TaxTMI 
TaxTMI 
2012 (5) TMI 864
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....nce was granted with the condition that the petitioner's company will subscribe to the ISI specifications for toilet soaps and while granting sanction, the percentage of Sodium Soap Anhydrous in respect of Lux Toilet Soap was prescribed between 55 to 75, whereas in respect of Breeze Toilet Soap it was prescribed between 50-75, but in both the specifications a rider was imposed that the manufacturing should conform to the ISI specifications for toilet soaps. After the grant of licence, manufacturing was started by the petitioners' company and on 12.4.1990 inspection was conducted by the Drug Inspector and after conducting the inspection, a notice was issued to the petitioners' company on 31.5.1993, to which petitioners' company replied by means of letter dated 28.6.1993. Thereafter, the petitioners' company gave another reply on 1.7.1993. The sample of the petitioners' company was forwarded to the public analyst, who after testing the sample, submitted his report dated 11.10.1993 in which it was found that Lux and Breeze toilet soaps were not conforming to the ISI specifications as Total Fatty Matter ( for short "TFM') in respect of Breeze toilet soa....
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....d prior to 1.2.1983, but by Act No.68 of 1982 the word stands included from 1.2.1983. It is, therefore, clear that the soap was included in the word 'cosmetics' w.e.f. 1.2.1983. The formula which was submitted by the petitioners' company at the time of grant of licence under which they were supposed to manufacture the soaps, was accepted by them and they agreed that they would comply with the ISI specifications and a specific endorsement was made in the licence to that effect. The percentage was also indicated for toilet soaps in Table-I of the Indian Standard Specification for Toilet Soap and the lowest grade-3 requirement of TFM is 60%. The samples tested were found to be much below the TFM prescription. It is also stated that the petitioners' company had also specifically displayed on their label of soaps that it contains TFM 50% and it is only incorrect to say that no standard was fixed and the standard, which was fixed in respect of toilet soaps came into effect from 27.10.1993 and by GSR dated 27.10.1993 toilet soap was included in Schedule-S, but it does not mean that the petitioners were free to manufacture soap of any quality they like, but they were requir....
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.... 1973 Orissa 15 ; S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and another, (2007) 4 SCC 70 ; State of NCT of Delhi through Prosecuting Officer, Insecticides, Government of NCT, Delhi v. Rajiv Khurana, (2010) 11 SCC 469 ; and Pepsico India Holdings Pvt. Ltd. V. Food Inspector and another, (2011) 1 SCC 176. Learned AGA, on the other hand, has submitted that Rule 142 prescribes the conditions of licence in which a proviso has been added wherein it has been said that clauses (b1) and (c) shall not apply to the manufacture of soap and the procedure for testing of raw materials and the records to be maintained by a manufacturer of soap shall be such as are approved by the licensing authority. On the aforesaid reasoning, it has been submitted that the ISI specifications, which were prescribed at the time of grant of licence were binding upon the petitioners. The ISI prescriptions are existing since 1978 and a specific endorsement has been made in clause 6.1 of the Indian Standard Specification for Toilet Soap that method of test in IS: 286-1978 has been prescribed. The said testing was prevalent since 1978 and the specifications prescribed therein are applicable, so the petitioners....
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....prescriptions, which have been endorsed on the licence, were not within the domain of the Drug Controller and as such the endorsement is without authority of law and the petitioners cannot be prosecuted on account of the said ISI prescription as the said prescription was made applicable w.e.f. 27.10.1993 when the Central Government issued notification in this regard. The aforesaid argument of the counsel for the petitioners cannot be accepted on account of the fact that the ISI prescription has been made applicable for testing by the Indian Standard Specification for Toilet Soap (Second Revision) and in clause 6.1. of the said specification a method of testing for toilet soap has been prescribed in IS: 286- 1978. The said testing method is prevalent since 1978 and, therefore, if any endorsement was made in respect of ISI prescription, then it cannot be said that there was no power vested with the Drug Controller to make such endorsement or making of such amendment amounts to legislation on the part of the Drug Controller. The Drug Controller while granting licence only intended that the ISI specification no.I.S. 286-1978 is to be made applicable in respect of Breeze toilet soap an....
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....of misbranded cosmetics, cannot be accepted and is hereby rejected. The conditions are part of the licence as submitted by the learned AGA. Rule 142 provides that subject to the conditions stated therein in the licence. The licence contains a specific endorsement that according to the ISI prescription for toilet soaps the manufacture has to be made. Once it is found that the prescription is there, the manufacturing ought to have been made in accordance with the said prescriptions. The licence itself indicates the percentage of fatty contents from 55 to 75 % in the case of Lux toilet soap and in the case of Breeze toilet soap it is 50-75 %. Thus, the argument advanced by the counsel for the petitioners fails in this respect. The licence was granted to the petitioner's company for manufacturing of the aforesaid toilet soaps vide licence dated 28.2.1990. The licence was granted with the condition that the petitioner's company will subscribe to the ISI specifications for toilet soaps and while granting sanction, the percentage of Sodium Soap Anhydrous in respect of Lux Toilet Soap was prescribed between 55 to 75, whereas in respect of Breeze Toilet Soap it was prescribed betw....
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....of N.I. Act, which does not apply in the facts of the present case. Here in the case in hand, it has been found that the manufacturing was being done at the instance of the petitioners and they were in full knowhow of the fact that they obtained the licence and they have to manufacture the items in accordance with the specification prescribed therein. The case of Rajiv Khurana (supra) is also not applicable in view of the reasoning given above. The case of Pepsico India Holdings Pvt. Ltd. (supra) is also a case wherein it was found that insecticide residue was not beyond the permitted limit, whereas in the present case, the prescription is there. Rule 150A also lays down that the cosmetics in finished form was to conform to the IS specifications laid down from time to time by the Bureau of Indian Standards and under Rule 150 toilet soap is covered, as such the case of the petitioners is fully covered under the said rule as well. Learned AGA has placed reliance upon the case of M/s Modi Distillery (supra) to contend that in spite of lodging of complaint against the company for alleged offence under Section 44 of the Water (Prevention and Control of Pollution) Act, 1974 on the grou....