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1 1/2 cups unsifted all purpose flour
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1/2 cup confectioners sugar
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1 tsp. baking powder
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1 tsp. salt
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3/4 tsp. ground nutmeg
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1/2 cup milk
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1/2 cup water
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1/4 cup oil
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1 1/2 tsp. grated lemon peel
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3 eggs
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Oil for frying
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Confectioners’ sugar
Mix flour, 1/2 cup confectioners’ sugar, baking powder, salt and nutmeg in a small mixing bowl. Set aside. Combine milk, water, oil, and lemon peel in a medium saucepan. Heat to rolling boil over medium high heat. Add flour mixture all at once. Beat with a wooden spoon until mixture pulls away from the sides of the pan into a ball. Remove from heat; cool slightly. Add eggs, one at a time, beating after each addition.
Heat 2 to 3 inches oil in deep fryer or large saucepan to 350 degrees.
Drop by the tablespoonfuls into the hot oil. Fry 3 or 4 puffs at a time, 4 to 6 minutes, or until golden brown, turning over several times. Drain on paper towels. Sprinkle top of each puff with confectioners’ sugar.