ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This matter comes before the Administrative Law Court (ALC or Court) pursuant to S.C.
Code Ann. §§ 61-2-260 and 1-23-310, et seq. (1986 & Supp. 2003). The South Carolina
Department of Revenue (“Department”) seeks a fine totaling $2,500.00 for violations of S.C.
Code Ann. §§ 61-6-2600, 61-6-2210 and 23 S.C. Code Ann. Regs. 7-404 (Supp. 2003) ($500.00
for each of five violations), a fine in the amount of $5,600.00 for possession of 280 alcohol
containers in violation of the law ($20.00 per container), and revocation of Respondent’s on-premises beer and wine permit and sales and consumption (minibottle) license for the avoidance
of tax pursuant to S.C. Code Ann. §§ 61-6-2600(4) and 61-2-140(E) (Supp. 2003). After notice
to the parties, a hearing was conducted before me on September 30, 2004.
STIPULATED FACT
At the commencement of this proceeding, Respondent, through its counsel, stipulated,
pursuant to ALC Rule 25(C) that it committed violations of S.C. Code Ann. §§ 61-6-2600, 61-6-2210 and 23 S.C. Code Ann. Regs. 7-404 (Supp. 2003).
FINDINGS OF FACT
Having observed the exhibits presented at the hearing and closely passed upon their
credibility, taking into consideration the burden of persuasion by the parties, I make the
following Findings of Fact by a preponderance of the evidence:
1.The ALC has personal and subject matter jurisdiction.
2.Notice of the date, time, place and nature of the hearing was timely given to all
parties.
3.Respondent holds an on-premises beer and wine permit and a sales and
consumption (minibottle) license for its business location at 112 W. Birnie St., Gaffney, South
Carolina (“location”).
4.On November 14, 2004, the State Law Enforcement Division (SLED) conducted
an investigation of the location. As a result of the investigation, SLED issued six citations to the
Respondent for the following:
(1)Failure to display alcohol licenses
;
(2)Possession of non-taxed liquor;
(3)Possession of liquor in containers larger than 2oz.;
(4) Failing to break seals in customer’s presence;
(5)Failure to destroy empty minibottles;
(6)Refilling minibottles for the avoidance of taxes;
SLED agents also confiscated 265 minibottles with broken seals and 15 large liquor bottles,
which were on display at the location.
CONCLUSIONS OF LAW
Based upon the above-listed findings of fact, I conclude the following as a matter of law:
1.S.C. Code Ann. § 1-23-600 (Supp. 2003) grants jurisdiction to the ALC to hear
contested cases under the Administrative Procedures Act. Specifically, S.C. Code Ann. § 61-2-260 (Supp. 2003) grants the Court the authority to hear contested case hearings in matters
governing alcoholic beverages, beer, and wine.
2.The Department is charged with the responsibility of administering and enforcing
the
laws and regulations governing alcoholic beverages, including beer and wine. S.C. Code Ann. §
61-2-20 (Supp. 2003).
3.23 S.C. Code Ann. Regs. 7-404 (Supp. 2003) provides in relevant part that:
All holders of a license authorizing the sale and consumption of alcoholic
beverages in sealed containers of two (2) ounces or less are required to destroy, as
soon as reasonably possible, (1) all empty or partially empty containers of two (2)
ounces or less, (2) all other beverage containers on which the seals have been
broken, and (3) the contents of any partially empty alcoholic beverage containers
of two (2) ounces or less, any of which shall have accumulated upon the licensed
premises either from use or from any other source.
4. S.C. Code Ann. § 61-6-2210 (Supp. 2003) provides that “[t]he purchaser must
break the seal of a minibottle unless the seller breaks the seal in the presence of the purchaser
and delivers the container.”
5.S.C. Code Ann. § 61-4-2400 (Supp. 2003) provides that alcoholic liquors sold in
minibottles must be taxed pursuant to Chapter 33 of Title 12.
6.S.C. Code Ann. § 61-6-2600 (Supp. 2003) provides penalties in the form of a
fine, suspension and/or revocation of the license of a person authorized to sell alcoholic
beverages who displays minibottles when the seals are broken or who violates any provision
which involves the avoidance of taxes.
7.S.C. Code Ann. § 61-2-140(E) (Supp. 2003) provides that the Department may
suspend or revoke all other licenses or permits held by a person who has had a license or permit
suspended or revoked.
8.S.C. Code Ann. § 61-6-2610 (Supp. 2003) provides:
A person, corporation, or organization who has in its possession, custody, or
within its control alcoholic liquors which are handled, stored, kept, possessed,
transported, used, or distributed in violation of any provision of the ABC Act or
with the design of avoiding payment of license taxes provided in Chapter 33 of
Title 12, or other taxes must be required to pay a penalty of twenty dollars per
container to be assessed by the department as other taxes are collected. The
department may, upon good cause shown, remit any penalties provided in this
section in whole or in part….
9.It is a generally recognized principle of administrative law that the fact finder has
the authority to determine an appropriate administrative penalty, within the statutory limits
established by the legislature, after the parties have had an opportunity for a hearing on the
issues. See, e.g., Walker v. S.C. ABC Comm’n, 305 S.C. 209, 407 S.E.2d 633 (1991). Further,
in assessing a penalty, the finder of fact “should give effect to the major purpose of a civil
penalty - deterrence.” Midlands Util., Inc. v. S.C. Dep’t of Health & Envtl. Control, 313 S.C.
210, 212, 437 S.E.2d 120, 121 (Ct. App. 1993).
10.A permit for the sale of liquor, beer, and wine is neither a contract or a property
right. Rather, it is merely a permit to do what otherwise would be unlawful to do, and is to be
enjoyed only so long as the restrictions and conditions governing its continuance are complied
with. Feldman v. S.C. Tax Comm’n, 203 S.C. 49, 26 S.E.2d 22 (1943). Accordingly, there are
legal consequences for a permittee’s noncompliance with the alcoholic beverage laws of this
State.
11.The parties stipulated, and I find, that Respondent violated S.C. Code Ann. §§
61-6-2600, 61-6-2210, and 23 S.C. Code Ann. Regs. 7-404 (Supp. 2003). I further find and
conclude that such actions on the part of the Respondent were designed to avoid the payment of taxes to the State of
South Carolina. Accordingly, pursuant to S. C. Code Ann. § 61-6-2600(4) (Supp. 2003), the sale and consumption
("minibottle") license is permanently revoked and a fine of $1,000.00 is imposed on Respondent. In accordance
with S.C. Code Ann. § 61-2-140(E) (Supp. 2003), the beer and wine permit issued to the Respondent is also hereby
revoked. For possession of the 280 bottles in violation of the law, a fine of $5,600 is imposed on Respondent
pursuant to S.C. Code Ann. § 61-6-2610 (Supp. 2003). However, without good cause being shown, the Court has no
discretion in reducing the penalties imposed pursuant to S.C. Code Ann. § 61-6-2610 (Supp. 2003).
ORDER
Based upon the foregoing findings of fact and conclusions of law,
IT IS HEREBY ORDERED that Respondent’s beer and wine permit and minibottle license (License Nos.
32021397-PBW and 32021397-PSB) for the business located at 112 W. Birnie St., Gaffney, South Carolina are
revoked effective forty-five (45) days from the date of this Order. However, should another violation occur within
the next forty-five (45) days, the permit and license shall be revoked immediately; and
IT IS FURTHER ORDERED that Respondent must, within ninety (90) days of the date of this Order,
remit to the Department a fine in the amount of $1,000.00 for violations of S.C. Code Ann. §§ 61-6-2600, 61-6-2210, and 23 S.C. Code Ann. Regs. 7-404 (Supp. 2003) and a fine in the amount of $5600.00 for the possession of
280 alcohol containers in violation of the law.
AND IT IS SO ORDERED.
__________________________________
MARVIN F. KITTRELL
Chief Administrative Law Judge
December 30, 2004
Columbia, South Carolina |