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Issues involved: Scope and ambit of tariff item 14-E of the First Schedule to Central Excises and Salt Act, 1944 and rules framed thereunder.
Summary: The petitioner, a manufacturer of pharmaceutical products, classified some products as non-excisable based on Indian Pharmacopoeia. However, a notice was issued demanding excise duty on these products. The petitioner contended that the products did not fall under tariff item 14-E and that the recovery of excise duty was not sustainable under the rules. The objections were overruled, leading to an appeal and subsequent legal proceedings. The main contention was whether the three medicinal preparations manufactured by the petitioner fell under tariff item 14-E. The court analyzed the definition of 'patent and proprietary medicines' under Explanation 1 of the item. It was argued that the marks used on the products indicated a proprietary interest by the manufacturer. However, the court found that the marks used were not distinctive to the specific products in question but were general marks used across all articles manufactured by the petitioner. Therefore, the court held that the products were not excisable under tariff item 14-E and were not liable for excise duty. As a result of this finding, the court did not delve into the other contentions regarding the applicability of specific rules. The writ petition was allowed, and the demand for excise duty was quashed. This judgment clarifies the interpretation of tariff item 14-E and the definition of 'patent and proprietary medicines' under the Central Excises and Salt Act, 1944, providing guidance on the classification of pharmaceutical products for excise duty purposes.
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