Maharashtra Faces Rs 350 Crore Loss in Excise Revenue Over Old Monk Rum Restrictions
The Bombay High Court hears claims of significant revenue loss due to sales restrictions on Old Monk rum, with implications for state finances.
Maharashtra reportedly lost Rs 350 crore in excise revenue due to restrictions on Old Monk rum sales.
Mohan Rocky Springwater claims over Rs 500 crore in business losses amid ongoing legal disputes with FSSAI.
The case raises questions about product labeling and compliance with food safety standards.
Maharashtra has reportedly incurred a loss of approximately Rs 350 crore in excise revenue following the imposition of sales restrictions on Old Monk rum, as revealed during a hearing at the Bombay High Court on Monday. The manufacturer, Mohan Rocky Springwater Pvt Ltd, is contesting a prohibition order issued by the Food Safety and Standards Authority of India (FSSAI), which pertains to the product's formulation and labeling.
The company has asserted that the sales restrictions have severely impacted its business operations, claiming losses exceeding Rs 500 crore. It argues that while its products are barred from sale, similar formulations continue to be available through other manufacturing units. Additionally, the company highlighted the adverse effects on around 300 employees due to the restrictions.
Sources within the excise department confirmed that the ban, which has been in place since May, has led to significant revenue losses, as all variants of the rum have been removed from store shelves. However, it is important to note that the Rs 350 crore figure cited by the manufacturer has not been independently verified by the Maharashtra State Excise Department, and the exact period covered by this estimate remains unclear.
The ongoing dispute not only affects the manufacturer but also raises concerns about the state's financial health, as excise collections are a crucial revenue source for Maharashtra. The legal arguments center around whether the product's formulation meets the necessary standards to be marketed as “rum” and if its labeling accurately reflects its contents. FSSAI contends that the inclusion of added rum flavoring disqualifies the product from being marketed under the standard name.
The case is set for further hearings on October 23, where the court will consider the competing arguments regarding the product's classification and labeling. The outcome may have broader implications for the alcoholic beverage industry, particularly concerning the use of flavoring in spirits and the regulatory standards governing product labeling. Until a resolution is reached, the financial claims made by the manufacturer and the objections raised by FSSAI remain under judicial consideration.
