1982 (11) TMI 53 - HC - Central Excise

Summary

Issues:
Whether the respondent company can be said to have used a mark, symbol, monogram, or label in marketing its medicinal preparations, and whether this usage attracts excise duty under item 14-E of the First Schedule to the Central Excises and Salt Act.

Analysis:
The writ appeal before the High Court of Madras involved a dispute regarding the liability of the respondent pharmaceutical company to pay excise duty on certain medicinal preparations. The respondent, a manufacturer of pharmaceutical products, had obtained a license for manufacturing products subject to excise duty. However, the Central Excise authorities demanded duty payment on three specific products. The key question was whether the label used by the respondent indicated a connection between the medicine and the manufacturer, thereby attracting excise duty under item 14-E of the Act.

The label on the products included the name of the products as per the Indian Pharmacopoeia, the manufacturer's name, a poison warning, and a symbol with the words 'Indo-French'. The Central Government Standing Counsel argued that the presence of a symbol or monogram connecting the medicine to the manufacturer should trigger excise duty under item 14-E. However, the Court examined the definition of 'Patent or proprietary medicines' under Explanation I to item 14-E, which required the symbol to indicate a connection in the course of trade between the medicine and the manufacturer.

The Court found that the symbol used by the respondent, a small rectangle with the words 'Indo-French', was not distinctive enough to establish a trade connection. The label prominently displayed the full name of the respondent company, making it clear that the products were manufactured by them. The Court distinguished previous cases where distinctive features like photographs, signatures, or initials were used to connect medicinal preparations with manufacturers. In this case, the symbol used was deemed insignificant and did not establish a trade connection between the medicine and the respondent.

Ultimately, the High Court upheld the decision of the learned single Judge, ruling that the symbol used by the respondent was not distinctive to attract excise duty under item 14-E. The Court noted that the symbol was not a registered trademark of the respondent and did not indicate a trade connection. The appeal was dismissed, and no costs were awarded in the matter.