1982 (8) TMI 59 - HC - Central Excise

Court upholds excise duty on Homeopathic injections under Tariff Item No. 14E, citing composition, standards, and exemptions.

The High Court upheld the decision of the authorities to assess excise duty on Homeopathic injections under Tariff Item No. 14E, rejecting the appellant's ... Medicines - Demand - Short levy Issues:1. Classification of Homeopathic injections for excise duty under Tariff Item No. 14E.2. Interpretation of Rule 2(dd) of the Drugs and Cosmetics Rules in relation to Tariff Item 14E.3. Prohibition on manufacturing Homeopathic medicines administered by parenteral route under the Drugs and Cosmetics Act.4. Application of limitation under Rule 10 of the Central Excise Rules, 1940.5. Estoppel against the statute in raising additional demands.Analysis:1. The case involves the classification of Homeopathic injections for excise duty under Tariff Item No. 14E. The appellant, a proprietary firm, manufactured and cleared Homeopathic injections without paying excise duty. The authorities assessed the injections under Item No. 14E, leading to demands for payment. The appellant contended that the injections should be exempt based on their composition. The Collector of Central Excise and the Government rejected the appellant's claims, leading to a writ petition before the High Court.2. The interpretation of Rule 2(dd) of the Drugs and Cosmetics Rules was crucial in determining the applicability of the exemption under Tariff Item 14E. The appellant argued that the rule introduced in 1969 should not be retroactively applied to their case, as the injections were manufactured before its promulgation. The court clarified that Rule 2(dd) clarified existing provisions and did not have retrospective effect, supporting the authorities' decision to assess excise duty on the injections.3. The prohibition on manufacturing Homeopathic medicines administered by the parenteral route under the Drugs and Cosmetics Act was a significant issue. The Act specified standards for drug manufacture, including Homeopathic medicines. The court highlighted that the appellant failed to establish compliance with the standards specified in the Homeopathic Pharmacopoeia, leading to the conclusion that the injections were not eligible for exemption under Tariff Item 14E.4. The application of limitation under Rule 10 of the Central Excise Rules was raised by the appellant at a later stage, arguing that the demand for excise duty was time-barred. However, the court rejected this plea, stating that the appellant should have raised the issue earlier to allow the respondents to respond adequately. As a result, the plea of limitation was not entertained.5. Lastly, the appellant's argument of estoppel against the statute in raising additional demands was dismissed by the court. The principle of estoppel was deemed inapplicable in this context, emphasizing that statutory provisions cannot be overridden by estoppel. The court partially allowed the appeal, directing the parties to bear their own costs.This detailed analysis of the judgment highlights the key legal issues surrounding the classification of Homeopathic injections for excise duty, interpretation of relevant rules, compliance with drug manufacturing standards, application of limitation rules, and the principle of estoppel against the statute.