Holograms on liquor bottles not effective: CAG

FROM A CORRESPONDENT

SHILLONG, March 27: The report of the Comptroller and Auditor General (CAG) of India (Revenue Sector) for the year ended on March 31, 2014 stated that its audit findings indicate that implementation of holograms containing alcoholic liquor bottles in Meghalaya was not efficient and effective.

According to the CAG report the implementation of holograms in alcoholic liquor bottles without setting up a testing laboratory and not carrying out any quality checks defeated the objective of introduction of holograms in the State.

“The State has no chemical laboratory, as a result of which IMFL produced locally were not getting tested by the Excise Department to ensure that IMFL manufactured in the bottling units was fit for human consumption and that the strength of the spirit was in the prescribed level, i.e., 75 degree proof as indicated in the brand approved by the Excise Department,” the CAG report stated.

It may be mentioned that in April 2009 the state government notified application of printed security holograms issued by it on bottles, pouches and cans containing alcoholic liquor for human consumption was made compulsory on its issue from distilleries/breweries/bonds/licensees.

Its objectives is to collect the excise duty at the point of issue of such liquor and safeguarding the public health and safety by certifying the genuineness of the alcohol as fit for human consumption.

The report pointed out that during 2012-13, 96995 cases IMFL and 70509 cases of beer on which holograms were affixed were allowed as go-down breakage and transit breakage for which no records were available.

The CAG report pointed out that there is a possibility that IMFL are being sold in the market without payment of Excise Duty and VAT since no mandatory submission of sale statements by the retailers were enforced and neither any physical verification of retailers were conducted during the review period.

“This therefore leaves no scope for verification by the Excise Department,” the report said. “No action was taken by the CE to ascertain the discrepancy in the holograms issued and that shown as received by the bottling plants. The scope of issue of excess holograms without realization of revenue cannot be ruled out,” the CAG report said.

The CAG report also noticed that 3,40,950  holograms were reported as wasted  by three bottling plants between May 2010 and March 2013.

According to the CAG report, the wasted holograms were neither returned to the Excise Department by the distilleries nor was any action taken by the Department to take possession of the holograms to rule out any misuse of the Government labels.

For implementation of holograms in the state, an agreement was entered into with M/s Uflex Limited, Noida in June 2009 for supply of holograms at an agreed cost of Rs 1.42 per hologram to be affixed on each.

The cost of the hologram was included in cost price declared by the manufacturer/bottling plants. The cost of hologram included Rs 1.30 as the contractor’s share and Rs 0.12 as the share of the state government.