STATE OF U.P. & ORS. versus M/S MOHAN MEAKIN BREWERIES LTD. & ANR.

Citation: [2011] 14 S.C.R. 98 · Decided: 23-09-2011 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Disposed off

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
[2011) 14 (ADDL.) S.C.R. 98 
STATE OF U.P. & ORS. 
V. 
M/S MOHAN MEAKIN BREWERIES LTD. & ANR. 
(Civil Appeal Nos. 4708-4709 of 2002) 
SEPTEMBER 23, 2011 
[R. V. RAVEENDRAN AND P. SATHASIVAM, JJ.] 
Uttar Pradesh Excise Act, 1910: 
c 
s.29(e)(i) - Beer - Excisablity of - Stage when the beer 
manufactured is exigible to duty -
Held: When the 
fermentation process of wort is completed, it becomes an 
alcoholic liquor for human consumption and there is no legal 
impediment for subjecting beer to excise duty at that stage -
0 
The State has legislative competence to levy excise duty on 
beer either after the completion of the process of fermentation 
.and filtration, or after fermentation - Excise laws - Liquor. 
s. 28A -
Imposition of additional duty -
Excess 
manufacturing wastage - Basis for determination - Held: The 
E base measurement is taken in the fermentation vessel and 
9% standard allowance is provided to cover losses on 
account of evaporation, sul/age and other contingencies within 
the Brewery- Uttar Pradesh Brewery Rules 1961 - r.53. 
F 
Constitution of India, 1950: 
Seventh Schedule, List II, Entry 51 - Held: Entry 51 
should be read not only as authorizing the imposition of an 
excise duty, but also as authorizing a provision which prevents 
evasion of excise duty - To ensure that there is no evasion 
G of excise duty in regard to manufacture of beer, the State is 
entitled to make a provision to prevent evasion of excise duty, 
though it is leviable at the stage of issue from the brewery -
Excise - Liquor. 
H 
98 
STATE OF U.P. & ORS. v. MIS MOHAN MEAKIN 
BREWERIES LTD. & ANR. 
LIQUOR: 
99 
Beer - Process of Brewing - Discussed - Excise laws. 
The instant appeals were filed ,by the State and the 
Breweries. The appeals by the State related to imposition 
of duty and additional duty on excess wastage in the 
brewery. The appeals by the Breweries related to 
imposition of duty and additional duty on excess bottling 
wastage. 
A 
B 
By impugned order, the High Court had directed the C 
state government to decide the revision afresh "after 
calculating the stock of beer for the pur.pose of
1;ariginal 
Rule 53 of UP Brewery,Rules 1961 (Para 912 of UP Excise 
Manual as it then existed) and section 28-A of the UP 
Excise Act, 'when after filtration the same has assumed o 
the shape as a finished product which is normally 
consumed by human beings as beverage or drink" .. It 
also held that the point at which the liquor manufactured 
by the brewery is exigible to duty is at the stage, when 
the beer is capable of being consumed by human beings 
E 
as a beverage comes into existence and the deficiency 
should be worked. out with reference to measurement at 
such stage. The High Court rejected the procedure 
adopted by the appellants· that the process of 
manufacture is complete and the liquor becomes exigible 
F 
to duty when the wort along with the yeast is received in 
the fermenting vessels and ferments and that is the stage 
of ascertaining excess manufacturing wastage. (excess 
deficiency). 
The stand of the Brewery was that the wastage G 
allowance was to be given, not with reference to the 
quantity in the fermentation tank, but with reference to the 
quantity in the storage/bottling tanks (after completion of 
fermentation and filtration process) when the 
manufacturing process is complete and only bottling 
H 
100 SUPREME COURT REPORTS [2011] 14 (ADDL.) S.C.R. 
A remains; that the measurement should be taken only 
when the manufacture is complete and not when it is still 
in the process of manufacture; and the manufacture 
process is completed not when the wort is in the 
fermentation tank but only when the filtration process is 
s finished. 
The questions which arose for consideration in the 
instant appeals were: At what stage does the. beer 
manufactured is exigible to duty; and whether the 
procedure adopted by the appellants for ascertainjng 
C excess manufacturing wastage (excess deficiency) is 
proper. 
Disposing of the appeals, the Court 
0 
HELD: 1. The process of brewing beer involves 
malting, mashing, boiling, fermentation, separation of 
yeast from the beer, ageing and finishing. The fermented 
alcoholic liquor that can be identified as 'beer' comes into 
existence on completion of the process of fermentation. 
E Ageing is carried out only in the manufacture of certain 
types of beer, by storing beer in storage tanks for certain 
period. Filtration removes the remaining yeast (the major

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