MAHARASHTRA EXCISE GOVERNMENT RESOLUTION ANALYSIS

Document Type: Government Resolution (GR) / Policy Decision

Reference Number: GR No. MPL-1118/Pr.Kr.347/RAUSHU-3, dated 23 January 2019

Issued By: Government of Maharashtra, Home Department (गृह विभाग)

Effective Date: 23 January 2019 (date of issuance)

Summary: This GR authorizes sugar factories and distilleries in Maharashtra to manufacture ethanol (anhydrous alcohol) from three independent raw material sources: B-Heavy (B-Hy) molasses, C-Heavy (C-Hy) molasses, and sugarcane juice. The policy establishes scientifically determined alcohol recovery yields per metric tonne of each raw material, specifies operational conditions, storage protocols, transportation procedures, record-keeping requirements, and compliance conditions for licensed distilleries and integrated sugar-distillery units. The policy aligns with Government of India directives dated 16-18 July 2018 and 18 December 2018 from the Ministry of Consumer Affairs, Food & Public Distribution.

KEY PROVISIONS

1. APPROVAL OF COMMITTEE RECOMMENDATIONS

• Government endorses all recommendations, conditions, and terms submitted by the Committee chaired by the Commissioner of State Excise (formed vide GR dated 1 December 2018).
• Committee's report received 18 December 2018.

2. ALCOHOL RECOVERY YIELDS (CRITICAL SPECIFICATIONS)

A. C-HEAVY (C-Hy) MOLASSES

Classification per Government Notification No. BPA 1091/Pr.Kr.5/RAUSHU-2, dated 8 September 2015:

Per Metric Tonne (M.T.) of C-Heavy Molasses — MINIMUM RECOVERY

Key Definitions for C-Heavy Molasses:

• C-Heavy molasses is obtained from three boiling system (not B-masket boiling).
• Regardless of TRS content in three boiling system molasses, it shall be classified as C-Heavy.
• Grading remains A, B, C with no change to spirit recovery factors.

B. B-HEAVY (B-Hy) MOLASSES

Per Metric Tonne (M.T.) of B-Heavy Molasses — MINIMUM RECOVERY

Key Definitions for B-Heavy Molasses:

• Molasses obtained from B-masket boiling OR two boiling system with minimum T.R.S. of 55% is classified as B-Heavy.
• If two boiling system molasses has TRS below 55%, it shall be reclassified as C-Heavy.

C. SUGARCANE JUICE (DIRECT ETHANOL PRODUCTION)

Per Metric Tonne (M.T.) of Sugarcane — MINIMUM RECOVERY

Basis of Calculation:

• Minimum sugar recovery: 9.5%
• Fermentation & Distillation efficiency factored in.

D. SHORTFALL IN RECOVERY — TOLERANCE & REPORTING

If actual alcohol production falls short of minimum fixed recovery due to unavoidable or other reasons:

• Shortfall up to 1%: District Excise Officer approval required; written explanation with strong reasons to be submitted.
• Shortfall 1% to 2%: Commissioner of State Excise approval required; written explanation mandatory.
• Shortfall exceeding 2%: Government approval required; written explanation with compelling reasons mandatory.
• Competent authority shall decide case-by-case basis.

3. CONDITIONS & TERMS FOR ETHANOL PRODUCTION & STORAGE

A. PRIOR NOTICE REQUIREMENTS

a) Sugar Factories producing B-Heavy Molasses:

• Must provide written notice at least 10 days in advance of commencement to:
  • Presiding Officer, State Excise Department (District Unit)
  • Superintendent, State Excise Office
  • Sugar Commissioner's Office

b) Sugar Factories producing ethanol directly from sugarcane juice:

• Same 10-day advance written notice to above authorities.

c) Distillery licensees producing ethanol from B-Heavy or sugarcane juice:

• Must submit written intimation at least 10 days in advance to presiding officer of State Excise Department.

d) Switching between raw materials:

• If distillery switches from B-Heavy to C-Heavy molasses (or vice versa): 10-day written notice to presiding officer mandatory.
• If distillery switches from sugarcane juice to B-Heavy/C-Heavy molasses (or vice versa): 10-day written notice mandatory.

B. STORAGE & SEGREGATION

d) Tank Segregation — Mandatory:

• B-Heavy molasses ethanol must be stored in separate tanks from C-Heavy molasses ethanol.
• Both tanks must be gauged and sealed by competent authority before use.
• Production records must be maintained in separate registers or ticket-wise separately.

j) Molasses Storage — Separate Tanks:

• B-Heavy and C-Heavy molasses storage MUST be in separate tanks.
• All storage tanks MUST BE STEEL CONSTRUCTION (not other materials).

d) Tank Records:

• Separate record books or ticket-wise separate entries required for:
  • B-Heavy molasses
  • C-Heavy molasses
  • Ethanol from B-Heavy molasses
  • Ethanol from C-Heavy molasses
  • Ethanol from sugarcane juice

C. FERMENTATION & DISTILLATION PROCEDURE

i) Cleaning Protocol — Mandatory:

• Distillery must thoroughly clean all fermentation tanks before commencing ethanol production from B-Heavy molasses, C-Heavy molasses, or sugarcane juice.
• Distillery must ensure no mixing of feedstock or products from different sources in same equipment.
• Strict separation protocols must be observed.

D. MOLASSES ALLOCATION & PRIORITY

m) Production Planning for B-Heavy Molasses:

• When producing B-Heavy molasses, distillery must ensure molasses availability for:
  • Indian-made Foreign Liquor (IMFL) production
  • Country Liquor (CL) production
• Surplus B-Heavy molasses may be reserved for ethanol blending programs.

q) Statutory Priority:

• If sugar shortage is declared by Sugar Commissioner, affected sugar factories must prioritize sugar production over ethanol.
• Governor's directive shall be binding.

E. PIPELINE TRANSPORTATION (Sugar-Attached Distilleries Only)

s) Pipeline Transport from Sugar Factory to Distillery:

• B-Heavy molasses transport MUST BE via dedicated pipeline (not tanker/manual transport).
• Single weighment system must be installed at both:
  • Sugar factory premises
  • Attached distillery premises
• Prescribed Transport Pass (Parivaahan Pass) must be issued and signed by presiding officer.
• Transport pass must accompany each pipeline transfer.

t) Responsibility for Quality:

• Sugar factory & distillery management bear full responsibility for preventing contamination during pipeline transport.

x) Dual Pump & Valve System (for factories with B-Heavy AND C-Heavy production):

• Separate pump for B-Heavy molasses transport.
• Separate pump for C-Heavy molasses transport.
• One valve per pump.
• During B-Heavy transport: C-Heavy pump valve remains CLOSED.
• During C-Heavy transport: B-Heavy pump valve remains CLOSED.
• Identical valve system must be installed at distillery end.
• Non-functional valves shall be sealed by Regional Inspector & Presiding Officer.
• Only ONE type of molasses can be transported at any given time.

y) Future BIS Flow Meter Compliance:

• Government of India may mandate BIS-certified density flow meters for accurate measurement.
• When such directive is issued, all sugar factories and distilleries MUST COMPLY.

F. RECORD KEEPING & REPORTING

e) Production, Sale & Stock Documentation:

• Use existing prescribed forms (as per earlier notifications).
• B-Heavy and C-Heavy molasses — production, sale, stock must be shown SEPARATELY.
• Ethanol from each source must be shown separately.

l) Daily Records:

• Daily information and approved specimen records must be maintained for:
  • Molasses received/stored
  • Ethanol produced
  • Ethanol sold
  • Ethanol stock

r) Segregated Record-Keeping:

• All documents, records, and details regarding B-Heavy molasses ethanol production, storage, and sale must be maintained SEPARATELY from other distillery products/records.

z) Certificates for Oil Companies:

• When supplying ethanol to Oil Management Companies, distillery must issue:
  • Certificate of ethanol production (prescribed format)
  • Transport pass (prescribed format)
  • Other required certificates
  • Issued by presiding officer only.

G. COMPLIANCE WITH CENTRAL GOVERNMENT GUIDELINES

k) Implementation of Central Government Guidelines (18 December 2018): Distilleries MUST strictly follow Central Government letter dated 18 December 2018 covering:

• Molasses storage procedures
• Pipeline colour-marking system
• Weighing procedures (independent flow meter installation)
• Processing procedures
• Ethanol storage procedures
• Transportation procedures

aa) Future Amendments: All conditions, terms, and specifications issued by Central/State Government in future are BINDING on all licensees.

4. ELIGIBILITY & LICENSE RESTRICTIONS

A. STAND-ALONE DISTILLERIES (non-sugar factory-attached)

n) B-Heavy Ethanol Permission for Stand-Alone Distilleries:

• Stand-alone distilleries CAN be permitted to produce ethanol from B-Heavy molasses.

u) Stand-Alone Distillery Restriction:

• Stand-alone distilleries producing B-Heavy molasses ethanol CANNOT produce ethanol from any other feedstock.
• Restriction: Molasses-only (B-Heavy) as feedstock.

B. SUGAR-ATTACHED DISTILLERIES

n) Sugar Factory-Attached Distilleries:

• Sugar factory-attached distilleries CAN produce ethanol from B-Heavy molasses.

w) Bond Requirement for B-Heavy-Only Production:

• If sugar-factory-attached distillery intends to produce ONLY from B-Heavy molasses:
  • Must file Bond with Commissioner of State Excise.
  • Bond declares: All tanks and equipment at distillery shall be used ONLY for:
    • B-Heavy molasses storage
    • Ethanol production from B-Heavy molasses
  • No other use permitted.

C. GENERAL ELIGIBILITY

o) License Requirement:

• B-Heavy ethanol production permission granted ONLY to distilleries holding valid Excise License under:
  • Bombay Prohibition Act 1949
  • Rules under BPA 1949

D. FUTURE C-HEAVY SOURCING FROM B-HEAVY

v) C-Heavy Supplement from B-Heavy:

• C-Heavy molasses typically used for IMFL/CL production.
• If C-Heavy availability drops in future:
  • B-Heavy molasses may be used to supplement C-Heavy requirement.
  • Policy allows flexibility based on availability.

5. GOVERNMENT APPROVAL PROCESS FOR COMMENCEMENT

4. Mandatory Pre-Commencement Approval:

Step 1: Licensee submits written intimation to Presiding Officer / Superintendent, State Excise Dept.

Step 2: District Superintendent immediately forwards approval request to:

• Commissioner of State Excise

Step 3: Commissioner of State Excise submits proposal to Government.

Step 4: Government approves within 15 days of proposal.

Step 5: Only AFTER Government written approval, licensee may commence ethanol production from:

• Sugarcane juice, OR
• B-Heavy molasses, OR
• C-Heavy molasses

Non-Compliance Consequence: Production commenced without approval = VIOLATION (no explicit penalty stated, but implies license action).

6. CERTIFICATION AUTHORITY

p) B-Heavy Ethanol Production Certificate:

• Certificate issued by: Presiding Officer / Superintendent, State Excise Department
• Certificate required for: Ethanol produced from B-Heavy molasses.

7. APPLICABLE ACTS & RULES

The policy operates under:

1. Bombay Prohibition Act 1949 (BPA)
2. Rules under BPA 1949
3. Government Notification No. BPA 1091/Pr.Kr.5/RAUSHU-2, dated 8 September 2015 (for molasses classification & recovery factors)
4. Government of India, Ministry of Consumer Affairs, Food & Public Distribution:
   • Letter dated 16 July 2018
   • Letter dated 17 July 2018
   • Circular No. 40/1/2018-(BP&E), dated 18 September 2018
   • Letter dated 18 December 2018

WHO IS AFFECTED

1. Sugar Factories in Maharashtra (producing B-Heavy molasses or ethanol from sugarcane juice)
2. Distilleries attached to sugar factories (all categories)
3. Stand-alone distilleries (holding valid Excise License under BPA 1949) — for B-Heavy molasses ethanol only
4. District Excise Officers (approval authority)
5. State Excise Superintendent (notification recipient)
6. Commissioner of State Excise (approving authority)
7. Sugar Commissioner (for priority declaration)
8. Oil Management Companies (end consumers of ethanol)

IMPORTANT NOTES / CONDITIONS / PENALTIES

A. CRITICAL MANDATORY CONDITIONS

1. NO MIXING OF FEEDSTOCKS:

   • Distillery operating on B-Heavy CANNOT simultaneously produce from C-Heavy or sugarcane juice.
   • Switch between feedstocks requires 10-day notice and written approval.
   • Equipment must be thoroughly cleaned between feedstock changes.

2. SEPARATE STORAGE IMPERATIVE:

   • B-Heavy and C-Heavy molasses in separate steel tanks.
   • Ethanol from different sources in separate tanks.
   • All tanks must be gauged and sealed before use.

3. GOVERNMENT APPROVAL MANDATORY:

   • Ethanol production cannot commence without written Government approval.
   • 15-day approval window from Commissioner's proposal.
   • Any unauthorized production = breach of license.

4. RECOVERY SHORTFALL REPORTING:

   • Falling below minimum recovery triggers mandatory written explanation.

   • 2% shortfall requires Government approval and justification.

B. OPERATIONAL EXCEPTIONS / FLEXIBILITY

1. Sugarcane Juice Allowed: Direct ethanol production from fresh sugarcane juice (not just molasses).
2. Stand-Alone Distilleries: Can participate (B-Heavy only restriction).
3. C-Heavy from B-Heavy: Future flexibility if C-Heavy becomes scarce.
4. Sugar Priority: Sugar production takes priority if shortage declared.

C. PENALTIES / ENFORCEMENT (Not explicitly stated)

• License suspension/cancellation for violations (implied under BPA 1949).
• Seizure of unauthorized ethanol (under BPA 1949).
• Penalties under Prohibition Act for unauthorized production (standard).

D. APPEALS / GRIEVANCE REDRESSAL (Not mentioned)

• No appeal process specified in this GR.
• Presumably follows standard Excise Department appeal mechanism.

E. COMPLIANCE CERTIFICATION

• This GR is available on www.maharashtra.gov.in
• Web Reference ID: 201901161724311229
• Digitally signed document.

SPECIAL NOTES FOR EXCISE PRACTITIONERS

1. THREE RAW MATERIALS ARE DISTINCT:

   • B-Heavy molasses (BH-1 @ ≥60% TRS; BH-2 @ 55-59.99% TRS)
   • C-Heavy molasses (Grade A @ ≥50% TRS; Grade B @ 44-49.9% TRS; Grade C @ 40-43.9% TRS)
   • Sugarcane juice (fresh, not molasses)
   • Recovery yields differ substantially.

2. TANK SEGREGATION IS NON-NEGOTIABLE:

   • This is not discretionary — "MUST" in original.
   • All tanks must be steel; gauging/sealing required.
   • Violation = license action.

3. CENTRAL GOVERNMENT GUIDELINES (18 December 2018) MUST BE FOLLOWED:

   • Storage, pipeline, weighing, processing, transport — detailed in Central letter.
   • This GR incorporates Central Government directives by reference.
   • Non-compliance = breach of State policy.

4. STAND-ALONE vs. ATTACHED DISTILLERIES:

   • Stand-alone: B-Heavy ONLY (no other feedstock).
   • Attached: Can use B-Heavy, C-Heavy, and sugarcane juice (per conditions).
   • Different regulatory paths.

5. APPROVAL TIMELINE:

   • 10 days' notice to District Officer.
   • District officer forwards immediately to Commissioner.
   • Commissioner submits to Government within 15 days.
   • Government decision within 15 days of Commissioner's proposal.
   • Total: Up to 40 days from initial notice (approximate).

6. B-HEAVY ETHANOL SUPPLY TO OIL COMPANIES:

   • Certificates required from Presiding Officer.
   • Transport pass required.
   • Records must show source clearly.
   • Subject to all petroleum/oil sector regulations (outside scope of this GR).

DOCUMENT LOCATION & AUTHENTICATION

• Government Portal ID: 1451
• Maharashtra Government Website: www.maharashtra.gov.in
• Web Reference ID: 201901161724311229
• Digital Signature: Applied (verified on state portal)
• Language: Marathi (officially translated herein)
• Issued Under: Authority of Governor of Maharashtra
• Distributed to: Chief Minister's Office, Opposition Leader, Minister for Excise, Chief Secretary, Additional Chief Secretary (Home), Commissioner of State Excise, Sugar Commissioner, all Divisional Deputy Commissioners, all District Superintendents, State Excise Headquarters.

END OF ANALYSIS