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TMI Blog2017 (9) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... 'Narcotic Drug' or 'Narcotic' within the meaning of Section 2(h) of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 ("for short M & TP Act") and liable to State Excise Duty. The brief facts that arise in the present case are as under :- 2. The first Petitioner is a company manufacturing Pharmaceutical formulations viz. Ibruven Forte, Centrivon and Spasmovan (in short subject formulations) under Chapter 30 of the schedule to the Central Excise Tariff Act, 1985. The second Petitioner is the Chief Executive of the first Petitioner. The Petitioners are having a factory, inter alia, at Palghar, Dist. Thane. 3. By a notification dated 12th June 1986, the first Respondent inter alia, declared Dextropropoxyphene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce on 15th December, 1997. The Respondents addressed a communication dated 17th November 1998 and claimed that the Petitioners were manufacturing the subject formulations which were Narcotic substance without permission and had committed a criminal offence. The Petitioners were called for a personal hearing on 30th November 1998 but which could not be attended by the Petitioners due to the non-availability of the concerned person. The Petitioners informed Respondent No.4 on 12th December 1998 that the subject formulations contained only 65 mgs of Dextropropoxyphene and since the notification issued by the first Respondent provided for formulations having more than 135 mgs of Dextropropoxyphene to be classified as a narcotic substance, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited by the Petitioners by virtue of the said order. In so far as the duty already paid @ 15% / 16% to the Union of India under the Central Excise Act the Petitioners were to furnish particulars of the duty paid in the past under the Central Excise Act and the State Government was to find out the differential amount payable by the Petitioners, in the event it was held that the M & TP Act is applicable. This was to be intimated to the Petitioners and Petitioners were to deposit the said amount within four weeks of the receipt of the intimation by the State Government. By a further order dated 13th February 2006 passed in a Civil Application taken out by the Petitioner, order dated 2nd February 2005, by which the Petition was dismissed for de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel appearing for the Petitioners has submitted that the above issue is no more res integra. This issue has been answered by the Division Bench of this Court in USV Limited Vs. State of Maharashtra 2007 (3) Bom. C.R. 316 paragraph 13, of which reads thus:- 13. Plain reading of the Notification dated 12th June 1986 would disclose that any medicinal preparations containing Dextropropoxyphene base per dosage unit not more tha 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 Dextroropoxyphene-HCL which in terms contains Dextroropoxyphene base to the extent of 70 mg, which fact has not been disputed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Daruwalla has accordingly submitted that the very same issue having already been answered by the Division Bench of this Court in favour of the Petitioner the demand of duty payable under the M & TP Act in the present case is thoroughly untenable. It was held in the said judgment that the State Government shall reimburse the Central Government regarding the liability of the Petitioners for Central Central Excise duty during the period for which the Petitioners have paid duty @ 20%. Mr. Daruwalla has submitted that in the present case the Petitioners had stopped manufacturing of the subject formulations upon the interim order dated 4th May 1999 having been passed. However, the above judgment would squarely apply in the present case and the Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain less than 135 mgs i.e. 65 mgs of Dextropropoxyphene and hence cannot be classified as a Narcotic drug or Narcotic in view of the said Notification. 14. We accordingly hold and declare that the subject formulations of the Petitioners containing less than 135 mgs i.e. 65 mgs of Dextropropoxyphene are excluded from being classified as a Narcotic Drug under the Section 2(h) of the M & T P Act. We find that the view taken by the Respondents viz. that the Petitioners are liable to the State Excise Duty under the M & T P Act is thoroughly untenable and we quash the impugned demand notices. 15. We direct the Respondents to pay the Petitioners costs of Rs. 50,000/- for the loss caused to the Petitioners on account of the wrongful seizure of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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