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TMI Blog2002 (2) TMI 1286X X X X Extracts X X X X X X X X Extracts X X X X ..... lows:- "The first stage brewing process is the feeding of malt and adjuncts into a vessel known as Mash Tin. There it is mixed with hot water and maintained at certain temperature. The objective of this process is to convert the starches of the malt into fermentable sugar. The extract is drawn from the Mash Tin and boiled with the addition of hops for one to two hours after which it is centrifuged, cooled and received in the receiving Vats. At this stage, it is called 'Wort and contains only fermentable sugars and no alcohol. After this, it is transferred to the fermentation tanks where yeast is added and primary fermentation is carried out at controlled temperature. After attenuation (diminution of density of 'Wort' resulting from its fermentation) is reached for fermented wort is centrifuged and transferred to the storage vats for secondary fermentation. After secondary fermentation is over in the storage vats, it is filtered twice- first through the rough filter press and then through the fine filter press and received in the bottling tanks. It is in bottling tanks that the loss of the carbon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials used or by the degree of attenuation of the wash or wort, as the case may be, as the State Government may prescribe: (c) on tari, by a tax on each tree from which the tari is drawn: Provided further that where payment is made upon issue of an exciseable article for sale from a warehouse established or licensed under Section 22(a) it shall be made- (a) if the State Government by notification so directs, at the rate of duty which was in force at the date of import of that article; or (b) in the absence of such direction by the State Government, at the rate of duty which is in force on that article on the date when it is issued from the warehouse." These two provisions have to be read with Rule 35 of the Punjab Brewery Rules, 1956, which reads as follows: "35(1). The duty on beer, at the prescribed rate, shall be charged on the total quantity actually brewed as entered in the brewing book by the licensee or as ascertained by the Inspector and entered in his survey book from B.6, whichever is higher, less an allowance of seven per cent for wastage. (2) The duty on beer shall become due immediately the account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e received in the collecting or fermenting vessel. The Brewery has not produced their brewing book to show any discrepancy and even otherwise the rule clearly lays down that in the event of a discrepancy the higher figure is to be taken. Hence this argument does not help the brewery. 2. A perusal of the Form in B-6 and Part-8 in Form B-12 clearly shows that the quantity considered to be brewed is after all the various processes are finished and the brewed liquor is received ready of bottling or to be issued in bulk. In fact, even loss in fermentation is permitted to be shown and the wastage is calculated only after allowing all the above in column 15. Hence there is no force in the argument advanced by the brewery regarding the loss in various processes. 3. In so far as the contention of the Brewery that duty can be levied only on consumption and not on wastage is concerned, as pointed out by me above, the scheme of the rules is that the duty is first levied on the total quantity brewed and refunds are allowed on export etc., since the scale of wastage allowed for calculating wastage is prescribed duty has to be charged on the remainder. 4. There is no force in the plea that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and on the endproduct an exemption of 7 per cent was to be allowed. He drew our attention to the Rules in Karnataka which had contemplated allowance being made with regard to manufacture of potable liquor. In respect of beer, those Rules have stipulated a deduction of 7 per cent at the pre-bottling stage and during the period of fermentation and an allowance of 6 per cent at the stage of filling of beer into the bottles. Mr. Divan, therefore, contended that on the manufactured beer a deduction of 7 per cent was logical. We agree with the contention of Mr. Divan, and this is also not disputed by Mr. Anand, that the State has jurisdiction to levy excise duty only on beer after it has been brewed and has become fit for human consumption. This is the settled position as laid down by this Court in Mohan Meakin and Modi Distillery cases. The only question which, to our mind, really arises for consideration is how to determine the quantity of beer which is manufactured on which the excise duty is to be levied. Section 32 gives an answer to this question. The first part of the Section states that subject to the rules which may be made by the financial Commissioner excise duty is to be le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies to accept the figure indicated in the records of the manufacturer of the total quantity of beer manufactured. Duty can be levied on this and this would be in consonance with the first part of Section 32. It is, perhaps, only to cross-check whether the figure which is indicated in the books of the manufacturer is correct that a formula can be used for determining the amount of beer which could or should or must have been manufactured. This is by taking into account the quantity of raw material used, the quantity which is in the process and as entered in the brewing book and from there giving an allowance of 7 per cent for wastage. It appears to us that the allowance of 7 per cent has to be in arriving at the figure of the manufactured beer as loss of quantity during the process of manufacture. It cannot be that on the figure of manufactured beer, arrived at on the basis of the books of the respondent, an allowance of 7 per cent has then to be given. If the figure taken for the purpose of calculating the excise duty is only of the end-product, viz., the beer produced, and not the quantity of raw material used in the manufacture of beer during which loss of some quantity as wastag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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