00 PM shall be only under exceptional circumstances. 10.06 The buyer shall strictly ensure that the containers/tankers deployed by them for taking delivery of the consignment are totally clean and are free from any contamination. The Corporation would refuse delivery, if it finds that the tanker is unfit for transportation of spirit. 10.07 Ownership of RS/DS delivered to buyers shall pass on to them immediately after delivery at the depot. Buyers are therefore advised to verify the goods before accepting delivery. No claim for damages shall be entertained after the handing over. 10.08 The buyer of DS shall collect the second copy of the invoice raised by the manufacturer for availing CENVAT benefit. 10.09 The buyer shall be responsible for transporting the delivered spirit to its premises of use. All transit risks would be borne by the buyer, who shall be responsible to ensure that the consignment is not tampered with or misused. Any tampering/misuse enroute shall attract action under the Karnataka Excise Act, 1962. The buyer shall provide reasonable facility to the transit security personnel of the Corporation who may accompany the consignment.



10.10 The Corporation shall be at liberty to secure the container transporting the spirit with one-time locks (OTLs). Accordingly, the buyer shall ensure that the tankers deployed by them shall have adequate facility for securing with seals/OTLs and that the secured container or the security locks/seals/OTLs are not tampered with. Upon receipt of the consignment in its premises of the buyer, he shall certify that the same was received intact. 10.11 The buyer shall promptly arrange for unloading of the consignment on the day of receipt if it reaches during working hours. If not, the consignment shall be unloaded on the next working day. In the event of any delay, beyond the permissible limit, the Corporation, at its sole discretion, shall levy a penalty of Rs.1000/- per day per fleet of tankers escorted by the security personnel provided by the Corporation. 11. Quality 11.01 The Corporation is a canalising agency and is not responsible for the quality of RS/DS delivered through it. Buyers are therefore advised to satisfy themselves about the quality and strength of the RS/DS delivered. No claim for damages due to any deficiency in quality shall lie against the Corporation. 11.02 The buyer shall, immediately after the consignment is received at the destination, draw three samples of 375 ml each of the received item by drawing samples from all the sub-tanks of the tanker, mixed and filled to bottles. Two of the samples shall be sealed, the identification label provided by the Corporation affixed, signed by the representative of the buyer, the excise official if present and the escort personnel and handed over to the escort personnel. The third sample shall be tested by the buyer and a certificate as in Annexure-V given immediately. A copy of the excise verification certificate shall also be handed over. 12. Margin 12.01 There shall be no margin on the Landed Cost, at present. Thus the Sale Price shall be the same as the Landed Cost. 13. Accounts 13.01 The depot manager shall provide a provisional extract of the ledger balance of the buyer as and when so requested which however, is subject to final confirmation by the head office. The buyer may seek clarifications in the sales invoices raised by the Corporation within four weeks of the sale. Corrective action as may be necessary would be taken based on the buyer’s representation. Generally, the Corporation would not entertain clarifications on the sales invoices raised after four weeks of the sale. 13.02 The Corporation is entitled to recover differences due to short billing immediately after such instances are noticed by it. Such amounts if not paid within seven days of



raising the demand shall attract interest at 14 percent per annum. Further, the Corporation is at liberty to adjust such amounts out of any other credit lying in favour of the buyer and suspend sales to the buyer defaulting in paying the difference amount. 14. Jurisdiction 14.01 Any sale made by the Corporation shall be subject to the exclusive jurisdiction of Bangalore city civil court only, irrespective of where the cause of action or part of it arises. 15. Review of the policy 15.01 The above policy is subject to periodic review. If the circumstances so warrant, the Corporation may, at its sole discretion amend this policy and the same shall be binding on all buyers.


To i) All Primary & Composite Distilleries ii) All Manufacturers /Suppliers & Buyers iii) ED-1 / ED-2 iv) GM(S)/GM(N)/C(F)/A(F&A)/C(A) v) AGM(F)/AGM(LS)/MMIS vi) All IML Depot Managers vii) All Spirit Depot Managers viii) Circular – Master File



Annexure I

Details of the organisation of the buyer







Fax number



Fax number


(1) (2) (3) (4) (5)


E mail id Bank particulars a) Name of the bank b) Branch c) Account number


(Name)



Annexure II

Details of authorised signatories to deal with the Corporation on behalf of the buyer

(To be given in the letter head of the organisation) Name of the signatory Designation Address Telephone number Mobile number E mail id Specimen signature (1)

(2)

(1) (2)


(Name)



Annexure III

Clauses to be incorporated in the agreement between the buyer and the

manufacturer selected through a tender/negotiation process

1) The parties hereby agree that the seller shall issue and the buyer shall purchase rectified spirit/denatured spirit as the case may be only through the Karnataka State Beverages Corporation Limited, the distributor licensee under the Karnataka Excise Act and Rules made thereunder. 2) The seller shall be liable for any consequences arising out of non-compliance of such conditions/commitments of the contract and he shall keep the Corporation full indemnified for any consequences that would arise due to breach of contract by either of the parties. 3) More specifically, the Corporation shall not be liable and shall be kept indemnified by the seller at all times against any claims for losses/damages due to non-delivery of spirit by the seller or default in payment of contracted price by the buyer.



Annexure IV

Account numbers of the Corporation for credit of amounts by bulk buyers Sl.No. Name of the bank Name of the branch

1

Canara Bank

Avenue Road Branch Bangalore – 560 002

2

Corporation Bank


3

IDBI Bank

Sarakki Branch, J.P. Nagar Bangalore-560078

4

ING Vysya Bank Limited


5

UTI Bank

M.G. Road Bangalore-560001



Annexure V

Certification of RS/DS delivered (To be given in the letter head of the buyer)

Date and time of receipt Date and time of unloading Vehicle number Serial number of the security seals in the vehicle Details of security seals tampered/missing, if any KSBCL sale invoice number Type of spirit Quantity received Temperature of the received spirit Strength of spirit (in 0 OP) Specific gravity of spirit Tare weight of the vehicle (in kgs) Gross weight of the vehicle (in kgs) Weight of the spirit delivered (in kgs) Place: Sd/- Date: (Authorised signatory)

(Name)





Import policy for rectified spirit and denatured spirit for 2005-06

A detailed procedure for sourcing of rectified spirit and denatured spirit has been prescribed in various circulars issued by the Corporation from time to time. This circular supercedes all previous procedures, so far as it pertains to import of rectified spirit and denatured spirit. If any procedure is not explicitly mentioned herein, the procedure prescribed in the sourcing and sales policies for RS and DS would be followed. Suppliers and buyers are requested to take note of the procedure prescribed in this circular which would come into effect from 1.7.2005.

1. Buyers eligible to import 1.01 Only bulk buyers of RS/DS would be eligible to import RS/DS.

2. Request for import

2.01 A bulk buyer of RS/DS shall submit the following documents to the head office of the Corporation.

(i) A No Objection Certificate and/or Import permit from the Excise Commissioner allowing import;

(ii) The distillery from where the import is proposed along with a consent letter of the supplier and details of selling price in the format in Annexure I;

(iii) A demand draft payable in Bangalore for the sale consideration or the confirmation portion of the prescribed challan for having remitted the amount.

3. Issue of Order for Supplies

3.01 The Corporation would issue an Order for Supplies (OFS) to the supplier from whom the buyer wishes to import RS/DS. Details of the OFS issued shall be given to the buyer. 3.02 The validity of the OFS issued shall be in accordance with the import permit issued and the supplier shall deliver RS/DS within the validity period. 3.03 If the terms of payment so require, the Corporation would issue a demand draft in favour of the supplier for the value of RS/DS proposed to be imported.



3.04 The supplier shall promptly fax, within one hour of dispatch of goods, details as per Annexure-II. 4. Delivery 4.01 The importer shall take delivery of the consignment as an agent of the Corporation and transport the same. All transit risks shall therefore be borne by the importer. Upon the consignment reaching its destination, the Corporation would take delivery and immediately hand over the same to the buyer. The buyer shall promptly fax, within one hour of receipt of goods, details as per Annexure-III. 4.02 Buyers may note that the Corporation does not guarantee delivery, and the user shall bear all risks arising due to any delay/default in delivery by the supplier. No claim in this regard shall lie against the Corporation. Further, the user shall keep the Corporation indemnified at all times in this regard. A letter of indemnity in the form as per Annexure-IV shall be submitted. 6. Jurisdiction 6.01 All transactions of the Corporation with the Manufacturer shall be subject to the exclusive jurisdiction of Bangalore. 7. Review of the policy 7.01 The above policy is subject to periodic review. If the circumstances so warrant, the Corporation may, at its sole discretion amend this policy and the same shall be binding on all buyers.


To i) All Primary & Composite Distilleries ii) All Manufacturers/Suppliers & Suppliers iii) ED-1 / ED-2 iv) GM(S)/GM(N)/C(F)/A(F&A)/C(A) v) AGM(F)/AGM(LS)/MMIS vi) All IML Depot Managers vii) All Spirit Depot Managers viii) Circular – Master File



Annexure I

Selling price of Spirit by the manufacturer/exporter on ex-distillery basis

(To be submitted on the letterhead of the manufacturer/exporter) Type of Spirit : Quantity of Spirit :

Particulars

Price in Rs. per

litre (i) Basic declared price of the manufacturer

(ii) Duties and other taxes as applicable (iii) Selling price to KSBCL [(i)+(ii)]

Terms and Conditions : (Please specify) Place: Sd/- Date: Authorised signatory

(Name)



Annexure II

(To be furnished on Co’s Letterhead of the manufacturer within ONE hour from

the time of dispatch of each consignment by fax to KSBCL FAX No.2248 3645) Ref:No: Date:

To The General Manager Karnataka State Beverages Corporation Limited Seethalaxmi Tower # 78, Mission Road BANGALORE 560 027. Dear Sir Sub: Information regarding dispatch of export consignment With reference to the above, we have dispatched the consignment as per the details furnished below: Date & time of dispatch Vehicle Registration number KSBCL OFS No. & date__________________,Qty________BLs, Amount Rs_________ Supplier Inv. No. & date__________________,Qty________BLs. Amount Rs_________ Type of spirit Total Quantity delivered_______________BLs. Serial No. of the security seals in the vehicle Temperature of the spirit delivered Strength of spirit (in 0 OP) Tare weight of the vehicle (in kgs) Gross weight of the vehicle (in kgs) Weight of the spirit delivered (in kgs) We have handed over all the relevant documents and samples along with Annexure-X of the Sourcing Policy of RS/DS in respect of above consignment to security guard deployed by the KSBCL for supervising the shipment of consignment. Thanking you, Yours faithfully Authorised Signatory (Name & address of the manufacturer)



Annexure III

(To be furnished on Co’s Letterhead within ONE hour from the time of receipt of the import consignment by fax to KSBCL FAX No.2248 3645)

Ref:No: Date:

To The General Manager Karnataka State Beverages Corporation Limited Seethalaxmi Tower # 78, Mission Road BANGALORE 560 027. Dear Sir Sub: Information regarding receipt of import consignment With reference to the above, we are in receipt of import consignment from M/s_________________________________________as per the details furnished below: Date & time of receipt Vehicle number KSBCL OFS No. & date__________________,Qty________BLs, Amount___________ Supplier Inv. No. & date__________________,Qty________BLs. Amount___________ Type of spirit Quantity received_______________BLs. Serial No. of the security seals in the vehicle Details of security seals tampered/missing, if any. We shall forward all the documents along with EVC in respect of above consignment within______________. Thanking you, Yours faithfully Authorised Signatory (Name & address of the buyer)



Annexure IV

FORMAT OF LETTER OF INDEMNITY

[To be typed on the letterhead of the company (buyer)] To: The General Manager (Operations), KSBCL, Bangalore. Dear Sir, Sub: Letter of indemnity Under NOC No._________________________________ dated ______________ issued by the Excise Commissioner, Government of Karnataka, we are importing ____________ bulk liters of ____________ Spirit from M/s.___________________________________. We have been appointed as agent for transporting the above consignment from M/s._______________________________________ to __________________________ ______________________________. We shall make arrangements for transportation and insurance in respect of the above consignment at our cost and risk. As per Clause No.4.02 of your Circular No.87 dated 21.6.2005, we hereby agree to indemnify and keep the Corporation indemnified from any and all claims that may arise in respect of importation of _____________ Spirit by us from the above party. We further undertake to pay all the losses, damages, costs, charges and expenses which the Corporation may suffer and keep the Corporation indemnified in all other respect on account thereof. Thanking you, Yours faithfully, for (Name of the company)





Policy on import of spirit from abroad (Potable/Non-Potable) for 2005-06

1.0 The following procedure has been formulated to facilitate manufacturers to import directly certain variety of spirits for captive use from abroad.

2.0 Manufacturers shall complete all excise formalities for import of spirits, duly obtaining a NOC from the Excise Commissioner of Karnataka. Upon arrival of the goods at the custom bonded warehouse, the importer shall approach the Corporation with the following documents.

(i) NOC issued from the Excise Commissioner of Karnataka (ii) Copy of Bill of Entry (iii) Letter of Indemnity.

3.0 The Corporation would issue a suitable letter of authorisation for issue of an import permit. The importer shall approach the respective Deputy Commissioner (Excise) for issue of import permit by paying necessary fees as per Karnataka Excise (Excise Duty and Fees) Rules, 1967.

4.0 The schedule of shipment from the custom bonded warehouse to the importer’s premises shall have to be declared at least one week in advance to enable the Corporation to deploy security personnel for supervising transit of goods.

5.0 The importer shall arrange transportation and insurance of the shipment of the consignment from the custom bonded warehouse to the destination at his cost and risk.

6.0 The importer after receiving the consignment at the destination shall issue the following documents to the security personnel deployed by the Corporation who has accompanied the shipment.

(i) Copies of import permits (ii) Copies of export permits/transit pass issued by the concerned state excise

authorities. (iii) Duly filled Annexure.

7.0 Copy of the Excise Verification Certificate, after completion of all formalities shall be sent to the Head Office directly.



8.0 The procedure specified above would supplement the procedure stipulated in sourcing and sales policies already issued by the Corporation. If any procedure is not explicitly mentioned, the procedure prescribed in the sourcing and sales policies would prevail. The above shall come into effect from 01.07.2005.







Export policy for rectified spirit and denatured spirit for 2005-06

A detailed procedure for sale of rectified spirit and denatured spirit has been prescribed in various circulars issued by the Corporation from time to time. This circular supercedes all previous procedures, so far as it pertains to export of rectified spirit and denatured spirit. If any procedure is not explicitly mentioned herein, the procedure prescribed in the sourcing and sales policies for RS and DS would be followed. Suppliers and buyers are requested to take note of the procedure prescribed in this circular which would come into effect from 1.7.2005. 1. Export of spirit 1.01 The Corporation would not participate in any solicitations for supply of spirit to buyers outside the state (either within the country or outside). Manufacturers may respond to such solicitations, clearly indicating that the spirit would be issued only through the Corporation. If a manufacturer obtains an order for such supply, then it shall be specific to it. 1.02 Manufacturers may also export spirit to walk-in outside buyers with whom there is no obligation for regular supply. They may also export spirit to their units (which may be under the same legal entity) in other states. 1.03 The Corporation may, if it deems it necessary, refuse to export spirit, notwithstanding the commitment made by the supplier. In such cases, the Corporation would not be liable for any contractual obligation that may devolve upon the manufacturer. 2. Export price 2.01 The Basic Declared Price including export fee as applicable for bulk delivery indicated by the manufacturer or the forward contract rate as applicable shall be the price at which export of spirit would be undertaken.

3. Request to the Corporation by buyers 3.01 The following documents shall be submitted to the head office of the Corporation.

(i) The No Objection Certificate issued by the Excise Commissioner of the state to which the spirit is to be imported;

(ii) Allotment order of the Excise Commissioner in Karnataka; (iii) Copies of the import permit issued by the competent authority; (iv) Quantity proposed to be imported;



(v) A demand draft payable in Bangalore for the sale consideration or the confirmation portion of the prescribed challan for having remitted the amount.

4. Issue of Order for Supplies 4.01 The Corporation would place an Order for Supplies (OFS) to the manufacturer from whom the supply is preferred. The validity of the OFS, quantity for export, etc., shall be in accordance with the No Objection Certificate/Import Permit issued by the importing state. 4.02 The Corporation would also issue an authorisation for export (AFE) to the manufacturer to facilitate obtaining of export permit for the transportation of RS/DS. 5. Delivery

5.01 Manufacturers shall, based on the AFE, apply for an export permit for the transport of the consignment to the destination. A copy of the same shall be produced to the depot concerned to facilitate delivery. 6. Jurisdiction 6.01 All transactions of the Corporation with the Manufacturer shall be subject to the exclusive jurisdiction of Bangalore. 7. Review of the policy 7.01 The above policy is subject to periodic review. If the circumstances so warrant, the Corporation may, at its sole discretion amend this policy and the same shall be binding on all suppliers.

