1979 (1) TMI 103 - CGOVT - Central Excise

Summary

Issues:
1. Seizure of drugs by Central Excise officers.
2. Alleged manufacturing of excisable proprietary medicines without required license.
3. Imposition of penalties, confiscation of drugs, plant, machinery, and duty payment demand.
4. Dispute over the labeling of products as proprietary medicines.
5. Appeal against the Collector's order.

Analysis:
1. The case involved the seizure of drugs valued at Rs. 5530 from the factory of the appellants by Central Excise officers on the grounds of manufacturing, storing, and removing excisable proprietary medicines without the necessary Central Excise License. The Collector imposed penalties, confiscated the drugs, plant, machinery, and demanded duty payment for earlier manufactured medicines.

2. The appellants disputed the Collector's finding that their products were proprietary medicines based on the labeling. They claimed to have applied for approval of their labels, presumed acceptance, and argued lack of mala fide intention. They also contended that the labels did not bring their products within the definition of proprietary medicines.

3. The Board examined the disputed labels and agreed with the appellants that the labeling did not classify the products as proprietary medicines. The Board found that the information on the labels complied with the Drugs and Cosmetic Rules, 1945, and did not highlight the manufacturer's name over the product name. Consequently, the Board set aside the Collector's order.

4. The judgment highlighted the importance of label design in determining the classification of products as proprietary medicines. It emphasized the need for the manufacturer's name not to overshadow the product name on the label to avoid misclassification. The case underscored the significance of adherence to regulatory requirements in labeling practices to avoid legal implications.

5. The appellants' successful appeal against the Collector's order demonstrated the importance of presenting evidence and legal arguments to challenge adverse decisions. The case also illustrated the role of regulatory bodies, such as the Board, in reviewing and overturning decisions based on compliance with relevant laws and regulations.