S.B.Sinha, J. - (1.) Whether 'beer' is a 'food article' within the meaning of an Exemption Notification No. 125/86-Cus., dated 17-2-1986 has fallen for our decision in this appeal. The said notification reads thus :- "In exercise of the powers conferred by Sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in column (2) of the Table hereto annexed and falling under Chapter 39 or 73 or 84 or 90 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India for use in processing/Packaging of food articles, from - 788 SEC.XVI.CH. 84 - MACHINERY & MECH. APPLIANCES - CUS. (a) So much of that portion of the duty of Customs leviable thereon which is specified in the said First Schedule, as is in excess of the amount calculated at the rate of 35 per cent ad valorem; and (b) the whole of the additional duty leviable thereon under Section 3 of the said Customs Tariff Act. In the Table to the said notification against Serial No. 20 is mentioned Automatic Bottle Labelling Machine.".
(2.) The writ petitioner is a company registered and incorporated under the Companies Act. It imported a fully automatic bottle labelling machine. The petitioner contend that the said machine is classifiable under Section IV of the First Schedule appended to the Customs Tariff Act, 1975, and, thus eligible for exemption from payment of customs duty in terms of the aforementioned notification.
(3.) It is not disputed that under the said notification exemption from customs duty have been granted to the goods specified in Column 2 of the Table annexed thereto when imported into India for use in processing/packaging of food articles. The petitioner has contended that beer is a food article on the following grounds :- "(a) Beer falls within the purview of the Ministry of Food Processing Industries of the Government of India. The said Ministry was established in July, 1988. In this connection, copy of the Annual Report for 1989-90 of the said Ministry is annexed hereto and marked "C". (b) The Bureau of Indian Standards has laid down a standard specification for Beer namely IS : 3865-1978. Beer is specified in the Agricultural and Food Products Sectional List of the said Bureau and falls within the purview of its Food and Agriculture Department. The said IS 3865-1978 was formulated by the Sectional Committee of the said Bureau which consisted of, inter alia, representatives from Central Committee for Food Standards, Ministry of Health and Family Welfare and Technical Standardisation Committee (Food Stuffs), Ministry of Agriculture and Irrigation. In this connection, copies of the said Indian Standard the said Sectional List and the Programme of Work of the Food and Agriculture Department of the said Bureau are annexed hereto and collectively marked "D". (c) The Agricultural and Processed Food Products Exports Development Authority Act, 1985 was enacted to provide for the establishment of an authority for the development and promotion of exports of certain agricultural and processed food products. Section 2(i) of the said Act defines "Scheduled Product" as any of the agricultural or processed food products included in the schedule to the said Act. Alcoholic and non-alcoholic beverages have been specified at serial number 8 of the said Schedule. Under the provisions of the said Act and the Rules framed thereunder your petitioner is required to get itself registered since it is manufacturing and exporting inter alia, Beer. In this connection, copies of the relevant extracts from the said Act and the application for registration required to be made under the provisions of the said Act and the Rules made thereunder are annexed hereto and collectively marked "E". (d) Appendix 17 of the Import and Export Policy for the period 1990 to 1993 contains the import policy for registered exporters and provides for import replenishment benefit allowed in respect of certain export products. The different Export Product Groups have been specified in Part I of the said Appendix. Beer has been specified at serial number 6 of the Export Product Group for "Filds". Copy of the relevant portion of the said policy is annexed hereto and marked "F". (e) Beer falls within the purview of the Prevention of Food Adulteration Act, 1954. The said Act defines food as meaning any article used as food or drink for human consumption other than drugs and Water Copy of the relevant extract from the said Act is annexed hereto and marked "G". (f) Beer is food and supplements and functions of the human body. Beer has rich value as a diuretic (to improve excretion of urine), as a high caloric drink to increase body weight, as a soothing drink for constipation as well as for de-hydration. Beer is also consumed as an energy replenisher in sports. Beer has a stimulating effect on the nervous system for muscle contraction, blood coagulation, bone and tooth metabolism, as electrolytes for enzyme activation and for hormone control. Beer is rich in vitamins and is a source of energy. In this connection copy of the paper entitled "Beer as Food" prepared by Professor Anton Piendl of the Institute of Brewing Technology and Micro-Biology,, Technical University of Munich, West Germany, is annexed hereto and marked "H". Also included in Annexure "H" hereto is an extract from the publication "Breau-industrie" which also sets out the physiological value of Beer. (g) Beer has been specified under Group "Food Products" of the Monopolies and Restrictive Trade Practices (Classification of Goods) Rules, 1971. Relevant extract from the said Rules is annexed hereto and marked "I". (h) Your petitioner states that Beer is manufactured out of Malt (barley), rice, sugar and Yeast by a process of fermentation. All the said items namely Malt (Barley), Rice, Sugar and Yeast are food articles. Your petitioner further states that the expression "Food" would not only include solids but would also include drinks and/or liquids since both have food value. Your petitioner states that Beer is an item of food which is served at the dining table. (i) Further it would be evident from the said notification the exemption is sought to be granted to the machineries required for all types of food articles including drinks, beverages etc.";