In wine there is truth, as the saying goes, but that does not necessarily mean that labels on American wine bottles should list information on the grapes that make the stuff.

So said the U.S. Court of Appeals here yesterday as it reinstated a rule which allowed a wine to call itself, for example, a "Chardonnay" without telling the consumer that only 75 percent of the grapes used in that wine are required to be of the fine white Chardonnay variety.

The appeals court, however, agreed with U.S. District Judge Gerhard A. Gesell that the Treasury department's Bureau of Alcohol, Tobacco and Firearms (ATF), which regulates wine labels, had failed to justify rules allowing a wine to be described as from the "Napa Valley" in California, for example, when only 85 percent of its grapes are grown there.

Moreover, the appeals court said -- as Gesell did in his lower court ruling -- that ATF must review a rule which permits wineries to say they "produced" a certain wine when in fact they fermented only 75 percent of it or purchased it from someone else.

In an unsigned opinion, the appeals court said that the bureau must reassess the regulations on such geographical and winemaking terms to determine if they "meaningfully control misleading labeling and advertising." Chief Judge Spottswood W. Robinson III, Senior Judge Carl McGowan and Judge Harry T. Edwards participated in the decision.

Three wine connoisseurs had challenged the regulations, which they said allowed wineries to indulge in deceptive statements on their labels.

The appeals court upheld the bureau's rule on labeling for so-called "varietal" wines, like Chardonnay and Pinot Noir, which are named for the variety of grape used to make them. The rule sets the 75 percent minimum standard for the variety of grape named on the bottle, but it does not require disclosure that other grapes may have been blended in.

Gesell said that a consumer was likely to assume that a bottle labeled simply "Chardonnay" was the 100-percent product of Chardonnay grapes. But the appeals court ruled that ATF had justified its decision not to require that the 75 percent rule be disclosed on bottle labels, agreeing with the bureau's contention that consumers would be led to believe that wines containing a higher percentage of the named grape are better, when in fact that is not necessarily the case.

The bureau had also argued that requiring the grape percentages on the labels would lead to cluttered labels and confused consumers.