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2005 (1) TMI 122 - SC - Central ExciseWhether the State Legislature was competent to include medicinal and toilet preparations containing alcohol governed by the provisions of Medicinal Act, 1955 into the definition of the word "intoxicant" in section 2 (12a) of the Bihar Act, 1915, as amended by Act No. 6 of 1985? Held that:- Medicinal Act, 1955 levies duty on the manufacture of Ayurvedic medicines containing alcohol. However, when the Ayurvedic preparation is diverted to human consumption the State shall have the power to regulate and control such use which has been done in the present case by amending Act No. 6 of 1985, which is a law relatable to Entry 8 read with Entry 6 of List-II. On reading the provisions of the Drugs Act, 1940, as analyzed hereinabove, it is clear that as long as Ayurvedic or Unani drug is used as a drug for diagnosis/treatment/mitigation or prevention of diseases the activity falls within the ambit of the said Act. However, the Drugs Act, 1940 like Medicinal Act, 1955 does not deal with diversion of drugs to human consumption as alcoholic beverages which subject is dealt with by the Bihar Act, 1915, which regulates such use, possession and consumption by issuance of license on payment of fees. Hence, the State and the Board were competent to issue the impugned notifications. The question of quid pro quo is necessary when a fee is compensatory, for every fee quid pro quo is not necessary. In the case of regulatory fee it is not necessary to establish the factum of rendering of service. Therefore, there is no question of regulatory fee being invalidated on the ground that quid pro quo has not been established. Since we have held with reference to Entry 8 read with Entry 6 of List-II that the Bihar Legislature was competent to enact the said 1915 Act as amended, there is no merit in the contention advanced on behalf of the manufacturers that section 2(12a) of the Bihar Act, 1915 constituted colourable exercise of power. The appeals are allowed and the validity of the Bihar Excise Act, 1915 as well as the validity of the impugned notifications/communications, all dated 3-8-1988.
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