M/S KESAR ENTERPRISES LTD. vs STATE OF U.P.

The Supreme Court upheld the High Court's decision that the State Government lacked authority to levy Excise duty under Section 28 of the U.P. Excise Act, 1910 on rectified spirit but could impose a penalty under Rule 633(7) of the Uttar Pradesh Excise Manual. The Court clarified that the indemnity bond executed by the appellant required them to indemnify the Governor for any loss of duty due to non-delivery of the spirit. The appeal was dismissed, affirming the High Court's ruling regarding the penalty imposition.