SUHRID GIEGY LTD AHMEDABAD Vs. UNION OF INDIA AND ORS

JUDGEMENT

(1.) The petitioner is a company which is engaged in the business of manufacturing pharmaceuticals and medicinal preparations. It has been, inter alia manufacturing oral drugs, injections and tablets. the respondent served, upon the petitioner two notices calling upon them to pay excise duty on the manufacture of thirteen medicinal preparations. The demands were made under Rule 9 of the Medicinal and Toilet Preparation (Excise duty) Rules 1956. 13 medicinal preparations have been listed at page 3 of the petition. They are as follows :

(2.) The petitioner challenges in this petition the validity of the impugned demands made by the Central Excise authorities, on more than one ground. The principal contention which Mr. Nanavaty who appears on behalf of the petitioner has raised is that by virtue of a notification issued by the Central Government, items 1 to 100 have been exempted from payment of excise duty under Item 14E in the first Schedule to the Central Excises and Salt Act, 1944. He has further argued that within the meaning of Sc. 3 read with Item I (iii) in the Schedule to the medicinal and Toilet Preparation (Excise Duties) Act, 1955, there 13 medicinal preparations are not liable to be taxed. In Support of his argument, he has indeed invited our attention to Seventh Schedule to the Constitution-in particular to Entry 51 in the State List and Entry 54 in the Union List. Reference to these two entries in the Seventh Schedule to the Constitution was purely elucidatory. Nothing turns upon them. Item 14E in the First Schedule to the Central Excise and Salt Act, 1944 provides as follows :

(3.) The first leg of the argument raised by Mr. Nanavaty is that the Central Government itself has regarded anasesthetics as falling under Item 14E and have, therefore, exempted them from the payment of excise duty leviable thereon under Item 14E in the First Schedule read with Section 3 of the Central Excises and Salt Act, 1944. The inference which Mr. Nanavaty, therefore, wants us to draw is that the first ten items which are anasesthetics do not contain 'narcotic drugs' or 'other narcotics'. According to him, if they were otherwise not covered by Entry 14E, the Central Government could not have granted an exemption to them. The petitioner in its petition has stated that Item 1 to 10 are broad-spectrum anti-inflammatory and anti-rheumatic range of medicines containing a very small percentage of xylocaine as a local anesthetic to avoid any pain arising out of the administration of drug. These averments made on behalf of the petitioner have not been controverted therefore, undisputed fact that whereas item 1 to 10 are local anesthetics, item 11 to 13 are anti-inflammatory and anti- rheumatic range of medicines. It has further been stated by the petitioner that the medicinal preparations listed at serial Nos. 1 to 10 are used for benumbing a local area of human body on which a surgical operation is going to be performed. In view of the exemption notification to which we have referred, there is no doubt about the fact that medicinal preparations at serial Nos. 1 to 10 are exempt from payment of excise duty under Item 14E of the First Schedule to the Central Excises and Salt Act, 1944.