1976 (9) TMI 46 - HC - Central Excise

Summary

Issues Involved:
1. Liability of excise duty on medicinal preparations.
2. Limitation period for the demand of excise duty.

Summary:

Issue 1: Liability of Excise Duty on Medicinal Preparations
The petitioner, a pharmaceutical company, challenged the orders of the Assistant Collector, Central Excise, the Appellate Collector, and the Central Government, which levied excise duty on certain medicinal preparations. The Assistant Collector held that the medicinal preparations were liable to excise duty as they bore "their Brand Name, Trade Mark, Symbol, Monogram and also their firm's Name." The Appellate Collector affirmed this, stating that the labels on the containers established a connection in the course of trade between the medicines and the manufacturer, thus falling under Item 14E of the Central Excise Tariff. The Central Government also upheld this classification, noting that the labels had a "colour symbol/monogram, name of the manufacturer etc." and thus correctly classified the medicines as P or P medicines assessable under Tariff Item 14-E.

The petitioner contended that the medicines did not have any brand name or symbol indicating a connection with the petitioner and thus were not liable to excise duty. However, the court found that the calligraphic letters used for the name 'Ramsey' and the geometrical design of the circle with the name 'Ramsey' printed both vertically and horizontally constituted a distinctive mark. This indicated a connection in the course of trade between the medicines and the petitioner, thus falling within the ambit of Explanation I to Item 14-E of the First Schedule to the Act. The court rejected the petitioner's contention, holding that the medicinal preparations were liable to excise duty.

Issue 2: Limitation Period for the Demand of Excise Duty
The petitioner argued that the demand for excise duty was time-barred under Rule 10 of the Central Excise Rules, 1944. The Appellate Collector and the Central Government held that the demand was not time-barred as it came within Rule 10A of the Rules, which has no time limit for recovering excise duty. The court noted that there was no previous assessment or payment of duty on the medicines in question, nor was there a nil assessment. Citing the Supreme Court's explanation in N.B. Sanjana v. The Elphinstone Spinning and Weaving Mills Co. Ltd., the court held that Rule 10 did not apply as there was no prior assessment or payment. Thus, the case fell under Rule 10A, and the demand was not time-barred.

Conclusion:
Both contentions by the petitioner failed. The court dismissed the petition, holding that the medicinal preparations were liable to excise duty and the demand was not time-barred. There was no order as to costs.