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TMI Blog2013 (5) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... tate Excise Duty under the Act. The Division Bench came to the conclusion that Excise Duty cannot be charged on the said product because the dosages of narcotic in the products are much less the prescribed limit. Another judgment relied upon by the petitioner is Amrik Singh v. The State of Punjab (1996 (4) TMI 447 - PUNJAB & HARYANA HIGH COURT), where also the Codeine Phosphate was being used for preparation of cough syrups in the proportion of 9.5 mg per 5 ml, i.e. per dosage unit and the Court held that the preparation in question falls within the ambit of the exception as contained in the item at Serial No. 35 of the Notification issued by the Central Government. Revenue directed not to charge excise duty on the cough syrups being prepared and sold by the petitioner under the brand names of Xenocof-D, Instacodin, Codistar Cough Syrup, Wilecod Syrup if it contains Codeine Phosphate less than the prescribed limits. - Decided in favor of assessee. - Writ Petition No. 1462 of 2009 (MS) - - - Dated:- 11-1-2013 - Sudhanshu Dhulia, J. For the Petitioner : Mr. P. R. Mullick, Advocate. For the Respondents : Mr. B.D. Kandpal, Deputy Advocate. JUDGMENT 1. Heard M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, mitigation or prevention of disease in human beings or animals; 4. Narcotic drug or narcotic is defined under Section 2(h) of the Act, which reads as under :- 2. Definitions. In this Act, unless the context otherwise requires, - (a) (b) (c) (d) (e) (f) (g) (h) "narcotic drug" or "narcotic" means a substance which is coca leaf, or coca derivative, or opium, or derivative of opium, or Indian hemp and shall include any other substance, capable of causing or producing in human beings dependence, tolerance and withdrawal syndromes and which the Central Government may, by notification in the Official Gazette, declare to be a narcotic drug or narcotic;] 5. In other words, a narcotic drug or a narcotic would mean coca leaf and its derivatives, opium or derivatives of opium, etc., which the Central Government may by notification declares to be a narcotic drug or narcotic . 6. There is a notification by the Central Government No. G.S.R. 762, dated 7.8.1981 issued in pursuance of clause (b) of Section 2 of the Act wherein at Serial No. 35 Codeine Phosphate has been declared to be a narcotic product. The relevant portion of the notification i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) Medicinal preparations not containing alcohol but containing narcotic drug or narcotic. 2. Medicinal preparations in Ayurvedic, Unani or other indigenous system of medicine (i) Medicinal preparations containing self-generated alcohol which are not capable of being consumed as ordinary alcoholic beverages. Nil (ii) Medicinal preparations containing self-generated alcohol which are capable of being consumed as ordinary alcoholic beverages. [Four per cent. ad valorem ] (iii) All others containing alcohol which are prepared by distillation or to which alcohol has been added. [Six per cent. ad valorem ] (iv) Medicinal preparations not containing alcohol but containing narcotic drug or narcotic. [Six per cent. ad valorem ] 10. However, counsel for the petitioner would argue that Codeine Phosphate though admittedly is narcotic or narcotic drug, the petitioner is not selling pure codeine phosphate but it is compounded with one or more other ingredients and contains 10 milligrams of codeine phosphate per dose and a concentr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge unit not more than 135 mg are excluded from being classified as narcotic drug or narcotic within the meaning of the said expression under Section 2 (h) of the said Act. Once the product of the petitioners discloses Dextropropoxyphene-HCL which in terms contains Dextropropoxyphene base to the extent of 70 mg, which fact has not been disputed by the respondents at any stage of the proceedings, even in the affidavit in reply filed by them, obviously such a product would stand exempted in terms of the said notification and would not be classifiable as narcotic drug or narcotic under the said Act. 14. It is also not in dispute that the excise duty at the rate of 20 % is sought to be levied in terms of clause 1 (iii) of the Schedule to the said Act. The said clause relates to medicinal preparations not containing alcohol but containing narcotic drug or narcotic. Once it is not in dispute that the medicinal preparations of the petitioners cannot be said to contain narcotic drug or narcotic for the reasons stated above, the question of bringing the said product within the ambit of clause 1 (iii) of the Schedule of the said Act does not arise at all. Neither the impugned order nor any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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