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TMI Blog1987 (1) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... of Additional Duty upon products imported, it being contended that they were exempted from such duty under Notification issued vide Rule 8(1) of the Central Excise Rules, 1944 as amended from time to time. Pendse J. in Rakesh Enterprises and another v..Union of India and another [1986 (26) E.L.T. 906 (Bombay)] held that Additional Duty could not be levied upon Phenol USP inasmuch as the same was a drug or drug intermediate falling within the Notification dated March 1, 1975, at Item No. 19 of the schedule annexed to the Notification. This decision was followed by the learned Judge in Writ Petitions Nos. 1681 of 1982 and 2190 of 1982 - the latter pertaining to "Sorbitol". The judgement in Rakesh Enterprises (supra) was pronounced on 12.8.1986. Taking support from the above judgment and others pronounced at about the same time, the different petitioners now before are moved applications for refund of the Additional Duty paid. It was their contention that the duty had been paid under a mistake of law, the mistake being mutual, and, that the recipient, the Union of India, could not retain the same. These applications were rejected by the second respondent in all the cases, on the short ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have followed, the relevant provisions of the Drugs and Cosmetics Act of 1940 and the Rules framed thereunder. In particular, they would have had to comply with Rule 39 of the Drugs and Cosmetics Rules of 1945. This Rule requires an importer to make and sign a declaration that the imported drugs comply with the provisions of Chapter III or the Drugs and Cosmetics Act, 1940 and the Rules thereunder. The declaration had to be supplied to the Customs Collector. Admittedly, no such declaration was made or supplied. The articles imported were neither "drug" nor "drug intermediates" and having regard to what is stated above, the petitioners were stopped from contending the contrary. This apart, the refund applications were rightly rejected as being time barred. In relation to the import of Phenol and Diethylene Glycol, which figure in Writ Petitions Nos. 2436 of 1986 and 2497 of 1986, the additional defense raised is that these products were not "drugs" as was clear from the absence of the letter "P" at the end indicating their recognition by any Pharmacopoeia. 5. Having regard to the rival submissions, the points for determination are :- 1. Whether Sorbitol and Phenol USP were "drug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of Additional Duty upon "Sorbitol". Respondents' attempt to get out of the ratio of Rakesh Enterprises may be stated thus:- While importing Phenol USP and Sorbitol Solution, the Bills of Entry described the products as falling under heading 29.01/45. That heading deals with organic compounds. The import was so assessed and it is not now open to the petitioners to contend to the contrary. Had the products been "drugs or drug intermediates", the import would have had to be in conformity with the Drugs and Cosmetics Act and the Rules framed thereunder. From the Drugs and Cosmetics Act, reliance is placed upon the definition of "drug" given in Section 3(b) of the said Act and from the Rules, recourse is taken to Rule 39. Before setting out these provisions, let me quote that portion of Pendse, J.'s judgment, which incidentally, dealt with a somewhat similar contention. It reads thus :- "Shri Rege, learned council appearing on behalf of the department, strenuously urged that the advantage of exemption notification is not available unless it is established by the petitioner that the drug or the drug intermediate is actually so used. According to Shri Rege, it is not enough that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... destruction of vermin or insects which cause disease in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazettee." 8. Mr. Shah submits that unless petitioners establish that Phenol USP and Sorbitol Solution were meant for use as a drug as required by the aforementioned definition, they are not entitled to claim the benefit of the exemption notification. What is important to remember is that the definition of "drug" given in Section 3(b) is not exhaustive. This is made clear by the use of the word "includes" following the expression "drug" in Section 3(b). In Maxwell on the Interpretation of Statutes, Twelfth Edition, at page 270, there is the following passage which throws a light on how definitions are to be construed. The passage says :- "It is common for a statute to contain a provision that certain words and phrases shall, when used in the statute, bear particular meanings. Sometimes, it is provided that a word shall 'mean' what the definition section says it shall mean; in this case, the word is restricted to the scope indicated in the definition section. Sometimes, however, the word 'include' is use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, I record an affirmative answer to the first point. 10. The imported articles in Writ Petition. Nos. 2436 of 1986 and 2497 of 1986 are "Phenol" and "Diethylene Glycol". The submission is that these are not "drugs" and this is so because of the absence of the alphabets "USP", "BP", "IP", "USSRP", etc. etc. Unless a product be recognised by some recognised pharmacopoeia, it cannot be given the status of a 'drug'. Even if it be a 'drug intermediate', them exemption notification at the date of import of the articles in these two cases had been amended to exclude a "drug intermediate". The exemption notification was amended on June 30, 1983, and, the amended entry, reads thus :- "All bulk drugs and medicines not elsewhere specified." The reply given on behalf of the petitioners to this submission, is, that the presence or absence of the word "P" to any product, is irrelevant. Once it is established that it is a drug in the popular or natural sense, it will be a drug for the purposes of the exemption notification. Reliance is placed on the Bills of Entry and the assessments made, whereunder the articles figuring in the two writ petitions were classified as falling under Tariff It ..... X X X X Extracts X X X X X X X X Extracts X X X X
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