TMI Blog1996 (12) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... The Plant and Machinery of the appellants was confiscated and allowed to be redeemed on paymet of fine of Rs. 1,00,000/-. The Collector had also imposed a personal penalty of Rs. 10 lakhs on the appellants. 2. The facts of the case in brief are that the appellants are engaged in the manufacture of various pharmaceutical products. A search was conducted in their factory premises at Pune and in their office premises at Bombay. On scrutiny of the documents revealed that they were manufacturing Zoacide Infusion, Anarobin, Miraphyl and Metronidazole Injection USP, 5% Dextrose Injection IP, 10% Dextrose Injection IP, 0.9% Sodium Chloride Injection IP, Compound Sodium Lactate Injection IP, 20% Manitol Injection USP, Unimazol I.V. and also various branded products for M/s. Tata Pharma, Bombay; that in their classification list the appellants claimed classification of their products under Heading 3003.10 and they also claimed and availed concessional rate of duty at a rate of 10% under Notification 29/88, dated 1-3-1988 declaring these products to be single ingredients formulations based on bulk drugs specified in the Second Schedule to the Drugs (Price Control) Order, 1987. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , (b) whether pharmaceutical products manufactured by the appellants should be classified as patent or proprietary Medicaments, (c) whether the demand is hit by limitation and (d) whether penalty should imposed on the appellants. 6. On the question of concessional rate of duty under Notification 29/88, dated 1-3-1988 we find that this Notification stipulated that single ingredient formulations based on the list of bulk drug (including salts, esters and derivatives, if any) specified in the 2nd Schedule to the Drugs (Price Control) Order, 1987 as amended from time to time shall be exempt from duty in excess of 10% ad valorem. Explanation (b) to the said Notification stipulated (b) the expression `single ingredient formulations means medicaments processed out of any single bulk drug or drug, with or without the use of any pharmaceutical aids (such as diluent, disintegrating agent, moistening agent, lubricant, buffering agent, stabiliser or preserver) which are therapeutically inert and do not interfere with the therapeutic or prophylactic activity of the drug, for internal or external use for, or in the diagnosis, treatment, mitigation or prevention of a disease in human beings o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m chloride is used to make the solution isotonic. It was certified that sodium chloride does not have any therapeutic effect. The learned Counsel cited and relied upon the decision of the Apex Court in the case of Astra Pharmaceuticals (P) Ltd. reported in 1995 (75) E.L.T. 214 holding that a monograph which only identifies the manufacturer would not make the medicine patent and proprietary. Relying on the judgment of the Tribunal in the case of Collector of Central Excise v. Bengal Chemicals and Pharmaceuticals Works reported in 1989 (43) E.L.T. 591, the learned Counsel submitted that the Hon ble Tribunal held that :- Even applying the alternative criterion, we do not think the legend Bengal Chemicals" is sufficient to attract the mischief of the second criterion referred to above especially considering that the names of the medicines are specified in pharmacopoeia. The legend only shows that the medicines are manufactured by the respondents. It does not constitute a brand name or mark used in relation to the medicines for indicating or to indicate a connection between the medicines and the respondents. In this context, the observations of the Madras High Court in its judgement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isputed that India French" occur in respect of all the articles manufactured by it. It is seen that even in the letter-head, the petitioner has been using this mark. Therefore, it is not a distinctive mark given by the petitioner to the three medicines referred to above but it is a mark which is generally given to all labels. In its letter dated 11-12-1967, the petitioner has categorically stated that this mark is being used in respect of all the articles manufactured by it." The learned Counsel also cited and relied on the judgment of the Apex Court in the case Aphali Pharmaceuticals Ltd. reported in 1989 (44) E.L.T. 613 (S.C.) the Supreme Court held that :- From the Explanation I of the Schedule of the Act as substituted by Act 5 of 1964 also it is clear that patent or proprietary medicine means any medicinal preparation which is not specified in a monograph in a pharmacopoeia, formulary or other publications notified in this behalf by the Central Government in the Official Gazette. To be a patent medicine one would be required to have a patent. A patented article means an article in respect of which a patent is in force. Patent" means a patent granted under the Indian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide is not used as therapeutically active ingredient but is used as a vehicle which is not active in that particular injection. He, therefore, submitted that the impugned order may be set aside and the appeal may be allowed. 6. Shri A.K. Madan, learned SDR submitted that the label of the medicine reveals that it contains Metronidazole U.S.P. in an isotonic solution; that isotonic solution maintains the osmotic pressure of the body which is a therapeutic activity; Sodium Chloride is a pharmaceutical aid; that it is not therapeutically inert; that Joint Commissioner of F.D.A., Pune has opined that Sodium Chloride given intravenously, acts as an isotonic vehicle. 7. We have heard the submissions of both sides. We find that the composition/active ingredients of Zoacide Infusfion are :- 1. Metronidazole USP - 05% w/v 2. Citric Acid - 00229% w/v 3. Disodium Hydrogen - 0.085% w/v 4. Phosphate I.P. 5. Sodium Chloride I.P. - 0.72% 6. Water for Injection I.P. - q.s. 8. We have considered the submissions and arguments of both sides. We find that Sodium Chloride can be used by itself as well as in combination with other ingredients. Especially in the case of Metroni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sually a device in the form of an emblem, word or both. For each product a separate mark known as a product mark or a brand name is used which is invariably a word or a combination of words and letter or numeral by which the product is identified and asked for. In respect of all products both the product mark and house mark will appear side by side on all the labels, cartons etc. Goods are ordered only by the product mark or brand name. The house mark serves as an emblem of the manufacturer projecting the image of the manufacturer generally." The `AP or `Astra on the container or packing was used to project the image of manufacturer generally. It did not establish any relationship between the mark and medicine. For instance, if the appellant instead of using Dextrose injections would have described it as Astra Injection or Astra Dextrose injections then it could be said that a relationship between the monograph and the medicine was established. In the case of appellant it was only a monograph to identify the manufacturer." In M/s Indo French Pharmaceutical Co. Madras v. Union of India and others - 1978 (2) E.L.T. (J 478) a learned Single Judge of the Madras High Court while c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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