Notification-based exclusion for Dextropropoxyphene preparations bars excise levy where the dosage remains below the specified threshold.

Medicinal preparations containing Dextropropoxyphene-HCl at 70 mg per dosage unit fell within a Central Government notification excluding oral preparations containing not more than 135 mg of Dextropropoxyphene base from the definition of a narcotic drug or narcotic. Because the product was covered by that exclusion, it could not be treated as a medicinal preparation containing a narcotic drug or narcotic for the purpose of Clause 1(iii) of the Schedule to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. The State excise levy on the product was therefore unsustainable, and the impugned demand and classification were set aside with consequential reliefs.

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Issues: Whether medicinal preparations containing Dextropropoxyphene-HCl at 70 mg per dosage unit were liable to State excise duty under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 as preparations containing a narcotic drug or narcotic.

Analysis: The Act levies duty on dutiable medicinal preparations as specified in the Schedule. The definition of narcotic drug or narcotic includes substances declared by the Central Government by notification. The relevant notification excluded oral preparations containing not more than 135 mg of Dextropropoxyphene base per dosage unit from classification as a narcotic drug or narcotic. The product in question contained only 70 mg per dosage unit, and that factual position was not disputed. Once the preparation fell within the notification-based exclusion, it could not be treated as a narcotic drug or narcotic, and Clause 1(iii) of the Schedule, which applies only to medicinal preparations containing a narcotic drug or narcotic, was inapplicable.

Conclusion: The levy of State excise duty on the product was unsustainable and the petitioners were entitled to relief.

Final Conclusion: The impugned demand and classification were set aside, and the petition succeeded with consequential reliefs, including reimbursement and credit consequences in accordance with law.

Ratio Decidendi: Where a medicinal preparation falls within a Central Government notification excluding oral preparations below a specified dosage threshold, it cannot be classified as containing a narcotic drug or narcotic for the purpose of excise levy under the Act.

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