1999 (3) TMI 344 - AT - Central Excise

Summary

Issues: Classification of Mannitol Injection B.P. 20% W/V as patent or proprietary medicine under sub-heading 3003.10 of the Schedule to the Central Excise Tariff Act.

The judgment dealt with the issue of whether Mannitol Injection B.P. 20% W/V should be classified as a patent or proprietary medicine under sub-heading 3003.10 of the Schedule to the Central Excise Tariff Act. The appellants argued that the distinct design on the label, consisting of four bars, did not establish a proprietary interest and that the use of bars was merely for practical purposes to differentiate between medicines. They contended that the presence of bars did not convert a generic medicine into a patent or proprietary one, especially since there was no exclusive right associated with these bars. The appellants also highlighted the lack of a legal requirement for generic medicines to have plain labels and referenced a Supreme Court decision to support their stance.

The respondent, on the other hand, supported the findings in the impugned order, emphasizing that the design of the label, including the bars, indicated a connection between the manufacturer and the medicine, thus qualifying it as a patent or proprietary medicine. They argued that the bars formed part of the label's design and were integral to establishing this connection, rejecting the appellants' claim of lack of opportunity to defend against the allegations regarding the label design.

Upon considering the arguments presented, the Tribunal found merit in the appellants' submissions. They noted that unless the bars and color scheme on the label were proven to be proprietary, they could not render the medicine as a patent or proprietary one. The Tribunal referenced Note 2 to Chapter 30 of the Schedule to the Central Excise Tariff Act, highlighting the absence of a requirement for generic medicine labels to be plain. Furthermore, the Tribunal cited a Supreme Court decision that emphasized the need for distinctive marks on the container or packaging to establish a relationship between the medicine and the manufacturer, without equating such identification with proprietary marks. Referring to a previous case, the Tribunal concluded that for a medicine to be considered proprietary, the marks, symbols, or container design must indicate a special preparation made by the manufacturer, demonstrating a proprietary interest in the medicine.

Based on these considerations and the precedent set by the referred case, the Tribunal ruled in favor of the appellants, determining that Mannitol Injection B.P. 20% W/V was not a patent or proprietary medicine. Consequently, the Tribunal set aside both orders and allowed both appeals.