Customs exemption for imported flavouring extracts depends on the imported product's alcoholic strength, not the end-product.

Notification No. 11/97-Cus. was construed on its plain wording to make eligibility depend on the alcoholic strength of the imported flavouring extract itself, not on the strength of the beverage later manufactured in India. Because the imported goods contained 63.2% alcoholic content, they fell outside the notification's threshold. The argument that the test should be applied by reference to the end-product was rejected, as the exclusion was tied to the imported compound alcoholic preparation. The benefit of the notification was therefore denied and basic customs duty was upheld at the tariff rate.

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Issues: Whether the benefit of Notification No. 11/97-Cus. was available on the imported flavouring extracts by reference to the alcoholic strength of the imported goods or by reference to the alcoholic strength of the end-product to be manufactured in India.

Analysis: The notification was construed on its plain language, and the expression relating to alcoholic strength was held to qualify the imported product itself. The imported goods contained alcoholic content of 63.2%, which exceeded the threshold specified in the notification. The contention that eligibility should be tested with reference to the beverage ultimately to be manufactured was rejected, as the wording of the notification linked the exclusion to the imported compound alcoholic preparation and not to a future manufactured product.

Conclusion: The benefit of the notification was not available to the imported goods, and assessment at the tariff rate of basic customs duty was upheld against the importer.

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