9911796707
TMI Blog1980 (7) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... 2% plain vial 3. 1% Adrenaline vial 4. 2% Adernaline vial 5. 2% Adrenaline cartridges 6. 5% heavy ampules 7. 4% topical vials 8. 5% ointment tubes 9. 2% jelly tubes 10. 2% Viscous vial 11. Butazolidin 3ml. ampules. 12. Irgapyrin 3 ml. ampules. 13. Irgapyrin 5 ml. ampules. Items 1 to 10 are injections and items 11 to 13 are or a drugs. 2. The petitioner challenges in this petition the validity of the impugned demands made by the Central Excise authorities, on more than one ground. The principal contention which Mr. Nanavaty who appears on behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter alia, do not contain narcotic drugs or other narcotics so far as allopathic medicines are concerned. Rule 8(1) of the Central Excise Rules, 1944, provides as follows : The Central Government may from time to time by notification in the Official Gazette, exempt subject to such conditions as may be specified in the notification any excisable goods from the whole or any part of duty leviable on such goods. The notification issued on 7th April, 1962 by the Central Government Rule 8(1) of the said Rules provides as follows: In exercise of the powers conferred by Rule 8 (1) of the Central Excise Rules, 1944, the Central Government hereby exempts anesthetics from the payment of excise duty leviable thereon. 3. The first leg of the argument raised by Mr. Nanavaty is that the Central Government itself has regarded anesthetics as falling under Item 14E and have, therefore, exempted them from the payment of excise duty leviable thereon under Item 14E in the First Schedule read with Sec. 3 of the Central Excises and Salt Act, 1944. The inference which Mr. Nanavaty, therefore, wants us to draw is that the first ten items which are anaesthetics do not contain narcotic drugs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the First Schedule to the Central Excises and Salt Act, 1944, the Central Government itself regarding the first ten medicinal preparations as not containing a narcotic drug or a narcotic. According to him, if they had contained a narcotic drug or a narcotic, they would not have fallen within the fold of Item 14E and the question of exempting them from payment of excise duty under Item 14E would not have arisen. The argument which Mr. Nanavaty has raised has indeed some substance. But what the Central Government thought of medicinal preparations 1 to 10 in the context of Item 14E in the First Schedule to the Central Excises and Salt Act, 1944, cannot finally conclude the question of applicability or otherwise of Item 1 (iii) in the Schedule to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. Even then, the argument raised by Mr. Nanavaty cannot be said to be irrelevant. While construing Entry 1 (iii) in the Schedule to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, we have got to bear in mind the behaviour of the Central Government in granting exemption to first ten medicinal preparations for payment of excise duty, under Item 14E of the Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bly Items 1 to 10 which the petitioner has been manufacturing are local anaesthetics. The remaining three are anti-inflamatory and anti-rheumatic medicines. What is the difference between a local anaesthetics and a general anaesthetic ? Encyclopaedia Britannica, Vol. I, 1972 Edition, at page 919, deals with anaesthesia. This is what has been stated in that behalf : General anesthesia involves loss of consciousness, usually for the purpose of relieving the pain of surgical operation local anaesthesia involves loss of sensation in one area of the body by block of conduction in nerves .. General anesthesia is manifested superficially by loss of consciousness but consists of depression of various central nervous system centres sub-serving sensation, muscle activity, respiration, circulation other autonomic and visceral functions and mental activity. At page 920A, this is what has been stated: A local anesthesia or conduction block has enjoyed a sustained popularity for relief of surgical pain of minor operations ... The local anaesthetics produce anaesthesia by preventing the depolarization of the nerve-fibre membrane, thus hindering the conduction of nerve impulses. Infiltration of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rug or narcotic given in Section 2 (h) of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. Merely because while describing the four stages of the effects the expression or has been used, it does not mean that if a drug produces one of the four effects, it answers the description of a narcotic drug or a narcotic given in the definition. In our opinion, a narcotic drugs or a narcotic should produce all the four effects one after another with the passage of time. The second fallacy is that sleepiness is not the direct effect of xylocaine. It is an after-effect. A unique after-effect, in our opinion, is one which characterizes a particular drug by producing that effect after all has been said and done. An after-effect is not a direct proximate ordinary or a normal effect. An after-effect in this context is, in our opinion a side effect which is produced after the utility of the drug for the purpose for which it has been administered is exhausted. Therefore, it is difficult to say that the first ten medicinal preparations which are known by the name of xylocaine (indeed in different forms) contain a narcotic drug or narcotic. 10. Mr. Patel has then in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... item 1 (iii) in the Schedule to the said Act. In that context, he has further argued that a narcotic drug or a narcotic which is a component part of a medicinal preparation, when administered singly, should be capable of producing drowsiness, sleepiness, stupefaction and insensibility. However, according to him, it does not mean that it need necessarily produce those effects when it forms a component, along with others, of a medicinal preparation. The distinction which Mr. Patel has tried to draw is indeed very ingenious. It is quite probable that a narcotic drug ore narcotic may produce, when administered singly, drowsiness, sleepiness, stupefaction or insensibility. It may not produce such symptoms when it acts on human body as a component of a particular medicinal preparation which has been manufactured out of several other things. 12. If we were required to examine the concept of a narcotic. drug or narcotic in the light of scientific data available in that behalf, we would have indeed given greater weight to the argument which Mr. Patel has advanced. In the instant case, we are not required to do so because we are required to examine the characteristics of a `narcotic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts which he has stated in that behalf are as follows. The Medicinal and Toilet Preparations (Excise Duties) Act, 1955, is a Central Act which is applicable to the whole of India. In States other than Gujarat, excise duties are not levied on local anaesthetics and such other medicinal preparations. Only in the State of Gujarat they are levied. The averments made to that effect in the petition have not been controverted by the respondents. According to Mr. Nanavaty, therefore, to collect from one excise duty on a particular medicinal preparation and not to collect it from another introduces undue discrimination between the two. The argument raised by Mr. Nanavaty is well-founded and must be upheld. It is not open to the central excise authorities to levy throughout the country on a particular medicinal preparation excise duty under the said Act and to collect it from some of its manufacturers and not to collect it from others. 15. In reply, Mr. Patel who appears on behalf of the State of Gujarat has argued that since the proceeds of the excise duties collected under the said Act to the State Exchequer, a comparison between what is done in two States cannot be made. The argument r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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