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TMI Blog1988 (10) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... sed should form an ingredient in the process of manufacture and such ingredients should be corrosive in nature and not the product itself. Hence, in view of the decision of the Punjab and Haryana High Court in CIT v. Saraswati Industrial Syndicate Ltd. [1982] 136 ITR 758, he rejected the assessee's claim. 3. Sri C.V.K. Prasad, learned counsel for the assessee, submitted that there are several machineries involved in the manufacture of beer. The raw material itself, which is an extract of barley malt, is diluted and treated with water in the first stage of the manufacture. At the second stage sugar and 'hops' are added and this mixture is corrosive in nature. He also explained the manufacturing process by referring to the Flow Chart at page 8 of the paper book, and submitted that acidity is also corrosive in nature and hence the assessee was entitled to higher rate of depreciation. It was his further submission that carbon dioxide is ejected and carbonated at CO2 Receiver and thus the raw material in several stages of the manufacture comes into contact with corrosive chemicals as a result of which the machineries also come into contact with corrosive chemicals. He sought to distin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ravindranath in his deposition stated that the raw material is an extract of Barley malt which contains Maltose and traces of organic acids like lactic acid with a PH value of approximately 5 and the dilution is made to bring down its specific gravity to about 1040, i.e., approximate 10% solution, and the Malt Extraction Dilution gadget is made of aluminium of 5m thickness. At the MV cum Boiling Copper, the second stage in the process, the diluted solution is boiled continuously. The vessel is jacketed and insulated. The temperature of the steam is 1200C. Boiling is done here for imparting the bitterness and the characteristic aroma from Hops and also to remove coagulable proteins from Malt Extract. While boiling is done, lactic acid and chemicals like calcium chloride, sodium chloride and gypsum are added to bring down the PH of the solution to about 5.2 which is ideal for precipitation of the proteins and these chemicals are added to give the mineral constituent later required for fermentation. To a question as to from which stage exactly the acidity starts in the process of manufacture of beer, the answer was : "It starts right from Malt Extract Dilution Tank" (Q. 12 and the ans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cid in the beer, the answer was "only 0.1%". The beer stored in the tanks will be filtered only as and when required. The function of the Keiselghur Filter, the ninth machine in order, is to remove the suspended matters like yeast and proteins from the beer. The Final Filter, another machine, filters the beer coming out of the Keiselghur Filter to make it free from micro-organisms. At Bright Beer Tank, the polished final beer is stored into which the carbon dioxide collected and compressed from the fermentation stage is injected back to give the thirst quenching property and also to expel any captured air which might spoil the life of the beer. From the Bright Beer Tank, the beer goes to the bottling machine. The Washing Machine is intended to wash the bottles and sterilise them with a 3% hot solution of caustic soda and other detergents like soda ash, tri-sodium phosphate, sodium metasilicate etc. The beer is bottled in the Filler and in the Pasteuriser, the filled bottles are pasteurised, a process by which the spoilage organisms are killed by slowly heating the beer to about 62 degree C, holding the beer at this temperature for about 20 minutes and then slowly cooling back to ro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ange it undergoes in the process of manufacture into beer. From an analysis of the above features, we are inclined to hold that though the raw material, viz., Barley Malt Extract, which is used in the first stage of the manufacture, contains traces of organic acids with a PH value of approximately 5 : we have been told, and it is not controverted, that PH7 is said to be neutral and less than 7 is acidic and tends to corrode. The PH value of barley malt extract is approximately 5 at the first stage of the manufacture. At boiling stage lactic acid and some chemicals are added. When the raw material is at the Hops strainer stage, it transforms into Wort with a PH value of 5 to 5.2. In fact, at the Starting Tank, epoxy coating is done in order to prevent the liquid coming in contact with the metal and thus to avert corrosion, but then the tanks are jacketed through which chilled brine is allowed to pass and such brine is highly corrosive and the tanks get corroded from outside which cannot be prevented by any protective measures. Brine is a solution of 12-14% of sodium chloride or common salt and it is circulated through the jacket in fermenters where the conversion of the Wort into al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrosive. As beer is acidic in nature it is corrosive. Beer drops falling continuously on plain R.C.C. floor converts it into rough and porous. Beer is never consumed in iron or copper or metal glasses. Moreover Beer contains carbon dioxide gas which forms solution of Carbonic acid. Beer contains lactic acid, Acetic Acid, Amino acids etc., known as organic acids. Due to all these acids PH of beer is low. (2) which makes beer corrosive .... (3) Apart from above, above buffer solution containing volatile compounds make it more corrosive (4) ..... Considering the above facts, it proves beyond doubt that beer is corrosive in nature." This opinion is based on : (1) Indian Standard Specification for Beer I.S.A. 3865 -- 1966 page 5 (2) "Arbeits Borsahriften Sur Che Icech braidechnischan Betricbecentrelle" by Karl Silbereisen and Hans Joachim Beiling 1963 page 116 -- Why PH of Beer is less. (3) Malting and brewing science by J.S. Hoough, D.E Briggn and R. Stevens -- 1971 page 616 etc. Even though beer is corrosive in nature as stated above, vis-a-vis the metals with which it comes in contact, the same cannot be said when the beer undergoes digestion involving chemical reactio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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