ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF CASE
This matter comes before me on citations issued by the Department of Revenue for a
violation of S.C. Code Ann. §§ 61-6-2600(4) and 61-2-140(E) (Supp. 2002), for refilling minibottles
as an avoidance of tax. The Departments seeks a $1000 fine and the revocation of the minibottle
license as well as the beer and wine permit. The Respondent requested a hearing on the violation
and proposed penalty. After notice to the parties, a hearing was conducted on June 26, 2003 with
the parties represented as indicated above. The Department established the violations; the minibottle
license and the beer and wine permit are suspended for 60 days and a $500 fine is imposed.
FINDINGS OF FACT
1. Top of the Piece, Inc. was issued a permit for the on-premises consumption of
beer and wine, as well as a private club sales and consumption license, License Nos. 32012828-PSC
and 32012828-PBW, by the South Carolina Department of Revenue. On November 15, 2002, these
licenses and permits were valid at the location, 20 Pendleton Street, Greenville, SC.
2. On November 15, 2002 SLED Senior Agent Casey, acting undercover, entered the
Respondent’s private club as a non-member and purchased alcohol. After Casey purchased the
alcohol, Agent James Causey entered the private club and assisted Agent Casey in inspecting the
Respondent’s licensed premises at 20 Pendleton Street, Greenville, South Carolina. Minibottles with
broken seals were directly behind the bar in plain view of the agent. The agents discovered one
hundred thirty (130) minibottles containing alcoholic beverage, the seals of which had been broken.
In addition, Lt. Evatt of SLED was assisting Agent Causey and found three bags of empty
minibottles, some with the caps removed and others with the caps re-attached, in a storage room.
3. No large containers of alcohol were found on the premises.
4. John Lewis, the owner of the Respondent club, testified that he had not refilled the
bottles, and that his employees had not refilled the bottles. He testified that when he found out that
an employee was twisting the caps on the minibottles, thereby breaking the seal on the bottle, in
advance of the sale, he terminated the employee.
5.Although the bags of empty minibottles were identified at the hearing as “trash”,
there did not appear to be any other items of trash in any of the bags. In addition, the bottles were
not dirty as one would expect if they had been in the trash.
CONCLUSIONS OF LAW
Based upon the foregoing Findings of Fact, I conclude, as a matter of law, the following:
1.S.C. Code Ann. § 1-23-600 (Supp. 2002) grants jurisdiction to the Administrative
Law Judge Division to hear contested cases under the Administrative Procedures Act.
2.S.C. Code Ann. § 61-2-260(Supp. 2002) grants to the Administrative Law Judge
Division the powers, duties and responsibilities to hear contested matters governing alcoholic
beverages, beer, and wine.
4.A person who is licensed to sell alcoholic liquors and who displays minibottles when
the seals are broken shall be fined not less than $1000 and have his license permanently revoked for
any violation involving the avoidance of taxes. S.C. Code Ann. §61-6-2600 (Supp. 2002).
5.Refilling minibottles from a larger container constitutes the avoidance of taxes that
would be collected on the purchase and sale of filled minibottles. Carman v. S.C. Alcoholic Beverage
Control Commission, 315 S.C. 320, 433 S.E.2d 885 (Ct. App. 1993), rev'd on other grounds 317
S.C. 1, 451 S.E.2d 383 (1994).
6.A licensee may be held liable for violations of liquor regulations committed by his
agent while pursuing the ordinary business entrusted to him. The licensee is liable even though the
violations are committed in his absence and without his knowledge, consent, or authority. See 48
C.J.S. Intoxicating Liquors § 276 (1981).
7.S.C. Code Ann. § 61-6-2600 (Supp. 2002) provides penalties in the form of a fine,
suspension 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.
8. S. C. Code Ann. § 61-6-2400 (Supp. 2002) provides that alcoholic liquors sold in
minibottles must be taxed pursuant to Chapter 33 of Title 12.
9.If a licensee violates any regulation or code section of the Alcoholic Beverage Control
Act, pursuant to S. C. Code Ann. § 61-6-1830 (Supp. 2002) his license may be suspended or
revoked.
10.S. C. Code Ann. § 61-2-140 (E) (Supp. 2002) allows the Department to “revoke all
other licenses or permits held by the person if the suspended or revoked premises is within close
proximity.”
11.Permits and licenses issued by the State of South Carolina for the sale of liquor, beer,
and wine are not rights or property, but are rather privileges granted in the exercise of the police
power of the State to be used and enjoyed only so long as the restrictions and conditions governing
them are complied with. Feldman v. South Carolina Tax Commission, 203 S.C. 49, 26 S.E. 2d 22
(1943).
12.I conclude that Respondent violated S.C. Code Ann. § 61-6-2600 by possessing and
displaying minibottles whose seals were broken yet were filled with liquor.
13.As part of this investigation on November 15, 2002, Agent Casey of SLED, entered
Top of the Piece in an undercover capacity, purchased and consumed part of an alcoholic drink. Top
of the Piece was charged with and paid a four hundred dollar fine for violation of Regulation 7-17
(J), permitting consumption of liquor by a non-member of a private club.
14.The violations found by SLED therefore constitute a second offense by the
Respondent.
ORDERPursuant to S. C. Code Ann. § 61-6-2600 (4) (Supp. 2002), the sale and consumption
(“minibottle”) license can be permanently revoked and a fine levied against the Respondent for a
violation involving the avoidance of taxes. In addition, S. C. Code Ann. § 61-2-140 (E) (Supp.
2002) allows the Department to “revoke all other licenses or permits held by the person if the
suspended or revoked premises is within close proximity.” These remedies appear harsh when applied
to the facts of this case. I therefore find that the penalties provided in S. C. Code Ann. § 61-6-2600
(2) (Supp. 2002) shall be applied to the Respondent. Since this violation constitutes a second offense,
it is therefore ordered that the Respondent’s private club sale and consumption license is suspended
for sixty days from the date of this Order and a fine of five hundred ($500.00) dollars is imposed on
the Respondent.
And It Is So Ordered.
____________________________
Carolyn C. Matthews
Administrative Law Judge
August 6, 2003
Columbia, SC |
