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2012 DIGILAW 323 (KER)

Santhi Hariharan v. Excise Commissioner

2012-03-19

C.N.RAMACHANDRAN NAIR, K.VINOD CHANDRAN

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Judgment :- C.N. Ramachandran Nair, J. 1. The appellant/petitioner purchased from an importer a consignment of Australian made "Loxton De-alcoholized Wine" which, while under transport from Coimbatore to Cochin, was seized from the godown of the transporting Company by the respondents vide Annexure-C seizure mahazar dated 21.06.2011. Even though the product as described in the label affixed on the bottles clearly stated that it is "de-alcoholized wine", the Excise authorities suspected that the item is "alcoholic liquor", liable for confiscation. After seizure of the consignment, six bottles were sent for analysis to the Chemical Lab, Ernakulam run by the Government and as per report produced, the alcoholic content ranges from 0.20% to 0.41% in the six bottles. However, even after being satisfied that the product is not "wine" as understood in the market, nor under the Abkari laws and it is alcohol removed wine containing only traces, the goods were not released to the appellant/petitioner, which led to their sending notice to the respondents on 30.11.2011. When there was no response, appellant/ petitioner filed writ petition on 3.12.2011. Nearly after six months after seizure and after receiving notice in the W.P.(C), the respondents proceeded to register Crime Case before the Magistrate's Court on 9.12.2011. In the Crime Case, originally the transporter was made the sole accused, but later the appellant/petitioner and the distributor in Kerala, viz., the 5th respondent, were made accused. When anticipatory bail was moved in the matter, a learned Judge of this Court, vide Exhibit P8 produced in the writ petition, noticed that the product is not an alcoholic drink and after observing that no offence is made out, granted anticipatory bail. In the writ petition filed for declaration that the seizure is illegal and for release of goods, the learned Single Judge passed a conditional order, directing release of the goods but by prohibiting sale of the goods within the State, against which the Writ Appeal is filed. 2. During hearing of the Writ Appeal against the interim order, both parties agreed for withdrawal of the writ petition to this Court for hearing and disposal. Accordingly, we have heard Sri.C.C.Thomas, learned Senior Counsel appearing for the appellant/ petitioner and also Sri.Sujith Mathew Jose, learned Special Government Pleader appearing for the respondents. 3. The documents and annexures referred to in this judgment are those in the Writ Appeal. Accordingly, we have heard Sri.C.C.Thomas, learned Senior Counsel appearing for the appellant/ petitioner and also Sri.Sujith Mathew Jose, learned Special Government Pleader appearing for the respondents. 3. The documents and annexures referred to in this judgment are those in the Writ Appeal. The order under challenge in the writ petition is the seizure mahazar issued after conducting search under Section 31 of the Abkari Act, wherein it is clearly stated that the seizure is based on the bona fide belief that the seized material will be sold for use as a substitute for alcoholic liquor. Obviously the authorities seizing the goods were misled by the name in the product, which is "wine", though it is clearly stated in the label attached to the bottle that it is "de-alcoholized", containing less than 0.50% alcohol. We cannot blame the Excise authorities for seizing the product sold in the market as wine because wine normally sold is alcoholic drink, which contains alcohol ranging from 8% to 15.5% and it can be sold only after obtaining licence from the Excise authorities. However, the question is whether even after getting the test result from the Government Laboratory, vide Annexure-F, which shows that the percentage of alcohol ranges from 0.20% to 0.41% in the six bottles sent for examination, whether the respondents are justified in harassing the appellant/petitioner in filing criminal complaint after six months of seizure and after filing a writ petition in the High Court for quashing the seizure and for release of the goods. 4. The only question to be considered is whether the de-alcoholized wine, containing insignificant percentage of alcohol ranging from 0.20% to 0.41%, is a commodity that could be seized pursuant to search under Section 31 of the Abkari Act. The Special Government Pleader appearing for the respondents heavily relied on the definition of "liquor" contained in Section 3(1) of the Abkari Act, which defines "liquor" as "includes spirits of wine, arrack, spirits, wine, toddy, beer and all liquid consisting of or containing alcohol". From this definition clause, certainly the Government Pleader is right in contending that so long as there is any trace of alcohol in any liquid, the same answers the description of "liquor" and irrespective of the percentage of alcohol, such commodity can be called "liquor". From this definition clause, certainly the Government Pleader is right in contending that so long as there is any trace of alcohol in any liquid, the same answers the description of "liquor" and irrespective of the percentage of alcohol, such commodity can be called "liquor". However, the question is whether there is any provision in the Abkari Act or Rules to seize or proceed against liquid containing traces of alcohol; or percentage of alcohol less than 0.50%. The production and marketing of wine is covered by licence under the Kerala Winery Rules, 1970. "Wine", as defined under Rule 2(12), means "the product obtained on alcoholic fermentation of grape juice or pulp or juice of any other fruit natural or forfeited, the alcoholic content of which does not exceed 42 per cent of proof spirit". Rule 3 of the Foreign Liquor Rules specifically states that the maximum strength at which beer shall be sold is 6% v/v and the alcoholic content of wine which shall be sold is 8% v/v to 15.5% v/v. 5. Going by the definitions under the provisions of the Winery Rules and the Foreign Liquor Rules what is clear is that alcoholic-wine produced and marketed should contain alcohol ranging from a minimum of 8% and maximum of 15.5% by volume. Further, FL 11 licence, which is a beer/wine licence, provides in Condition No.16 that the maximum strength of wine shall be 12% by volume. So much so, "wine" as an alcoholic drink, referred under the various provisions of the Abkari Act, Foreign Liquor rules and the Winery Rules and also under the licence, should contain percentage of alcohol ranging from 8% to 12%. Wine as understood in the Abkari Act, is the product containing alcohol of the above percent. Therefore, the question is whether the product seized which contains less than 0.5% alcohol also answers the definition of "wine". 6. In this regard, we feel, the question has to be considered with reference to the Customs Tariff Act, which describes the product as "non-alcoholic drink" falling under the Tariff heading 2202 and the bill of entry produced shows that the item is allowed to be imported on payment of Customs Duty treating it as "non-alcoholic drink with less than 0.5% alcohol". It may also be noticed that the product is made in Australia and the description of the product specifically states that it is "de-alcoholized". It may also be noticed that the product is made in Australia and the description of the product specifically states that it is "de-alcoholized". In fact, the manufacturing procedure is explained by the manufacturer in Exhibit R5(b) letter issued by them, wherein they say that after manufacturing wine, the product is boiled to vaporize and remove alcohol, making it a "de-alcoholized drink". Of course, in the course of removal of alcohol, may be traces remain in the wine, which is what is evident from the test result, showing alcohol content ranging from 0.20% to 0.41%. In fact, similar products are available in the open market with different brand name, but sold as "wine" and the product description shown in one of the bottles produced in Court by the learned counsel appearing for the appellant states that the percentage of alcohol content is declared below 0.50%, which is the alcohol content normally available even in fruit juices. The respondents have no explanation as to why other branded wine sold as de-alcoholized wine is permitted to be sold without any licence and without restriction in all the super markets in Kerala. Even though the learned Government Pleader submitted that Excise authorities on noticing it are free to take action if such items are found sold without licence, we do not find any basis or substance in this contention, because non-alcoholic beverages, with less than 0.50% alcohol content, can be sold without any licence from the Excise authorities as the same is not an alcoholic drink as understood under the Excise Act and Rules. 7. After going through the entire records and test result produced by the respondents themselves vide Annexure-F, we are satisfied that the seizure is under a mistaken impression that the product contains alcohol content in excess of what is stated therein and only on that apprehension goods are seized. In our view, once test results prove that the product description as stated in the label is correct, the Department should regretfully recall/cancel the seizure mahazar and release goods instead of harassing the appellant/petitioner and others by registering crime after six months to justify the action in the High Court when the appellant/petitioner filed writ petition for cancellation of seizure mahazar and for release of the goods. We, accordingly declare that the product seized containing less than 0.5% alcohol is not an "alcoholic liquor" or "wine" as covered by the Abkari laws of the State and the Excise authorities have no authority to seize the goods. We, accordingly, declare the seizure as illegal and quash Annexure-C seizure mahazar. Consequently, there will be a direction to the Judicial First Class Magistrate-I, Ernakulam to release the goods in custody in CR.No.56 of 2011 of Excise Range, Ernakulam on production of this judgment. The Writ Appeal and the Writ Petition are allowed as above.