Case Note & Summary
The petitioner, DWD Pharmaceuticals Ltd., challenged an order by Respondent No.5 which upheld earlier orders by Respondent No.4 and Respondent No.3, holding that articles containing less than 135 mg of Dextropropoxyphene are correctly taxable under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (M&TP Act). The petitioner manufactured a product named 'Lobain' and was paying Central Excise Duty to the Central Government, contending that the product was not a narcotic drug and did not fall under the definition of 'Narcotic Drug' under Section 2(h) of the M&TP Act. A show cause notice was issued on 26th June 1997 by the Inspector State Excise, and the petitioner replied denying liability. Subsequently, on 20th September 1997, the Superintendent of State Excise (Respondent No.4) issued another show cause notice. After a personal hearing on 27th October 1997, Respondent No.4 passed an order on 28th October 1997 rejecting the petitioner's contentions. The petitioner appealed to Respondent No.3, who dismissed the appeal on 1st July 1998. A further revision to Respondent No.5 was also dismissed. The petitioner then filed a writ petition in the Bombay High Court. The court considered the definition of 'narcotic drug' under Section 2(h) of the M&TP Act, which includes substances like Dextropropoxyphene. The court noted that the dosage of the narcotic drug is not relevant for classification; the presence of the drug in the preparation makes it taxable under the M&TP Act. The court dismissed the petition, upholding the impugned orders.
Headnote
A) Excise Law - Narcotic Drug Definition - Taxability of Medicinal Preparations - Section 2(h) of Medicinal and Toilet Preparations (Excise Duties) Act, 1955 - The issue was whether the product 'Lobain' containing Dextropropoxyphene in dosage less than 135 mg falls within the definition of 'narcotic drug' under Section 2(h) of the M&TP Act. The court held that Dextropropoxyphene is a narcotic drug and the dosage is irrelevant for classification under the Act. The product is correctly taxable under the M&TP Act. (Paras 1-9)
Issue of Consideration
Whether articles containing less than 135 mg of Dextropropoxyphene are correctly taxable under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955.
Final Decision
The petition is dismissed. The impugned orders are upheld.
Law Points
- Interpretation of 'narcotic drug' under Section 2(h) of Medicinal and Toilet Preparations (Excise Duties) Act
- 1955
- Dextropropoxyphene as narcotic drug irrespective of dosage
- Taxability of medicinal preparations containing narcotic drugs
Case Details
2017 LawText (BOM) (10) 81
WRIT PETITION NO. 1342 OF 1999
Smt. Vasanti A Naik, Riyaz I. Chagla
Mr. Abhinav Chandrachud with Mr. Aniket Mokashi i/b Haresh Mehta & Co. for the Petitioner
State of Maharashtra, Union of India, Commissioner of State Excise Maharashtra State, Superintendent of State Excise Maharashtra State, Mumbai, Additional Secretary to the Government of India, Central Board of Excise & Customs, Department of Revenue, Ministry of Finance, Government of India, New Delhi
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Nature of Litigation
Writ petition challenging orders holding that articles containing less than 135 mg Dextropropoxyphene are taxable under the M&TP Act.
Remedy Sought
Quashing of the impugned orders dated 28th October 1997, 1st July 1998, and the order of Respondent No.5.
Filing Reason
The petitioner contended that the product 'Lobain' containing Dextropropoxyphene in dosage less than 135 mg is not a narcotic drug and not taxable under the M&TP Act.
Previous Decisions
Respondent No.4 order dated 28th October 1997 rejected petitioner's contentions; Respondent No.3 dismissed appeal on 1st July 1998; Respondent No.5 upheld the orders.
Issues
Whether articles containing less than 135 mg of Dextropropoxyphene are correctly taxable under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955.
Submissions/Arguments
The petitioner argued that the product is not a narcotic drug and does not fall under Section 2(h) of the M&TP Act, and that the dosage is relevant for classification.
Ratio Decidendi
Dextropropoxyphene is a narcotic drug under Section 2(h) of the M&TP Act, and the dosage of the drug in a medicinal preparation is irrelevant for classification. Any preparation containing a narcotic drug is taxable under the M&TP Act.
Judgment Excerpts
The Petitioners have challenged an order passed by Respondent no.5 upholding the order of Respondent no.4 dated 28th October 1997 and order passed by Respondent no.3 dated 1st July 1998 respectively.
By the impugned order, Respondent no.5 has held articles contained less than 135 mg Dextropropoxyphene to be correctly taxable under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955.
Procedural History
Show cause notice issued on 26th June 1997; Petitioner replied; Second show cause notice on 20th September 1997; Personal hearing on 27th October 1997; Order by Respondent No.4 on 28th October 1997; Appeal dismissed by Respondent No.3 on 1st July 1998; Revision dismissed by Respondent No.5; Writ petition filed in Bombay High Court.
Acts & Sections
- Medicinal and Toilet Preparations (Excise Duties) Act, 1955: 2(h)
