Dosage-based notification exclusion barred excise duty on Dextropropoxyphene formulations falling within the permitted threshold.

Preparations for oral use containing 65 mg of Dextropropoxyphene per dosage unit fell within the notification exclusion for products containing not more than 125 mg per dosage unit, so they did not answer the statutory description of a narcotic drug or narcotic under Section 2(h) of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. As a result, State Excise Duty could not be levied on those formulations, and the demand was held unsustainable. The stated principle is that a product falling within a specific dosage-based exclusion in a notification cannot be treated as a narcotic for excise purposes.

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Issues: Whether medicinal formulations containing 65 mg of Dextropropoxyphene per dosage unit were classifiable as a narcotic drug or narcotic under Section 2(h) of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 and liable to State Excise Duty.

Analysis: Section 2(h) empowers the Central Government to declare substances as narcotic drugs or narcotics by notification. The notification dated 12 June 1986 excluded preparations for oral use containing not more than 125 mg of Dextropropoxyphene base per dosage unit. The subject formulations admittedly contained only 65 mg per dosage unit, which fell within the exclusion. The earlier Division Bench decision on the same notification and the same drug composition was applied, and the formulation was held not to answer the statutory description of a narcotic drug or narcotic.

Conclusion: The formulations were not narcotic drugs or narcotics under Section 2(h) of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, and the demand of State Excise Duty was unsustainable.

Final Conclusion: The petition succeeded, the impugned demands were quashed, and the petitioners were granted consequential relief and costs.

Ratio Decidendi: Where a notification issued under Section 2(h) specifically excludes preparations below a stated dosage threshold, a product falling within that threshold cannot be treated as a narcotic drug or narcotic for excise purposes.

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