Homeopathic exemption denied for parenteral injections where statutory standards were not proved, and estoppel could not defeat tax liability.

Homeopathic injections administered by parenteral route were held not to qualify as homeopathic medicines for exemption under Tariff Item 14E because the manufacturer failed to prove conformity with the prescribed pharmacopoeial standards, and the relevant rules excluded parenteral administration from that category. The exemption was therefore unavailable and duty was payable from 19 March 1966 onwards. The plea that earlier departmental clearance created estoppel also failed, since estoppel cannot override a taxing statute or defeat a statutory levy.

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Issues: (i) Whether homeopathic injections administered by parenteral route were homeopathic medicines eligible for exemption under Tariff Item 14E of the Central Excise Tariff; (ii) Whether the demand could be defeated on the ground of estoppel against the authorities.

Issue (i): Whether homeopathic injections administered by parenteral route were homeopathic medicines eligible for exemption under Tariff Item 14E of the Central Excise Tariff

Analysis: Sections 16 and 18 of the Drugs and Cosmetics Act, 1940, read with the Second Schedule, permit manufacture only of drugs conforming to the prescribed standards. Homeopathic medicines were brought within the Schedule, but the appellant failed to establish that the injections manufactured and cleared by it were in accordance with the standards specified in the relevant homeopathic pharmacopoeias. Rule 2(dd) of the Drugs and Cosmetics Rules, 1945 clarified the position already implicit in the Act by excluding medicines administered by parenteral route from the definition of homeopathic medicines. The prior finding that such injections were not included in the relevant pharmacopoeias had become final.

Conclusion: The injections were not entitled to exemption under Tariff Item 14E, and duty was payable from 19 March 1966 onwards.

Issue (ii): Whether the demand could be defeated on the ground of estoppel against the authorities

Analysis: A demand raised under a taxing statute cannot be barred merely because the department had earlier permitted clearance of the goods; the doctrine of estoppel cannot override the statute.

Conclusion: The plea of estoppel failed.

Final Conclusion: The appeal succeeded only to the limited extent that the duty demand was confined to the period when the statutory control over homeopathic medicines had come into force, while the challenge to liability on merits and on estoppel failed.

Ratio Decidendi: Where a claimant fails to prove that the goods satisfy the statutory standards for homeopathic medicines, and the relevant rules exclude parenteral administration from that category, exemption under the tariff cannot be claimed; estoppel cannot defeat a statutory levy.

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