Registered brand name on medicines can trigger excisability, but approved clearances cannot support a time-barred duty demand.

A registered brand name such as "Dabur" printed on medicinal preparations, labels, cartons and containers can bring the goods within Tariff Item 14E because it indicates a trade connection between the goods and the manufacturer, making the preparations excisable. However, where clearances were made after departmental approval of classification and labels, Rule 9(2) cannot be used to sustain a later demand as if the goods had been clandestinely removed. A demand raised beyond the prescribed period is time-barred, and the consequential fine and penalties under the Central Excise Rules cannot survive.

---

---

Issues: (i) Whether the medicinal preparations bearing the registered mark "Dabur" were classifiable as P or P medicines and liable to duty under Tariff Item No. 14E of the Central Excise Tariff. (ii) Whether the duty demand and penalties could be sustained under the Central Excise Rules in view of departmental approval and limitation.

Issue (i): Whether the medicinal preparations bearing the registered mark "Dabur" were classifiable as P or P medicines and liable to duty under Tariff Item No. 14E of the Central Excise Tariff.

Analysis: The medicinal products bore the mark "Dabur" on labels, caps, cartons and containers. The mark was admitted to be a registered trade mark used in relation to the petitioner's medicines. Explanation I to Tariff Item 14E treats as excisable a medicinal preparation carrying a brand name, that is, a name or registered trade mark indicating a connection in the course of trade between the goods and the manufacturer. A registered and distinctive mark used on the medicines therefore brought the goods within the scope of the tariff entry.

Conclusion: This issue was decided against the assessee; the goods were held liable to excise duty under Tariff Item No. 14E.

Issue (ii): Whether the duty demand and penalties could be sustained under the Central Excise Rules in view of departmental approval and limitation.

Analysis: The goods had been cleared after approval of the classification and labels by the Central Excise officers, and the department had knowledge of the clearances. Rule 9(2) was held inapplicable because it is meant for clandestine clearances in breach of prescribed procedure, not for a later attempt to levy duty on goods earlier treated as non-excisable. The demand was also held to be beyond the permissible period and therefore time-barred. On that basis, the penalties under Rule 173Q and the fine in lieu of confiscation could not survive.

Conclusion: This issue was decided in favour of the assessee; the duty demand, fine and penalties were set aside.

Final Conclusion: The classification of the goods as excisable was upheld, but the consequential demand of duty and penal consequences were quashed on the grounds of inapplicability of the invoked rule and limitation.

Ratio Decidendi: A registered brand name indicating trade connection can render a medicinal preparation excisable under the relevant tariff entry, but Rule 9(2) cannot be invoked for goods cleared under approved departmental practice, and a demand raised beyond the prescribed period is not sustainable.

---