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TMI Blog1996 (11) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... es various words and phrases in the Act. Section 3(1) defines "Bear" to include ale, porter, stout, and all other fermented liquors made from malt. "Liquor" has been defined under Section 3(14) of the Act to mean "intoxicating liquor and included all liquid consisting of or containing alcohol; also any substance which the State Government may by notification declare, to be liquor for the purpose of this Act". "Excisable article" has been defined in Section 3(6) to mean any alcoholic liquor for human consumption; or any intoxicating drug. "Excise duty" and "counervailing duty" as defined in Section 3(6-b) would mean any such excise duty or countervailing duty, as the case may be, as is mentioned in Entry 51 of List-II of the Seventh Schedule to the Constitution. "Intoxicant" under Section 3(12-a) means any liquor or intoxicating drug as has been defined in Section 3(16) to include every process, whether natural or artificial by which any intoxicant is produced or prepared, and also redistillation, and every process for the rectification, reduction, flavouring, blending or colouring of liquor. "Place" has been defined under Section 3(17) to include a building, shop, tent and closure, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and then through the fine filter press and received in the bottling tanks. it is in bottling tanks that the loss of the Carbon Dioxide Gas is made up and bulk beer is drawn for bottling. It is filed into the bottled and then last process of pasteurisation is carried out to make it ready for packing and marketing. Till and liquor is removed from the vats and undergoes the fermentation process as mentioned above the presence of alcohol is nil." Excisable article would mean any alcoholic liquor for human consumption or any intoxicating drug. The levy or impost of excise duty would be only on alcoholic liquor for human consumption or for being produced in the brewery. Beer would mean fermented liquor from malt, when it is potable or in consumable condition as beverage. It is seen that the levy is in terms of entry 51 of List II of the Seventh Schedule which envisages that duties of excise on the goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India. As to when liquor becomes exigible to duty was considered by this Court in Synthetics and Chemicals Ltd. vs. State of U.P. [(1990) 1 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , is, whether having regard to Entry 51 in List II, the State can (a) impose regulations by creating economic disincentives for consumption of drinkable alcohol, and (b) prevention of misuse of nondrinkable alcohol for consumption. Only in two cases the question of industrial alcohol had come up for consideration before this Court. One is the present decision which is under challenge and the other is the decision in Indian Mica and Micanite Industries Ltd. case. In the latter case, in spite of the earlier judgments including Barucha case, denatured spirit required for the manufacture of micanite was not regarded as being within the exclusive privilege of the State. It appears that in that decision at p.321 of the report (SCC p.238), it was specifically held that the power of taxation with regard to alcoholic liquor not fit for human consumption, was within the legislative competence of central legislature. The impost by the State was held to be justifiable only if it was a fee thereby impliedly and clearly denying any consideration or price for any privilege. For the first time, in the Synthetics & Chemical ltd. Case the concept of exclusive privilege was introduced into the are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lcohol (as known in the trade) into several kinds of alcohol. Beverages and industrial alcohols were clearly and differently treated. Rectified spirit for industrial purposes was defined as spirit purified by distillation having a strength not less than 95 per cent by volume of ethyl alcohol. Dictionaries and technical books showed that rectified spirit (95 per cent) was an industrial alcohol and not potable as such. It appeared, therefore, that industrial alcohol, which was ethyl alcohol (95 per cent), by itself was not only nonpotable but was highly toxic. The range of potable alcohol varied from country spirit to whisky and the ethyl alcohol content thereof varied between 19 to about 43 per cent, according to the ISI specifications. In other words, ethyl alcohol (95 per cent) was not an alcoholic liquor for human consumption but could be used as a raw material or input, after processing and substantial dilution, in the production of whisky, gin, country liquor, etc. In the light of experience and development, it was necessary to state that "intoxicating liquor" meant only that liquor which was consumable by human being as it was. What the State seeks to levy excise duty upon in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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