Case Law Details
Anheuser Busch InBev India Limited Vs Commissioner (CESTAT Delhi)
Appellant is manufacturing an alcoholic drink i.e. Beer which is not excisable under Central Excise Act but is excisable under Rajasthan State Excise Act. The show cause notices have been issued under Central Excise Act. This Act is a central legislation enacted pursuant to the legislative power conferred on the Parliament in terms of Article 246 read with Entry 84 of List-I of the Seventh Schedule to the Constitution during the relevant Entry No.84 read as follows:
“84. Duties of excise on tobacco and other goods manufacture or produced in India except (a) alcoholic liquors for human consumption and (b) opium, Indian hemp and other narcotic drugs and narcotics.”
The perusal makes it ample clear that alcoholic liquors for human consumption as that of Beer are out of the scope of Central Excise Act. Though the goods which are specified in First and Second Schedule to Central Excise Tariff Act, 1985 only are excisable goods: But alcoholic liquors including Beer find no mention in the said Schedules of Central Excise Tariff Act, 1985 because of the above Entry No.84. There is no denial that such alcoholic liquors are subject to Excise Duty under State Excise Law. The collection of duty and levy thereof is mentioned in Section 3 of Central Excise Act. The word “produced” or “manufacture” in said Section 3 has to be read as in relation to excisable goods resulting from such processes. Accordingly, it becomes clear that the provisions of Central Excise Act including the procedure for levy and collection of duty would apply only to such production or manufacturing process that result in production or manufacture of excisable good as mentioned in the Central Excise Act. Since the manufactured good in question is Beer, an alcoholic liquor for human consumption, the manufacturing process is out of the purview of Central Excise Act. Question of any intermediate product arising during such manufacturing process, irrespective find mentioned under Central Excise Tariff, cannot be made liable for Excise Duty under Central Excise Act.
Coming to the second aspect of marketability, any good which is known to market attracts Excise Duty when cleared provided it has been manufactured. As already held above Carbon Dioxide (CO2) herein was not the product of manufacturing process. However, it is an admitted case that the appellants in addition of using CO2 captively were also purchasing CO2 for the same purpose of giving effervescence to the manufactured Beer. The marketability cannot be denied. Also Carbon Dioxide has a specific Tariff Entry under Central Excise Act cannot be denied. But the fact remains is that impugned CO2 is not a manufactured product, as held above, it fails to satisfy the dual test. Question of levy of Excise even under Central Excise Act does not arise.
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