Common parlance test excludes a beverage needing preparation from "ready-to-serve" exemption treatment.

A coffee and milk based preparation requiring water and further mixing before consumption was treated as prepared food under Tariff Item 1B rather than the residuary Item 68. In construing the exemption dispute, the expression "ready-to-serve beverage" was given its ordinary common parlance meaning, so a product needing heating, dilution, or stirring before use does not qualify as ready to serve, even if intended for drinking. Technical dictionary meanings were considered unnecessary where the term is well understood in everyday usage. On that basis, the product fell outside the exclusion in Notification No. 17/70-C.E. and remained eligible for exemption.

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Issues: Whether the product, a coffee and milk based preparation requiring addition of water before consumption, was classifiable as prepared or preserved food under Tariff Item 1B, and whether it was excluded from exemption as a ready-to-serve beverage under Notification No. 17/70-C.E.

Analysis: The product's composition, label description, and the assessee's own description showed that it was a prepared food falling under Tariff Item 1B and not the residuary Item 68. For deciding whether it was a ready-to-serve beverage, the controlling meaning was that expression in common parlance. A product that requires heating or adding water and stirring before it can be consumed cannot be regarded as ready-to-serve in the ordinary sense, even if it is intended as a drink. Technical dictionary meanings were held unnecessary where the expression is well understood in everyday use. Since the product was not a ready-to-serve beverage, it did not fall within the exclusion in the notification.

Conclusion: The product was held exempt from duty under Tariff Item 1B and the review notice was discharged in favour of the assessee.

Ratio Decidendi: Where a tariff exemption uses an expression of everyday usage, its meaning must be determined in common parlance, and a product requiring further preparation before consumption is not a ready-to-serve beverage.

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