TMI Blog1994 (1) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... there is Item 3003.30 which reads as follows in the said Tariff Act :- 3003.30 Medicaments, including those used in Ayurvedic, Unani, Siddha, Homoeopathic or Bio-chemic systems 15% 6. There is further a Notification No. 32/89-C.E., dated 1-3-1989 which prescribes that the rate as against the said above sub-heading No. 3003.30 will be nil and not 15%. 7.Chapter note No. 2 of Chapter 30 runs as follows and the same is important for our purposes :- ****** 8.To complete the list of extracts the following two definitions from the Drugs Cosmetics Act, 1940 are also set out below :- "3. Definitions. - In this Act, unless there is anything repugnant in the subject or context - (a) Ayurvedic, Siddha or Unani Drug, includes all medicines intended for internal or external use for or in the diagnosis, treatment, mitigation or prevention of (disease or disorder in human beings or animals, and manufactured) exclusively in accordance with the formulae described in the authoritative books of (Ayurvedic, Siddha and Unani Tibb systems of medicine) specified in the First Schedule" (i) in relation to Ayurvedic, Siddha or Unani Tibb systems of medicine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cament and to be mere preservatives. 15.If on the other hand the law is that the exemption notification will be equally applicable to Ayurvedic medicines even if the same contain a non-Ayurvedic preservative or some such other negative allopathic ingredient then the Writ Court might well have to interfere because of the error apparent on the face of the order of the Asstt. Collector. 16.Before I go on to the authorities it is important to analyse the applicability of the above statutory provisions, in relation to Kafbin. 17.Kafbin is no doubt a proprietary medicament because the petitioner sells the same under their mark "Kafbin" and would be entitled to maintain an action for infringement or passing off depending on whether they are registered or not if competing traders sold goods of the same description under the same or a similar name or tried to pass off their goods as the goods of the petitioner. The petitioner must therefore come under the exclusion of "those medicaments" mentioned in Item 3003.10, so that they can claim total exemption. 18.From the definition of "medicament" given in Chapter note 2 quoted above, it is quite clear that these have to be products compr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents sought to distinguish this case by saying that sugar, in any event, is an Ayurvedic element and it is found in the Ayurvedic texts. Thus the whole case could have been decided on the simpler basis of the entire ingredients of SWAD being in accordance with recognized Ayurvedic components. He said that paragraph 35 above was, therefore, obiter. In my opinion, the case was not decided in the manner Mr. Roy Chowdhury submitted it could have been decided. The learned Judges did consider sugar as some item other than an Ayurvedic item although it might be that they need not have done so. It is quite clear that their Lordships' opinion was that the presence of an inactive ingredient even to the extent of 97% does not make an Ayurvedic medicine any the less an exclusive Ayurvedic medicine so long as the other elements are inactive and not included for medicinal purposes. 25.I have come to the same conclusion that the presence of such ingredients will not render an Ayurvedic medicine any the less Ayurvedic provided the ingredients have not been mixed or compounded for therapeutic or prophylactic use. The mixing for the purpose of preservation is not one such use. 26.Mr. Roy Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances of the case and in view of the findings made by the Tribunal and the points upon which it has remanded the matter to the Assistant Collector, we are of the opinion that the Tribunal has proceeded in the facts of this case on a correct basis and the order of the Tribunal does not call for any interference". 30.In my opinion, the issue in the Vicks case before the Tribunal was not whether all the ingredients have to be Ayurvedic ones irrespective of their therapeutic or prophylactic purpose. But the issue was whether the extraction of the said elements must be in accordance with the rigorous definition of another Act. In my opinion, the said case and the decision of the Supreme Court are only authority for the proposition that, the Ayurvedic elements need not necessarily have to be extracted according to Ayurvedic formulae to be Ayurvedic for the purposes of the Tariff Act. 31.Indeed stretching the argument of the respondents too far would lead to absurdities. A preservative is added to keep the medicine intact against the spoiling element of time or contamination with outside agents. Were one to push the argument of Mr. Roy Chowdhury far enough, one would come ultimately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two views are reasonably possible in the matter, but that Ayurvedic medicines cannot but be held to remain Ayurvedic even if there is mixed with it some non-medicinal non-prophylactic and non-therapeutic ingredient. I am compelled, therefore, to interfere in the interest of justice. 37.When arguing the case for the petitioner Mr. Gupta anticipated that the remedy by way of an alternative appeal and further departmental proceeding from the order of the Assistant Collector would be argued by the respondents. Thus he referred to me various cases showing that the presence of an alternative remedy is not an absolute bar but is a mere factor in guiding the discretion of the writ court on the basis of self-imposed limitations. 38.Mr. Gupta cited the case of Hirday Narain v. Income Tax Officer, Bareilly reported in AIR 1971 SC 33. He referred to me paragraph 12 of the said case. It was held there that if the writ is first entertained, and then dismissed, on the ground of existence of an alternative remedy a petitioner might be prejudiced for by that time the period for preferring an appeal might have elapsed. The time had elapsed in the case of Hirday Narain and time has elapsed here a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es have misdirected themselves in law on this point. Under these circumstances, no additional purpose is served by driving the petitioner to exhaust the departmental remedies because they have come to the Writ Court at the end, and therefore they might as well be allowed to come to it in the beginning and get over with it. 43.Under the circumstances, the writ petition succeeds. It is declared that the product of the petitioner Kafbin prepared in the manner stated in the petition with the named ingredients is a medicament which is exclusively Ayurvedic notwithstanding the presence of the preservatives being allopathic ingredients mentioned above. It is further declared that they are entitled to the absolute exemption of excise duty in regard to Kafbin under Notification No. 32/89 mentioned above. The order of the Assistant Collector mentioned above is quashed and there shall be a writ of certiorari absolute issued in that regard. The respondents shall hereafter permit the petitioner to clear their entire consignments of Kafbin from their factory without let or hindrance and without any imposition of any excise duty until of course the time, if ever, the exemption is withdrawn, or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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