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DWD Pharmaceuticals Ltd. Versus State of Maharashtra & Others

2017 (11) TMI 733 - BOMBAY HIGH COURT

Classification of goods - product Lobain - Respondent has held that articles contained less than 135 mg Dextropropoxyphene to be correctly taxable under the Medicinal and Toilet Preparations - Held that: - the substances contained less than 135 mg of Dextropropoxyphene is not taxable under the M & TP Act. The impugned order has erroneously held that preparations containing Dextropropoxyphene in such minimal quantity although not being a narcotic drug or narcotic by itself, but does not cease to .....

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empted and not classified as narcotic drug or narcotic under the M & TP Act - In the present case admittedly the subject formulations contained less than 135 mgs, i.e. 65 mg of Dextropropoxyphene and hence cannot be classified as a narcotic drug or narcotic in view of the said notification. - This issue is squarely covered by the decision in the case of Macleods Pharmaceuticals Ltd, Govind Ruia Versus The Union of India, The Commissioner of Central Excise, The State of Maharashtra, The Comm .....

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s. ORAL JUDGMENT :- (Per Riyaz I. Chagla J.) 1. 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 (for short M & TP Act ). The brief background of th .....

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nd did not fall under the definition of Narcotic Drug as defined under Section 2- (h) of the M & TP Act. A show cause notice was issued on 26th June 1997 to the Petitioners by the Inspector State Excise N Division. The Petitioners were summoned to attend the office of the Inspector State Excise for hearing. The Petitioners replied to the show cause notice contending that the Petitioners were not liable to pay the duty under the M & TP Act. On 20th September 1997, the Superintendent of St .....

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al No. 261 of 1997 before the Commissioner of State Excise (Respondent No.3). By order dated 1st July 1998, the Commissioner of State Excise rejected the appeal and confirmed the demand of excise duty and called upon the Petitioners to pay excise duty within 30 days from the receipt of the order and apply for licence under the M & TP Act. The Petitioners challenged the decision of the Commissioner of State Excise by filing Writ Petition no. 1789 of 1998 in this Court. The Petition was dispos .....

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o.5 was vacated. Hence this petition. The Petition came up before this Court in June, 1999 when this Court passed an interim order dated 21st June, 1999 by which the Petitioners were directed to pay duty at the rate of 20% ad valorem to the State Government under M & TP Act and not the authorities under the Central Excise Act, 1944, provided they resumed manufacture. For past dues, the State Government was to find out the differential amount payable by the Petitioners under the M & T P A .....

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t Petition No. 2527 of 1999. 4. Mr. Abhinav Chandrachud, the learned counsel appearing for the Petitioners has submitted that the issue arising in present petition viz. whether formulations containing less than 135 mgs i.e. 65 mg of Dextropropoxyphene can be classified as Narcotic Drug or Narcotic within the meaning of Section 2 (h) of the M & TP Act and liable to State Excise duty is no longer res integra. The issue has been decided by this Court in two matters, in M/s. USV Limited Vs. Stat .....

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.e. 65 mgs of the Dextropropoxyphene are excluded from being classified as Narcotic Drug under Section 2 (h) of the M & TP Act. He has, therefore, contended that this petition should also be disposed off on the same terms. 5. We have carefully considered the submissions. We find that the issue arising in this Petition has been dealt with and has answered in favour of the Petitioners in M/s. USV Ltd. (Supra) and followed in Macleods Pharmaceuticals Ltd. (Supra). We are of the view that the im .....

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pugned order viz. M/s. Baidynath Ayurved Bhavan P. Ltd. Vs. Excise Commissioner, U.P.AIR 1971 SC 378. has been dealt with in M/s. USV Ltd. (Supra). In the said decision, the Division Bench of this Court in paragraphs 13 and 15, held thus:- Plain reading of the Notification dated 12th June 1986 would disclose that any medicinal preparations containing Dextropropoxyphene base per dosage unit not more than 135 mg are excluded from being classified as narcotic drug or narcotic within the meaning of .....

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sion of the Apex Court in M/s. Baidyanath Ayurved Bhawan Pvt. Ltd. , Jhansi Vs. The Excise Commissioner, U.P. and others, reported in (AIR 1971 SC 378) was on totally different issue where the quantity of Dextropropoxyphene or any similar such product was not in issue. The issue in that case was, whether the medicinal preparations contain alcohol or not. The quantity of alcohol was not subject matter to adjudicate. In the matter in hand, the quantity of Dextropropoxyphene is most relevant factor .....

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otic drug. The relevant entry 87 in the said Notification reads thus:- (87) (+) - 4- dimethylamino - 1, 2-diaphenyl - 3- methyl - 2 - butanol propionate, (the international non-proprietory name of which is Dextropropoxyphene), and its sales preparations, admixtures, extracts and other substances containing any of these drugs, except preparations for oral use containing not more than 135 milligrams of Dextropropoxyphene base per dosage unit or with a concentration of not more than 2.5 per cent in .....

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