THIRUVANANTHAPURAM: The Comptroller and Auditor General of India (CAG) has flagged the excise department’s regularisation of a massive theft of Extra Neutral Alcohol (ENA) from the state-run Travancore Sugars and Chemicals Limited (TSCL).
The department regularised the theft, treating it as normal transit wastage. TSCL produces the rum Jawan, one of the most popular brands sold by the Beverages Corporation.
The theft came to light on 30 June, 2021 when Excise officials intercepted two tanker lorries transporting 40,000 bulk litres (BL) each of ENA to the distillery. They found a shortage of 20,386 BL of spirit — with 12,687 BL missing from one vehicle and 7,699 BL from the other.
The drivers admitted that the spirit was illicitly sold in Madhya Pradesh with the alleged involvement of certain employees of the distillery. The department released the remaining ENA after levying a fine of Rs 6,76,072, calculated at Rs 20 per proof litres, treating the shortage as transit wastage.
The report said the government suffered unrecovered revenue loss of `2.20 crore due to the theft. Excise officials subsequently checked the storage tanks at TSCL and identified further discrepancies. There was a shortage of over 4.6 lakh BL of ENA, enough to produce over 1 lakh cases of Indian-made foreign liquor.
A police case was filed in connection with the theft. But the department neither initiated recovery of the revenue lost nor pursued dues from those involved. Instead, it granted TSCL a storage wastage allowance backdated nine years, from 2013-14 to 2021-22, without records of any physical verification. Surprisingly, a joint stock check done three months before the incident had recorded no shortage. The loss of revenue to the state due to the shortage was Rs 49.68 crore.
The CAG also flagged a pattern in bottling wastage at the distillery. Wastage was consistently above 250 BL per batch before the 2021 incident. It then dropped after monitoring tightened and rose back to earlier levels by January 2024. The company had no explanation for this.