TaxTMI 
TaxTMI 
2006 (8) TMI 217
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.... and Toilet Preparations (Excise Duties) Act, 1955. 2. The few facts, relevant for the decision in the matter, are that, the petitioners-company is the manufacturer of medicaments pursuant to the licence granted under the relevant statute and the Rules framed thereunder. The petitioners-company manufactures Dexovon capsules which, according to the petitioners, do not contain the narcotic drug as prescribed under the said Act. The said capsules contain a substance known as Dextropropoxyphene- HCl of 70 mg per dosage unit i.e. per capsule, which is according to the petitioners, much less than the prescibed limit to qualify the same to be medicinal preparations in terms of the clause No. 1(iii) of the Schedule to the said Act. ....
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.... No. 3 also directed Respondent No. 4 to initiate criminal proceedings against the petitioners for violation of the provisions of the said Act. On 23rd March 1999, the Respondent No. 4 seized the said product of the petitioners worth over rupees fifteen lakhs. The petitioners by their letter dated 25th March 1999 requested for reconsideration of the said decision which was treated as an appeal by Respondent No. 2 and, while admitting the said appeal for final disposal, under order dated 30th March 1999 it was directed to return the seized goods with further directions that the petitioners shall not manufacture the said product during pendency of the appeal. The petitioners made further submissions in detail to the Respondent No. 2 on ....
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....the product of the petitioners does not contain the DXC in that quantity. 6. The term "dutiable goods" has been defined under Section 2(c) of the said Act to mean the medicinal and toilet preparations specified in the Schedule as being subject to the duties of excise levied under the said Act. 7. The term "medicinal preparation" has been defined under Section 2(g) to include all drugs which are a remedy or prescription prepared for internal or external use of human beings or animals and all substances intended to be used for or in the treatment, mitigation or prevention of disease in human beings or animals. 8. The term "narcotic drug" or "narcotic" is defined under Section 2(h) to mean a substance which is coca leaf, or coca deriv....
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....m of Dextropropoxyphene per dosage unit as has been specified in the said notification issued by the Central Government in exercise of the powers under the said Act and with reference to the definition of the said expression under Section 2(h) of the said Act and, in case, the quantity is found to be less than 135 mg. per dosage unit, it cannot be classified as medicinal preparation containing narcotic drug or narcotic and, for the same reason, it would not fall within the expression "medicinal preparation" as specified under Clause 1(iii) of the Schedule of the said Act and, therefore, it could not be subjected to the State Excise Duty. It is, therefore, further contended that Dextropropoxyphene-HCl capsules manufactured by the petitioners....
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.... of the petitioners can be misused and, considering the same, it is not a fit case for grant of exemption from the excise duty. Even attention was sought to be drawn to the State List in the 7th Schedule to contend that it is within the Legislative domain of the State Legislature to levy tax on the manufacture of the medicaments containing narcotic drug or narcotic. 13. Plain reading of the Notification dated 12th June 1986 would disclose that any medicinal preparations containing Dextropropoxyphene base per dosage unit not more than 135 mg are excluded from being classified as narcotic drug or narcotic within the meaning of the said expression under Section 2(h) of the said Act. Once the product of the petitioners discloses Dextro....
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....g that there was no occasion for the respondents to classify the product of the petitioners being one as specified under clause 1(iii) of the Schedule of the said Act and, for the same reason it could not have been subjected to the licence under the said Act or to the State Excise Duty in terms of the said Act. 15. The decision of the Apex Court in M/s. .Baidyanath Ayurved Bhawan (Pvt.) Ltd., Jhansi v. The Excise Commissioner, U.P. and others, reported in (AIR 1971 SC 378) was on totally different issue where the quantity of Dextropropoxyphene or any similar such product was not in issue. The issue in that case was, whether the medicinal preparations contain alcohol or not. The quantity of alcohol was not subject matter to adjudicate. In....