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TMI Blog1991 (4) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount calculated at the rate of 35 per cent ad valorem; and (a) the whole of the additional duty leviable thereon under Section 3 of the said Customs Tariff Act. 2. In the Table to the said notification against Serial No. 20 is mentioned "Automatic Bottle Labelling Machine", The petitioner imported a fully automatic Bottle Labelling Machine for labelling beer bottles. In the Bill of Entry filed for clearance of the said machine, the machine was classified under Tariff Heading No. 8422.20 and a claim for exemption of duty under the said notification was made. On 6th September, 1990 the respondent No. 1 rejected the petitioner's claim for exemption under the said notification and assessed a sum of Rs. 43,71,890/- as the duty payable in respect of the said machine. A detailed representation was made by the petitioner to the respondent No. 1 in support of its claim for exemption under the said notification. The representation was replied to by the respondent No. 1 by his letter dt. 23-11-1990 in the following language :- "Your contentions for extending the duty concession under Notification No. 125/86 dt. 7-12-1986 have been considered but do not appear acceptable. However ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntions of the petitioner and stating in no uncertain terms that the said machine had not been imported for processing or packaging of food articles and was not entitled to exemption under the said notification. Furthermore "food articles" has not been defined in the Act and as observed by Supreme Court in Union of India and Ors. v. Tata Iron and Steel Co. Ltd. reported in AIR 1975 S.C. 769 = 1978 (2) E.L.T. (J 439) (S.C.). "In absence of any clear criterion to determine what is skelp and not strip, no useful purpose would be served by even remanding the matter to the Excise authorities for a decision after taking necessary evidence." 9. It is necessary therefore for the Court to define the scope and ambit of the words "food article" used in the said notification so that there can be no doubt or confusion in the minds either of the Authority or of the petitioner with regard to the machine in question. 10. There is another aspect of this contention, namely in exercise of power under Article 226 the Court should not interfere with the decision of a statutory authority which can be rationally sustained. 11. In the decision V.V. Iyer v. Jasjit Singh, Collector of Customs (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was written by the petitioner's Agent. It also appears that the Customs Authority did not treat the matter as having been concluded by the alleged admission of the petitioner's Agent and has left the matter open for decision by offering a personal hearing. Had the Customs Authority relied upon the admission of the petitioner's Agent, this would have found place in the respondent No. 1's letter dt. 23rd November, 1990 quoted above. 17. The last preliminary objection of the respondents viz. that the writ'petition is premature does not appear to be of any substance. The assessment as made on the Bill of Entry was a final assessment. There was no scope for the respondent No. 1 to review the matter. He had no authority to do so particularly in the absence of any fresh material. The respondent No. 1's observation in the letter dt. 23rd November, 1990 as well as the stand taken by him in the affidavit in opposition in this proceeding would show that the respondent No. 1 has already judged the issue and has formed a view regarding the matter. In fact by the stand taken in the affidavit in opposition, the respondents have disabled themselves from adjudicating on the matter at all. 18. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Restrictive Trade Practices Act, 1969 and the rules framed thereunder in this regard. Reference has also been made to the Indian Standard Institution which treats beer under the food department. The provisions of the Prevention of Food Adulteration Act, 1954 was also referred to wherein beer has been treated as food within the meaning of the said Act. In this connection the petitioner also relied upon the following decisions :- (a) P. K. Tejani v. M.R. Dange and Ors. reported in AIR 1974 S.C. 228. (b) Shivraj Tobacco Co Ltd. v. State of Madhya Pradesh reported in 1991 CRI. L.J. Page 156. (c) State of Tamilnadu v. Wander Ltd. reported in (1990) 79 S.T.C. 421. (d) Corn Products Co. (India) Ltd. v. UOI reported in 1991 (51) E.L.T. 330. III. The Third Contention of the petitioner is that the beer is understood in common parlance as a food article. In this connection the petitioner relied uponthe fol lowing authorities: (a) The New Encyclopaedia Britannica, 15 edition, Macropaedia Volume 13 page 420. (b) An Article published in Brewers Digest January, 1981 which gives the nutri tive value of beer. (c) The decision of the Supreme Court in the State of Bombay v. V.K. G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this connection. (IV) The provisions of the Customs Tariff Act would also show that beer was beverage and that a clear distinction had been made between food products and beverages. Reliance has been palced on the decision of the Supreme Court in Collector of C. Ex. v. Parle Exports (P) Ltd. reported in AIR 1989 S.C. 644 = 1988 (38) E.L.T. 741. 20. The issue involved in this case may be considered on the basis of the guidelines laid down by the Supreme Court in the case of Parle Exports (P) Ltd. (supra). In that case the Court held that in interpreting the said notification "Regard must be had to the object and purpose for which the exemption is granted bearing in mind the context and also taking into consideration the literal or common parlance meaning by those who deal with those goods bearing in mind that in case of doubt only it should be resolved in favour of the assessee or the dealer avoiding however an absurd meaning." 21. In the case of The Deputy Commissioner of Sales Tax v. M/s. G.S. Pai (supra) relied upon the respondents, the Supreme Court similarly laid down a test for interpreting entries in Sales Tax Legislation. The test has been stated as follows : " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... develop processed food industry by way of........ improvement in packaging of scheduled products and marketing of the products outside India and promotion of export-oriented production and development of scheduled products." Section 2(1) of the 1985 Act defines "Scheduled Products" as meaning "the agriculture or processed food products included in the Schedule." Item 8 of the Schedule to the 1985 Act refers to "alcohol and non-alcohol beverages". 22.4 It is to be noted that the petitioner is registered under the 1985 Act in respect of its business of manufacturing beer. The petitioner's business is as such subject to the restrictions, obligations and control provided under the 1985 Act. In July 1988 a Ministry of Food Processing Industry was set up. One of the major objectives as recorded in the Annual Report of the said Ministry for the year 1989-90 has been stated as "to ensure that adequate surpluses are created consistent with price and quality to further exports and earn valuable foreign exchange for the country by providing critical inputs to the Industry to foster production for exports." 22.5 Amongst the subjects brought within the purview of the Ministry was specia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n place knowledge that the word "food" is a very general term and applies to all that is eaten by men for nourishment and takes in subsidiaries. Is supari eaten with relish by man for taste and nourishment ? It is. And so it is food." 23.4 In the State of Tamil Nadu v. Wander Limited reported in (1990) 79 STC 421 a Division Bench of the Madras High Court held that 'Horlicks" was a milk food. The Division Bench relied upon an earlier decision of the Madras High Court in the State of Tamil Nadu v. A.K. Sundaram - (1983) 54 STC 82 and held : "Normally, the dictionary meaning of food is something taken into the system to maintain life and growth and to supply nourishment." 23.5 Therefore in the literal sense food must be an item of nutritive value which is ingested by the human body. Beer is ingestible. The question is, is it nutritional ? 23.6 In the New Encyclopaedia Britannica (Macropaedia) beer has been included as an item of food which is of nutritive value. Under the section with the heading "Classes of foods", beverages have been included, and under the heading "Beverage", beer has neen noted as containing a significant amount of riboflavin. In fact while recommending th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 1975 Act). The Schedule to the 1975 Act relating to Import Tariff contains several sections. The relevant section in this case is Section IV which deals with "Prepared Food stuffs; Beverages, Spirits and Vinegar; Tobacco and manufactured tobacco substitutes". Within the section in question there are nine Chapters namely Chapters 16 to 24. 24.3 A scrutiny of the language of the various Chapters would show that alcoholic beverage including beer are considered as food. Chapter 21 deals with "Miscellaneous edible preparations". 24.4 In the note to the said Chapter it is stated as follows : "1. This Chapter does not cover : (a) Mixed vegetables of Heading No. 07.12; (b) Roasted coffee substitutes containing coffee in any proportion (Heading No. 09.01); (c) Spices or other products of Heading Nos. 09.04 to 09.10); (d) Food preparations other than the products described in Heading No. 21.03 or 21.04, containing more than 20 per cent by weight of sausage, meat, meat offal, blood, fish or crustaceans, molluscs or other aquatic invertebrates or any combination thereof (Chapter 16); (e) Compound alcoholic preparations of a kind used for the manufacture of beverages, of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the heading of food. 24.9 The Bureau of Indian Standards also published a Report on 30th June, 1988 in which standards were laid down sectionally in respect of inter alia Agricultural and Food Products. Alcoholic drinks including beer (First Revision) have been included under that heading. 24.10 (d) In the field of Trade under the Monopolies and Restrictive Trade Practice (Classifications of Goods) Rules, 1971 which were framed under Section 67 of the MRTP Act, 1969 by the Central Government, beer has been classified under the heading Food Products. 24.11 Apart from the recognition of beer as a food at the official level, even on a social plane it is not disputed that beer is treated in foreign countries and in certain levels of society in India as consumable items to be taken "with relish for taste and nourishment". The mere fact that other levels of society may not so consider beer (albeit there is no such evidence) nevertheless cannot detract from the fact that beer may be considered as an article of food. 25. This brings us to the sheet anchor of the respondents case viz. the decision of the Supreme Court in the case of Collector of Central Excise v. Parle Export ..... 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