9911796707
TMI Blog1978 (3) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... Ol.Anethi ... 0.004 ml. Alcohol ... 4 % v/v. " The formula of `Bromo Raulfin' is : "Total extract 0.3 ml. Rauwolfia resin .. 1.00 mg. Alkaloids .. 1.65 mg. Additives Mist. Pot Brom. et. Valeriana … 0.3 ml. Ext. Trifala Liq. … 0.3 ml." 3.The appellant contends that for the manufacture of these medicinal preparations it has to consume heavy quantities of alcohol in the form of rectified spirit which is used in different stages. In the primary stage the crushed medicinal herbs and other drugs are put in liquid alcohol to extract active principles present in these herbs. By this process the appellant gets Tincture Zingiberis Fort, Tincture Belladona and Tincture Nux Vomica which are for preparation of 'Bismozyme' By the same process extract of Rauwolfia, it is stated before us, is also obtained for manufacture of `Bromo Raulfin'. We are also told that the appellant uses spirit chloroform for its medicinal preparations which is similarly produced. According to the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal sum of Rs. 16,150.80 up to the 28th March, 1969. The appellant has asked for refund of this sum as well. 9.In this appeal, therefore, we have to consider two points, namely, (1) whether Tincture Zingiberis Fort, Tincture Belladona, Tincture Nux Vomica, Spirit Chloroform and Extract Rauwolfia Serpentina, which are used by the appellant in the preparation of appellants' drugs and other proprietary medicines can be said to be `medicinal preparations' within the meaning of Section 2 (g) of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 and (2) whether duty was payable on what the appellant described as `physicians' samples'. 10.Mr. Sanjay Bhattacharjee appearing for the appellant has drawn our attention principally to Sections 2 (g) and 3 of the Act. We have already noted the provisions of Section 2 (g) of the Act, Section 3 is in the Chapter on "Levy and collection of duties". It provides as follows :- There shall be levied duties"3 (1) of excise, at the rates specified in the Schedule, on all dutiable goods manufactured in India. The duties aforesaid shall be leviable - (a) where the dutiable goods are manufactured in bond, in the State in which such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ug in Pharmacopoeia of India at page 695. 13.Let us take Tincture Nux Vomica. In the British Pharmaceutical Codex, 1949, it is stated at pages 555 - 556 that Tincture Nux Vomica internally acts as a bitter, reflexly increasing the gastric secretion and the appetite. There are similar observations in the other authorities we have referred to. Tincture Nux Vomica is also included in the Pharmacopoeia of India at page 690. 14.The third one is Spirit Chloroform. This is used both externally and internally. In Ghosh's book at page 148 we find that internally in diluted solution it has a warm sweetish taste and acts as a pleasant carminative and stomachic. There are similar observations in the other authorities. Spirit chloroform has been discussed in Pharmacopoeia of India at page 581. 15.The fourth one is Tincture Belladona. In Ghosh's book at page 246 it is, inter alia, stated that 10 ms. of the tincture every four hours to young children may be prescribed for whooping cough and 30 to 40 ms. of the tincture every one or two hours during an attack of renal colic. British Pharmaceutical Codex, 1949 says at page 136 that it acts as a powerful antispasmodic in intestinal colic and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-31 it has been held that Section 4 of the Act provides that the real value should be found after deducting the selling cost and selling profit and that the real value can include only the manufacturing cost and the manufacturing profit. 20.Mr. Bhattacharjee says that since a `physicians' sample' is not sold at all there cannot be any question of manufacturing cost or manufacturing profit. 21.In Atic Industries Ltd. v. H.H. Dave [1978 (2) E.L.T. (J444) = AIR 1975 S.C. 960]; (1975 Tax LR 1515) the Supreme Court has observed that in the usual course of business the wholesale cash price which a manufacturer charges to the wholesale dealer less trade discount represents this value of the goods for the purpose of assessment of excise. The value of the goods for the purpose of excise must take into account, says the Supreme Court, only the manufacturing cost and the manufacturing profit and it must not be loaded with post-manufacturing profit arising from post-manufacturing operation. 22.Here again learned Counsel makes the same comment; a `physicians' sample' has no wholesale cash price and unless there is a sale the price or value cannot be determined. 23.The principles laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Toilet Preparations (Excise Duties) Act, 1955, there appears to be no provision at all which enables the State Excise Authorities to exempt `Physicians' samples' from excise duties. On the contrary, in the Central Excise Tariff, Item 14-E sub-clause (6) there is some provision. Item 14-E applies to "Patent or proprietary medicines not containing alcohol, opium, Indian hemp or other narcotic drugs or other narcotics other than those medicines which are exclusively Ayurvedic, Unani, Sidha or Homoeopathic". Under sub-clause (6) of Item 14-E exemption is granted to "clinical samples issued by any manufacturer, and limited to a quantity not exceeding five per cent by value of the total duty paid clearances during the preceding month of all types of patent or proprietary medicines and intended for free supply to Hospitals, Nursing Homes or Medical Practitioners or for test in a Laboratory or for purposes of quality control in the premises of the factory of manufacture or in any other premises approved by Collector or for use by the Central Excise or Drug Control Authorities, and packed in a form distinctly different from regular trade packing and each smallest packing being clearly an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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