A decision to this effect, taken at a meeting of the Cabinet sub-committee on excise on Friday is a clear deviation from the proclaimed excise policy of the Government under which the vending rights were supposed to be given for a prescribed fee of licence.

Law and Parliamentary Affairs Minister M C Nanaiah told media persons here after the Cabinet Sub Committee meet that while the Government had initiated process to give vending rights by drawing lots for a prescribed fee of licence region-wise, the earlier retail arrack vendors had obtained a court stay on the licencing system and a direction to the Government to continue with the system of auctioning pending disposal of a writ petition in this regard.

Meanwhile, the Excise department computed the total revenue bythe licencing system and it was estimated that the realisation would be around Rs 350 crore to Rs 400 crore as against Rs 650 crore being realised through the auctioning system. Nanaiah informed that considering the shortfall in the excise revenue by over Rs 350 crore under the licencing system, the Committee decided to continue the auctioning system from the point of view of mobilising resources for the Government. It was also found that while the arrack sales registered a growth and there was considerable increase in consumption, the excise revenue showed a declining trend with the new system. Nanaiah informed that the Government's stand on the issue was briefed to the State's Advocate General today for bringing it to the notice of the Court. The Government has also started refunding the licence fee paid by the licencee following the reversal of the excise policy, he stated.