THE MEDICINAL & TOILET PREPARATIONS (EXCISE DUTIES) ACT, 1955 WITH THE ME DICINAL AND TOILET PREPARATIONS ( EXCISE DUTIES) RULES , 1956 Published By Law Publishers (India) Pvt. Ltd.
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18-A. SP . Marg . Post Box No . 1077. Allahabod -211001 PH : 2623735 . 2623741 . FAX : 0532 M 2622276 e-mail virandro soncharnet.in website : www. awpublishersindracom THE M Introdu Section
1. Short ti
2. Deflniti
3. Duties r
4. Rebate of dutia
5. Recovej
6. Certain
7. Offence
8. Power c
9. Powc
10. Powe docu
11. Offici
12. Owni Conti
13. Puni:
14. Sear(
15. Disp(
16. Inqui arres
17. Vexai
18. Failu
19. Powe
20. Bar c pros(
21. Repe SCHEE THE MEDICINAL AND TOILET PREPARATIONS (EXCISE DUTIES) ACT, 1955 CONTENTS Page Introduction ... Xi Preliminary ,-runt of low, in tracing )US ornnndrnentt t' wir rocurernnnt of ora,s kris Putes. f ,q," txxn owing . rnc.ty Have ciept ken care or in the ns:xt •xr IS sold with the clear for any damage or loss iMect of ncmect and for of 'h ^5 wotk nor f'r nn/ or rw, rr1s (grant. nk,, rruxuc ;n retrieval irtemS) or Je dr. ,ce. etc *lthou' 'le pub+lsners . Beach n' s hmltod to repth(:ement yen of puUlcaton All Section
1. Short title, extent and commencement ,,, 2
2. Definitions .. 3 Levy and Collection of Duties
3. Duties of excise to be levied and collected on certain goods ... 5
4. Rebate of duty on alcohol. etc. supp!ied for manufacture of dutiable goods ... 6
5. Recovery of sums due to Government ... 7
6. Certain operations to be subject to licences ... 7
7. Offences and penalties ... 7
8. Power of Courts to order forfeiture ... 8
9.
Powers and Duties of Officers and Landholders Power to arrest 8
10. Power to summon persons to give evidence a.id produce documents in inquiries under this Act ... 9
11. Officers required to assist excise officers ... 9
12. Owners of occupiers of land to report manufacture of contraband dutiable goods ... 9
13. Punishment for connivance at offences ... 9
14. Searches and arrests how to be made ... 9
15. Disposal of persons arrested ... 10
16. Inquiry how to be made by excise officers against arrested persons forwarded to them ... 10
17. Vexatious search, seizure , etc. by Excise Officer ... 11
18. Failure of excise officers on duty ... I I
19.
Supplementary Provisions Power to make rules 11
20. Bar of suit and limitation of suits and other legal proceedings . . . 14
21. Repeals and savings ... 14
SCHEDULE ... 15
(i) THE MEDICINAL AND TOILET PREPARATIONS (EXCISE DUTIES) RULES, 1956 CI IAPTER I Preliminary ... Page Rule ... 1 7
1. Short title 17
2. Definitions Agent or owner of goods. manufactory or wairehouse to3 19.
he deemed owner for certain purposes CHAPTFR 11 Appointment of Officers
4. Appointment of officers and delegation of powers 9 theInto
5. Excise commissioner may exercise the powers of any 20 officer
CHAPTER III Levy and refund of, and exemption from duty 20
6. Recovery of duty
7. Exemption from duty on medicinal preparation for titutions 20 Government and charitable ins asesl ... 20c8. Power to exempt from duty in specia td ... 21 u y9. Time and manner of payment of 22
10. Alternation of duty 1 1 Recovery of duties or charges short-levied or erroneouslv 22 refunded
12. Residuary powers for recovery of sums due to 22 Government aid, unless
13. No refund of duties or charges erroneously paid, claimed within six months 23
14. Rebate of duty on goods exported
15. Export under bond of goods on which duty has not 23 been paid ... 23
16. General bond by an exporter
17. Penalty for failure to furnish proof of export within the 23 prescribed period
18.
CHAPTER 1V Manufacture Supply of rectified spirit for manufacture of medicinal 24 and toilet preparations it 24
19. Wastage in transit of rectified spir 24
20. Mode of manufacture CONTENTS n RATION S 6 Rule SECTION A Page Manufacture in bond of medicinal and toilet preparations containing alcohol, opium , Indian hemp and other narcotic drugs and narcotics
21. Issue of rectified spirit without payment of duty 24
22. Entry into and exist from a bonded manufactory 24 . .. Page 23. Essentials of a bonded manufactory ... 24 . .. 17 24. No additions or alterations to be made without orders ... 25 1 7 25. Arrangement of receptacles in a bonded manufactory ... 25 use 11) 26. Indent for rectified spirit 2597 11--in ti fca ono rectified spirit received ... 26
28. Storage of rectified spirit ... 26
29. Issue of rectified spirit from the spirit store 26
30. Indent for opium, Indian hemp and other narcotic drugs 19 and narcotics, their storage and issue for manufacture ... 27 if any
31. Manufactured dutiable goods ... 27 ... 20 32. Manufacturing vessels to bear labels ... 27
33. Sample to be taken 27
34. Storage of finished products ... 28 uty 35. Deficiency noticed in the finished store 29 20 36 The osal f b t dp o su -s an and preparations ... 29 for 37. Disposal of recovered alcohol 29 20 38. Wastage in manufacture ...
3020 39. Remission of duty in case of loss due to accident ...
3021 40. Issue from a bonded manufactory ...
31... 22 41. The licensee to maintain proper accounts. etc.
...
31 roncous- 42. Size of establishment ...
... 31 ... 22 43. Accounts ... 31
44. Collection of duty ... 31 ... 22 45. Scope of duties ... 31 i, unless SECTION B... 23 ... 23 Manufacture outside bond of medicinal and toilet preparations containing not alcohol, opium , Indian hemp and other narcotic drugs and narcotics ... 23 46. Opening and closing hours ... 32 ... 23 47. Building arrangements ... 32 .thin the 48. Receptacles ... 33 23 49. Indent for rectified spirit-duty paid ... 33
50. Indent for opium, Indian hemp and other narcotic drugs and narcotics, their storage and issue for manufacture . .. 34 iedicinai 51. Restrictions on manufacture 34 24 52. Manufacture, storage and sale to be carried on only in ... 24 the licensed premises of the non-bonded manufactory . .. 35 ... 24 iv MEDICINAL AND TOILET PREPARATIONS (EXCISE DUTIES) ACT, 1955 Page Rule b t ken b the Excise Officer at least53. Samples to e a y 35 once a month for analysis "'
54. Procedure to be followed in taking samples ... 36
55. No compensation to manufacturer of samples taken for 36 analysis ...
56. Correct and up-to-date accounts in prescribed printed 36 registers to be maintained . .
57. Employees ... 37
58. Inspection ... 37 SECTION C Classification of Medicinal and Toilet Preparations Containing Alcohol ... 37
59. Allopathic preparations Restricted and unrestricted medicinal preparations
60. Maintenance of restricted list of preparations . 38 Homoeopathic Preparations
61. Mode of manufacture ... 38 ..... ... 3862 .
Preparation with narcotic ingredients
63. Preparations containing opium, Indian hemp and other narcotic drugs and narcotics ... 39 Ayurvedic Preparations
64. Types of preparations ... 39
65. Pharmacopoeia for Ayurvedic preparations . . . 39
66. Classification of preparations containing self-generated 39 alcohol for purposes of levy of duty . .
67. Levy of duty on Ayurvedic preparations made by distillation or to which alcohol is added at any stage of manufacture "' 3939 67-A.
Standing Committee
68. Standing Committee and its functions ... 40
69.
CHAPTER V Warehousing Establishment of bonded warehouses ... 40 0
70. Licensing of warehouses ... 4 71 Licensee to enter into a bond ... 41 .
72 Receipt of goods at warehouse ... 41 ivi.
.
73. Owner's power to deal with warehoused goods ... 41 102
74. Goods not to be taken out of warehouse except as 41"' 103 provided by these rules CON t'ENTS vii 'age R i l le Page
CHAPTER XI Miscellaneous
130. Excise Commissioner may require a fresh declaration ... 58 52
131. Stocks of dutiable goods to he stored in an orderly manner ... 58
132. Account of stock of goods in a manufactory or warehouse to be taken and balance to be struck ... 59 52 133. Restriction of removal of goods ... 59 53 134. Licensee's liability for removal of goods by any person ... 59
135. How registers and stock accounts to be maintained 5f?
53 136. Provision and maintenance of weighing and measuring 53 apparatus ... 6( 54 137. Provision and maintenance of locks ... 60 137-A. Duplicate of documents may be granted on payment of fees ... 61
138. Goods, plant and machinery chargeable with duty not paid ... 61 54 139. Dutiable goods not to be sold except in prescribed containers bearing a label ... 61 54 140. Officer not to disclose information learned in his official 55 capacity ... 61 55
141. Provisions of lodgings for the excise staff posted to the bonded manufactory or warehouse ... 61 55 142. Power to issue supplementary instructions ... 62 55
143. Cancellation of former rules, orders and notifications 62 55
SCHEDULE 62 56 FORMS FORM A.L..-I w 56 Application for licence to manufacture goods liable to duty of excise under the Medicinal and Toilet Preparations 56 (Excise Duties) Act. 1955 . .. 84 56 FORM A.L.-2 57 Application for licence to manufacture Ayurvedic praparations by an ayurvedic practitioner 87 FORM A. 1-3 Application for licence for a bonded warehouse for the storage of excisable goods liable to duty under the Medicinal and Toilet Preparations (Excise Duties) Act. 1955 8 57 FORM L-1 57 Licence to manufacture medicinal and toilet preparations containing 57 alcohol. opium . Indian hemp and other narcotic drugs and nar- 57 codes tinder bond for payment of duty . .. 89 57 FORM L-2 Licence to manufacture medicinal and toilet preparations 58 containing alcohol. opium. Indian hemp and other narcotic drug and narcotics outside bond . .. 90 58 Vi MEDICINAL AND TOILET PREPARATIONS (EXCISE DUTIES) ACT,1955 Rule Page
CHAPTER VIII Inter-State Movement of Medicinal and Toilet Preparations containing Alcohol, Opium , Indian Hemp and other Narcotic Drugs and Narcotics
104. Mode of Inter-State movement ... 52 Movement from one Bonded Warehouse to another Bonded Warehouse
105. Bond for due arrival and re-warehousing .. . 52
106. Remover may enter into a general bond . .. 53
107. Procedure in respect of goods removed from one warehouseto another . .. 53
108. Failure to present triplicate application . .. 53
109. Procedure on failure to pay duty . .. 54
CHAPTER IX Entry, Search , Seizure and Investigation
110. Authorized officers to have free access to premises.
equipment, stocks and accounts of dealers in dutiable goods ' 4
111. Penalty for obstruction or for giving false or misleading information "' 54
112. Power to detain person and examine goods ... 55
113. Power to stop, enter and search ... 55
114. Seizure ... 55
115. Power to require access to place, vessel or conveyance 55for inspection or examination of goods ...
116. Police to take charge of articles seized ... 55
117. Summons and notices: Manner of service . . . 56
118. Service of notice: Notice not void for error ... 56
119. Disposal of things seized ... 56
120. Prosecution ... 56
121. Arrests ... 56
122. Provisions of arrests and seizures to be in conformity with the Act ." 57
CHAPTER X Penalties, Confiscation and Appeals
123. Power of adjudication of confiscation and penalty ... 57
124. General penalty ... 57
125. Composition of offences ... 57
126. Confiscation ... 57
127. Appeals ... 57
128. Revision petitions d ... 58
129. Appeal and application for revision to be accompanie 58by copy of decision or order appealed against . .
INTRODUCTION Medicinal and toilet preparations containing alcohol. etc. were subjected to State excise duties. Each State Government fixed its own rates of duty and followed its own procedure to regulate the imports from and exports to other States of such preparations. Thus therefore the industry manufacturing these preparations had to contend with several handicaps imposed by such diversities in rates and procedure. In order to secure uniformity the entry relating to excise duty on medicinal and toilet preparations containing alcohol, etc. was transferred under the Constitution from the State list to the Union list.
In such an eventuality the Medicinal and Toilet Preparations (Excise Duties) Act was enacted in 1955 to provide for the levy and collection of duties of excise on medicinal and toilet preparations containing alcohol, narcotic drug or narcotics. This Act extends to the whole of India and was enforced with eftect from 1st April, 1957. This is a very short Act containing only 21 sections. Sections 1 and 2 are preliminary. Sections 3 to 8 deal with levy and collection of duties whereas Sees. 9 to 18 relate to powers and duties of officers and land holders. Sections 18 to 21 are supplementary provisions.
Section 19 of the Act empowers the Central Government to make rules to carry out the purposes of the Act. The Central Government in exercise of the powers conferred by Sec. 19 of the Act framed the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956. 't'hese rules are divided in XI Chapters. Chapter I consisting of rules 1 to 3 are preliminary. Rules 4 and 5 in Chapter II deal with appointment of officers. Chapter III consisting of rules 6 to 17 relates to levy and refund of, and exemption from duty and rules 18 to 68 in Chapter IV deal with manufacture of medicinal and toilet preparations containing alcohol, opium, Indian hemp and other narcotic drugs and narcotics. Chapter V consisting of rules 69 to 81 relates to warehousing and its establishment. Chapter VI is a procedural chapter for obtaining licence covered under rules 82 to 96. Chapter VII consisting of rules 97 to 103 deals with export under claim for rebate of duty or under bond. Inter-State movement of medicinal and toilet preparations have been discussed in Chapter VIII under rule 104 to 109. Chapter IX consisting of rule 110 to 122 deals with entry, search, seizure and investigation. Rules 123 to 129 in Chapter X provides for penalties, confiscation and appeals.
Rules 130 to 143 covered under Chapter XI are miscellaneous matters.
LIST OF AMENDING ACTS
1. The Repealing and Amending Act, 1960 (58 of 1960).
2. The Medicinal and Toilet Preparations (Excise Duties) Amendment Act, 1961 (19 of 1961).
3. The Finance (No. 2) Act, 1962 (20 of 1962).
4. The Finance Act. 1964 (5 of 1964).
(xi ) viii MEDICINAL AND TOILET PREPARATIONS (EXCISE DUTIES) ACT, 1955 Page Rule FORM L-3 Licence for Ayurvedic or Unani practitioner to manufacture Ayurvedic or Unani preparations containing self generated alcohol for dis 91 pensing and not for trade purposes FORM L-4 "' 92 Licence for a bonded warehouse FORM B-1 Bond to be entered into by the licensee of a bonded manufactory. 93 FORM B-2 (SUR.)
Bond (with Surety) to be entered into by the licensee of a 94 private bonded warehouse FORM B-2 (SEC.)
Bond (with Security) to be entered Into by the licensee of a private 95 bonded warehouse FORM B-3 (SUR) Bond (with Surety) for the due despatch of dutiable goods removed 96 for export to a foreign country without payment of duty ...
FORM B-3 (SEC.)
Bond (with Security) for the due despatch of dutiable goods removed 97 for export to a foreign country without payment of duty . .
FORM B-3 (GEN. SUR.)
General Bond (with Surety) for the due despatch of dutiable goods removed from time to time for export to a foreign country 9 without payment of duty FORM B-3 (GEN. SEC.)
General Bond (with Security) for due despatch of dutiable goods removed from time to time for export to a foreign country 00 without payment of duty FORM B-4 (SEC.)
Bond (with Surety) for the due arrival and rewarehousing of dutiable goods removed from one bonded warehouse to another ...
01 FORM B-4 (SEC.)
Bond (with Security) for the due arrival and rewarehousing of dutiable goods removed from one bonded warehouse to another ...
102 FORM 13-4 (GEN. SEC.)
General bond (with surety/ies) for the arrival and rewarehousing of othert 103o an dutiable goods removed from one bonded warehouse FORM B-4 (GEN. SEC.)
General Bond (with Security) for the due arrival and rewarehousing of dutiable goods removed from one bonded warehousing to 104 another FORM R. G.-1 Register of vessels or receptacles Bonded/Non-bonded Manufactory 1OE FORM R. G.-2 Register of transaction in the spirit store of bonded/non-bonded 10" manufactory FORM R. G.-3 108 Register of operations in the bonded/non-bonded manufactory ...
FORM R. G.-4 Register of preparations in the bonded/non-bonded 109 manufactory of Shri Sarvashri THE MEDICINAL AND TOILET PREPARATIONS (EXCISE DUTIES) ACT, 1955 (Act No. 16 of 1955)1 127th April, 19551An Act to provide for the levy and collections of duties c f c:rci e on medicinal and toilet preparations containin alcohol, opium, Indian hemp or other narcotic drug or narcotic STATEMENT OF OBJECTS AND REASONS OF ACT; 16 OF 1955 By virtue of entry 40 in List If in the Seventh Schedule to the Government. of India Act, 1935, medicinal and toilet preparations containing alcohol, etc., were subjected to Provincial excise duties. Each Provincial Government fixed its own rates of duty and followed its own procedure to regulate the imports from arid exports to other Prin. ir;""es of such preparations so that the industry manufacturing these preparations had to contend with severdl.handicaps imposed by such diversities in rates and procedure.
In order to secure (uniformity the entry relating to excise duty on medicinal and toilet preparations containing alcohol, etc., were transferred under the Constitution from the State list to the Union List.
2. The present Bill is Intended to implement this provision in the Constitution, and proposes uniform rates of excise duty and a uniform procedure for the collection thereof. In the case Part A and Part 13 States,the actual collection of the duties will be left with the Governments of theStates, as required by Art. 268 of the Constitution. The existing duties andthe existing procedure for collection under the pre-Constitution statutes of the States which are at present protected under Art. 277 will be replacedby the rates and the procedure proposed in the Bill.
3. The duties specified in the Schedule are, generally speaking, based on th5 recornmendatlons of an Expert Committee appointed by Govern-ment.
STATEMENT OF OBJECTS AND REASONS OF ACT 19 OF 1961 Consequent on the decision to adopt metric units from the 1st April, 1961, in the sale of alcohol and collection of duty thereon, it is proposed to provide for the levy and collection of excise duty on medicinal and toilet preparations in terms of metric units.
At present toilet preparations that are considered capable of being consumed as ordinary alcoholic beverages, are subject to a duty at the rateof Rs.
17/8/- and others at the rate of Rs. 5 per gallon of the strength of London proof spirit. Since toilet preparations are in the nature of luxury articles and there is no foreign competition-imports being banned or severely restricted-it is proposed to fix a uniform rate of duty of about Rs.
32 per gallon of the strength of London proof spirit which comes to Rs. 7 per litre in terms of metric units, irrespective of whether the preparations are capable of being consumed as ordinary alcoholic beverages or not.
Under existing item 2 (ii) of the schedule to the Act, Ayurvedic preparations containing self-generated alcohol which are capable of being consumed as ordinary alcoholic beverages are subject to duty at the rate of Rs. 3 per gallon. However, by virtue of the provision contained in Sec. 19
1. Published in the Gazette of India. Extraordinary, Pt. li, Sec. 1, dated the 29th April, 1955.2. Published in the Gazette of India. Extraordinary dated 16th September, 1954.
(1) [TION 1 SL C1 ION 2 DEFINITIONS 3 rations reparale 10th I to be If India able as irrow or tick . T1ic 1st find trig, so, if xt of the mockery e and for me Courts struction ion to he ii whose dex. The rovisions ice arises but has [cation is ived have ailed the II. Sec. 2.
37 S.C 138 C.C. 36 1 at R New India at p. 129:
69 at p. 79.
0(2) R,C.R.
dia v. Deoki Fishermen's rat Academy lracle Sugar 87) 61 Com.
OA.P., A.I.R.
to Transport 1991 Cr. L.J.
120 at p. 423:
1 at p. 1368:
ip. 115: A.P.
110.
(3) It shall conic into force on such date,1 as the Central Government may. by notification in the Official Gazette, appoint.
2. Definitions .-In this Act unless the context otherwise requires.---
(a) "alcohol" means ethyl alcohol of any strength and purity having chemical composition C2H5 OH;
Cowment List of the Seventh Schedule of the Constitution.-Stale Legislature's power to makelaw under entry 8.--17he enactment of the Medicinal and Toilet Preparations (Excise Duties) Act. 1955 by Parliament under entry 84, List I of the Seventh Schedule of the Constitution of the framing of the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956, the Central Government in exercise of their rule-making power under Sec. 19 of the Act for the purpose of levying duties of excise on medicinal and toilet preparations containing alcohol, etc. do not pi event the State Legislature from making a law under entry 8, List II of the Seventh Schedule to the Constitution with respect to intoxicating liquors, or a law under entry 51. List 11 for levying excise duties on alcoholic requirements for human consumption.2 3[(aa) "Coca derivative" means- ([) crude cocaine that is an extract of coca leaf which can he used directly or indirectly, for the manufacture of cocaine:
(ii) ecgonine, that is laevo-ecgonine having the chemical formula, C9H1 5 NO3 1120, and all the derivatives of laevo-ecgonine from which it can be recovered, and
(iii) cocaine, that is, methyl-benzoyl-laevo-ecgonine having the chemical formula, C1 H2 NO4 and its salts;
(ab) "coca-leaf" means-
(i) the leaf and young twigs of any coca plant, that is, of the Erythroxylo coca (Lamk.) and the Erythroxylon novo-grariatense (llierrr.) and their varieties, and of any other species of this genus which the Central Government may. by notification in the Official Gazette. declare to be coca plants for the purposes of this Act, and
(ii) any mixture thereof, with or without neutral materials;
(b) "collecting Government" means the Central Government or, as the case may be, the State Government which is entitled to collect the duties levied under this Act;
21(bb) derivative of opium, nreatts-
(i) medicinal opium, that is. opium which has undergone the processes necessary to adopt it for medicinal use:
(ii) prepared opium, that is, any product of opium obtained by any series of operations designed to transform opium into an extract suitable for smoking and the dross or other residue remaining after opium is smoked:
(iii) morphine, that is, the principal alkaloid of opium having the chemical formula C 17 H 1 9 NO8, and its salts, and its derivatives: )
1. 1st April, 1957, vide Notifin. No. 5 S.O. 892. dated the 9th March. 1957; see Gazette ofIndia, 1957, Pt. If. Sec. 3.
2. Southern Pharnuureuticals and Chemicals. Trichur v. State of Kerala. A.I.R. 1981 S.C.
1863 at p. 1867.
3. Ins. by Act No. 66 of 1976.
xii MEDICINAL AND TOILET PREPARATIONS (EXCISE DUTIES ) ACT, 1955
5. The Finance Act, 1976 (66 of 1976).
6. The Finance Act, 1981 (16 of 1981).
7. The Finance Act, 1982 (14 of 1982).
8. The Delegated Legislation Provisions (Amendment) Act, 1983 (20 of 1983).
9. The Finance Act, 1989 (13 of 1989).
10. The Finance (No.2) Act, 1998 (21 of 1998)
11. The Finance Act, 2000 (10 of 2000) .3p 1 2 Pub Pub THE MEDICINAL AND TOILET PREPARATIONS (EXCISE DUTIES) ACT, 1955 (Act No. 16 of 1955)1 [27th April. 19551 An Act to provide far the levy and collections of duties of excise on medicinal and toilet preparations containing alcohol, opium, Indian hemp or other narcotic drug or narcotic STATEMENT OF OBJECTS AND REASONS OF ACT, 16 OF 1955 By virtue of entry 40 in List 11 In the Seventh Schedule to the Government of India Act, 1935, medicinal and toilet preparations containing alcohol, etc., were subjected to Provincial excise duties. Each Provincial Government fixed its own rates of duty and followed its own procedure to regulate the imports from and exports to other Prin. ir.r•e;s of such preparations so that the indnrstiy manufacturing these preparations had to contend with several handicaps imposed by such diversities in rates and procedure.
in order to secure uniformity the entry relating to excise duty on medicinal end toilet preparations containing alcohol, etc., were transferreel under the Constitution from the State list to the Union List.
2. Ttie present Bill is Intended to iniplernent this provision in the Constitution. and proposes uniform rates of excise duty and a uniform procedure for the collection thereof. In the case Part A and Part B States, the actual collection of the duties will be left with the Governments of the States, as required by Art. 268 of the Constitution. 'fhe existing duties and the existing procedure for collection under the pre-Constitution statutes of the States which are at present protected under Art. 277 will be replaced by the rates and the procedure proposed in the Bill.
3. The duties specified in the Schedule are, generally speaking, based on th9 recommendations of an Expert Committee appointed by Government.
STATEMENT OF 013iECTS AND REASONS OF ACT 19 OF 1961 Consequent on the decision to adopt metric units from the 1st April.
1961. in the sale of alcohol and collection of duty thereon, it is proposed to provide for the levy and collection of excise duty on medicinal and toilet preparations iii terms of metric units.
At present toilet preparations that are considered capable of being consumed as ordinary alcoholic beverages, are subject to a duty at the rate of Rs. 17/8/- and others at the rate of Rs. 5 per gallon of the strength of London proof spirit. Since toilet preparations are in the nature of luxury articles and there is no foreign competition-imports being banned or severely restricted- it is proposed to fix a uniform rate of duty of about Rs.
32 per gallon of the strength of London proof spirit. which comes to Rs. 7 per litre in terms of metric units, irrespective of whether the preparations are capable of being consumed as ordinary alcoholic beverages or not.
Under existing item 2 (ii) of the schedule to the Act. Ayurvedic preparations containing self-generated alcohol which are capable of being consumed as ordinary alcoholic beverages are subject to duty at the rate of Rs. 3 per gallon. However, by virtue of the provision contained in Sec. 19
1. Published in the Gazette oflndio. Extraordinani. Pt. II. Sec. 1, dated the 29th April. 1955.
2. Published in (he Gazette of India. Evtraordinary dated 10th September. 1954.
MEDiCINALANDTOILLTl'REPAIZA] IONS SECTION 1 2 (EXCISE DUTIES) ACT, 1955
(2) (xix) of the Act, read with rule 8 of the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956 . the rate of duty with respect of such preparations has been reduced to Rs. 1 .75 per gallon with effect from the 10th September, 1960, and it is this reduced rate that is, proposed to be expressed in terms of metric units in the Bill.1 Be it enacted by Parliament in the Sixth Year of the Republic of India as follows:
Comments Interpretation of statutes .-The Court must strive to so interpret the statute as to protect and advance the object and purpose of ttic enactment. Any narrow or technical Interpretation of the provisions would defeat the legislative policy The Courts must, therefore, keel) the legislative policy in mind in applying the provisions of the Act to the facts of the case.
Courts must find out the literal meaning of the expression .---Courts must find out the literal meaning of the expression in the task of construction in eloiug so, it the expressions are ambiguous then the construction that fulfils the ubicct of the legislation must provide the key to the meaning. Courts must not make a mockery of legislation and should take a constructive appoach to fulfil the purpose and for that purpose, if necessary. iron out the creases.'
Social welfare legislation .-in construing social welfare legislation, the Courts should adopt a beneficent rule of construction and in any event, that c•onstniction should be preferred which fulfils the policy of the legislation. Con-;u•ucilon to be adopted should be more benefica to the purposes in favour of :uui. in whose Interest the Act has been passed.
Directory and mandatory .-The language is not always a sure index. The provisions may be directory in form , but mandatory in substance. Some provisions in a statute may he mandatory some others merely directory. The difference arises where the legislature has used a language of apparent compulsive force, but has not prescribed the consequence of its disregard. No rule of general application is possible to be enunciated either. But some tests which the Courts have evolved have worked effectively and with reasonable assurance of success.
Preliminary
1. Short title, extent and commencement .---(1) This Act may be called the Medicinal and Toilet Preparations (Excise Duties) Act. 1955.
(2) It extends to the whole of India.
1. Published In the Gazette of budia. Extruoidinnnl, dated 8th March. 1961, {'t. it. Sec. 2.
2. Kameshwar Singh Srivastava v. iVih Atkll. DistrlctJudge, Lucknow. A.I.R. 1987 S.C 138 at p. 141: Administrator, Municipal Corporation u. D. t tahankar, (1992) ; S.C.C. 36 1 at p. 364: K.S. Paripoornam v. State of Kerala, A.I.R. 1995 S.C. 1012 at p. 1034. New l idta Assurance Co. Lid. V. Mithakhau Dina Khan Netiyar. A.I R. 1995 Gill. 126 at P. 129:
Kristian Prasad Gupta v. Controller. Printing and Stationery. (1996) I S.C.C. 69 at p. 79.
State of Maharashtra v. Nanded Paibhani Z.L.13.M.V. Operator Sangh. 2000 (2) R,C.R.
(Civil) 154 at p. 155 (S.C.): 2000 S.C.C. (Cr".) 318 at p. 322.
3. H. Shiva Rao u. Cecilia Pereira, A.I.R. 1987 S.C. 248 at p. 250: Union of India v. Deoki Nandan Aggarwal. A.I.R. 1992 S.C. 95 at p. 101: Regional Executive, Kerala Fishermen's Welfare Fund Board v. Fancy Food. A.I R. 1995 S.C. 1620 at p. 1623; Manipal Academy of Higher Education v. State of Karnataka. A.i R- 1995 Knt. 273 at p. 286: Miracle Sugar Factory v. State of U.P.. A.I.R. 1995 All. 31 at p. 233.
4. Oriental Fire and General Insurance Company Ltd. e. Aleixo Fernandes, (1987) 61 Conn.
Cas. 130 at p. 148 (Bout.): Bhonagirl Saidanima v. Secret ary. Government of A.1 1. A.I.R.
1995 A.P. 318 at p. 318.
5. Karnataka State Road Transport Corporation, Bangalore i+. Karnataka State Transport i' Cr. 42L.J .
Authority. A.I.R. 1984 Knt. 4 at p. 15: The Food in pecto u.
A.I.R. 1995 Gopalati, All. 1420 at 99 1 1783 at p. 1790 (Ker.) (F.B.): Natthu v. Amar Nath AI, Shashi Gupta u. Life Insurance Corporation of India. A.I R. 1995 S.C. 1:367 at p. 1368;
State alLevel v. Government of N.C.T. of Delhi. 2000 5LCC. i (t...& S.) 206 : t 1).. 210' 1 15: A.P.
SECTION 7 OFTENCES AND PENALTIESSICItON4 7 Iilictiun has me between tsions which nd collcc I ion r, machinery Courts are hargc to tax Dural relation constituted before the new law ca me into force or created by a Dural fact or event takint place before the new law, or any relief or remedy in respect of that right or liability remain unaffected by the new law.
Misuse of alcohol--Prohibition ,t9f. --(n Board ofRevenue, Madras v. Associated Pharmaceutical 1ndust ,ies Pet Ltd.. It is clear that the order passed was in order to prevent the misuse of the alcohol and for the purpose of effectively enforcing the prohibiting programme , It was held that such restrictions are unwarranted and they are made only to effectively implement the prohibition policy. The nrisuss, if apprehended, must be prevented by the citiorcernent of the Act and the Rules.
Juity no 5. Recovery of sums due to Government .-In respect of the duty ofexcise dtlrstandin.a and auiy other sums of any kind payable to t.lte collecting Goverranc•nt under any of the provisions of this Act or of the titles trade thereunder, the Excise conuuodity Officer cm cowered by the said riilcs to levy such duty or require the payment ofstich SUmS, may deduct the atrrount so payable- front any money B. lihavsar owing to the person from whom such stars may he recoverable or clue, tch not only which may be in his hands -)r under his disposal or control or may recover 2ch of tt:c r' the amount by attachment and sale of dutiable goods belongin r to suchGrnr of R se ilrnrs had person: and if the amount payable is not so recovered he may prepare a tnt ttre sons certificate signed by him specifying the amount due from the person liable tonly in the to pay the sum and send to it the Collector of the district in which such ic two firms, person resides or conducts his business, and the said Collector on receipt id the prices of such certificate shall proceed to recover from the said person the amount cal Works to specified therein in the same manner as an arrear of land revenue.
aid prcpara Comment of the word The Excise Officer is empowered to attach or sell the dutiable goods for the )reparations ' recover y of dues.
act that the 6. Certain operations to be subject to licences .--The Central Government therefore. a may. by notification in the Official Gazette, provide that from such date as is fell under may be specified in the notification, no person shall engage in the produetines whist: tion or manufacture of any dutiable goods or of any specified component not capahle pari.s or iugrexlicnis of such goods or of specified container of such goods sitE1errc,fcare, or of label,; (:f such cont:iiiiers except raider the authority and in accordance with the terms and conditions of a licence granted under this Act.
of dutiable (2) Every licence under sub-section (1) shall be granted for such area.
Ipplied to a if any, for such period, subject to such restrictions and conditfous. and in such goods such form and containing such particulars as may be prescribed.
try of excise Comment ivernrnent Control on articles and quantities .---No provision in the statu te even .,:., -sting nent shall. ire a remote manner any control being exercised in relation to the articles to be i]ect of the produced and regarding the quantum that could be manufactured. For understandturcr of the Ing the import of Sec. 6 the provisions in See. l9 arc not only accessible but provide ler this Act. material which must he considered in determining the scope of Sec. 6. The nature of the rrstrtcttons that can be imposed are clearly spelt out In the two clauses of hat when a sub-section (2) of Sec. 19. They clearly show that these restrictions relate (a) to the tang law It is en p lace su ing (the pro per levy and r co llection Of may be carried an and (1)) impose (] by the Act. restriction,, t the t light for ast the said the above, it is not possible to understand Sec. 6 as enabling something more beingrising out of done by way of control "' p. Ii iS.C
1.
19srn AI I- . f 2.
3.
4.
7. Offences and penalties .- If any person-
(a) contravenes any of the provisions of a notification issued under See. 6: or Raj' -hwarSingli r. State of Bihar, A I.R. 1083 Pat. 194 at p. 199; Dahiben tv. Vasanji Kevalbhai , A.I.R.
1995 S.C. 2268 at p . 2271; Saffia Bee-. , B. Sathar, A.I.R. 20W Mad. 167 at p. 173.
1982 E.L.I. 23 (Mad.).
Enoch ^ h,vma n. State of Kerala, A . I.R. 1965 Ker . 291) followed.
'N d at p. 2S1 4 MEDICINAL ANII"I'OILETI'REPARATIONS SFCTION 2 (EXCISE DUTIES) ACI,1955
(c) "dutiable goods" meaiis the medicinal and toilet preparations specified in the schedule as being subject to the duties of excise levied under this Act;
(d) "excise officer" means an officer of the Excise Department of any State and includes any person empowered by the collecting Government to exercise all or any of (lie powers of an excise officer under this Act.;
11(e) "Indian hemp" means-
(i) the leaves, shall stalks and flowering or fruiting tops of the Indian hemp plant (Cannahis-sativa I.), Including all forms known as bhang, sid)ti or ganja.
(ii) charas. that is, the resin obtained from the Indian hemp plant, which has not been submitted to any manipulations other than those necessary for packing arid transport:
(iii) any mixture, with or without neutral materials, of any of the above forms of Indian hemp or any drink prepared therefrom: and
(iv) any extract or tincture of the above forms of Indian hemp: ) (() "manufacture" includes any process incidental or ancillary to the completion of the manufacture of any dutiable goods:
(9) "medicinal preparation" includes all drugs which are a remedy or "prescription" prepared for internal or external use of human beings or animals and all substances intended to be used for or in the treatment, mitigation or prevention of disease in human beings or animals:
2[(11) "narcotic drag" or "narcotic" means a substance which is coca leaf, or coca derivative, or opium or derivative of opium, or Indian hemp and shall include any other substance, capable of causing or producing In human beings dependence, tolerance and withdrawal syndromes and which the Central Government may, by notification in the official Gazette.
declare to be a narcotic drug or narcotic: [ 31((i) "apium" means---
(1) the capsules of the poppy (Papaver somniferuin I.), whether in their original form or cut, crushed or powdered and whether or not juice has been extracted therefrom,
(2) the spontaneously coagulated juice of such capsules which has not been submitted to any manipulations other than those necessary for packing and transport;
and
(3) any mixture, with or without neutral materials of any of the above forms of opiurrr, includes any derivati.e of opium:
(j) "prescribed" means prescribed by rules made under tlii Art.
(k) "toilet preparation" means any preparation which is intended
1. Subs. by Act No. 66 of 1976.
2. Subs. by ibid.
3. Subs. by Act 5 of 1964, Sec. 64.
SI:("rlON S ie under this Bred by rules a reasonable an him, that is false inforlany offence Mt for :1 torn xtend to two to be dutiable d1 which there is here the words ple and explicit ino ambiguity.
in for deriving tzpreted on the irds therefromid to go behind ie of a political stniction of a mit any part of tally applicable any offence nment of any at an offence e forfeiture of nce has been hich any such ssels or other ;y implements ;Dods in respect by rules made )believe to be ommitting an on demand of 4; Mohan Kumar pacer v . Atchatah.
tr V. Shiv Kumar idya. A.I.R. 1987 i9. (S.C.).
SECTION 13 PUN ISIiMENTFORCONNIVANCEATOFFENCES 9 any excise officer duly empowered by rules made under this Act, refuses to give his name and residence. or who gives a name or residence which such officer has reason to believe to be false may be arrested by such officer in order that his name and residence may be ascertained.
Comment the exercise of the power of arrest by the Excise Officer is subject to the belief which should he reasonable that person being arrested Is liable to punishment under the Act.
10. Power to summon persons to give evidence and produce documents in inquiries under this Act.-(1) Any excise officer duly empowered by rules made in this behalf shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making for any of the purpose of this Act.
(2) A summons to produce documents or other things under sub-section (1) may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under the control of the person concerned.
(3) All persons so surnnloned shall be bound to attend either in person or by air authorized agent as such officer may direct and all persons so summoned shall be bound to state the truth on any subject respecting which he is examined or make statements and produce such documents and other things as may be required:
Provided that the exemption under Sec. 132 and Sec. 133 of the Code of Civil Procedure, 1908 (5 of 1908), shall apply to requisitions for attendance under this section.
(4) Every, such inquiry as aforesaid shall be deemed to be a judicial proceeding within the meaning of Sec. 193 and Sec. 228 of the Indian Penal Code (45 of 1860).
Comment 17:c section empowers the Excise Officer to summon any person whose attendance is necessary to give evidence in any inquiry.
11. Officers required to assist excise officers .-A11 officers of Customs and Central Excise, and such other officers of the Central Government as may be specified in this behalf, and all police officers and all officers engaged in the collection of land revenue are hereby empowered and required to assist excise officers in the execution of this Act.
Comment Fiscal laws ..--[ n fiscal laws due importance has to be given to the phraseology used in the charging section.1
12. Owners or occupiers of land to report manufacture of contraband dutiable goods .--Every owner or occupier of land and the agent of any such owner or occupier in charge of the management of that land, if dutiable goods are manufactured thereon in contravention of the provisions of this Act or the rules made thereunder, shall, in the absence of reasonable excuse, be bound to give notice of such manufacture to a Magistrate or to an officer of the. Excise, Customs, Police or land Revenue Department immediately the act comes to his notice.
13. Punishment for connivance at offences .-Any owner or occupier of land or any agent of such owner or occupier in charge of the management of the laud, who wilfully connives at any offence against the provisions of I. state of litliar v. Ashok Industries. A.I.R. 1987 S.C. 838 at p. 840.
6 MEDICINAL ANDTOILET PREPARATIONS SECTION 4 (EXCISE DU IES)ACT,1955 Comments Taxing Provision-Rule of interpretation -It is settled law that a distinction has between to be made by Court while interpreting the provisions of a taxing to tovisions which charging provisions which impose the charge to tax and machinery prot collection provide the machinery for the quantification ions ax and the levying a dmochinery of the tax so imposed. While charging p sections are not generally subject to a rigorous construction. The Courts are expected to con?true the machinery sections in such a manner that a charge to tax is not defeated.
Interpretation of statute .-While interpreting a taxing statute, equity has no place. Th9 clear language of the statute is to be given effect notwithstanding hardship.
Market price .-?e market price relates only to the essential commodity sought to be carried.
Real value of the preparation-Determination of.--The firm of M. B. Bhavsar and Sonsalthoughfirst a pellant anappellants fwer•e parts rs but a sontof eachtof them the olstr P interest was aaoaandd So wand the was of BhavsariChemical Woks. Bothutheseifirms 1 ad t h sit offices and under the partnership agreement the sons appellant and the other two appellants were to share only in the of the original first the spore premises i'thyy cannotbe said to be at arm's length liableiilndependen losses 'lese two firms, t partiesprofits oftherefore. and the prices Bhavsar Chem ical Works to p at which the medicinalM.D. havsa and Sons cannot be taken to be e breal vale of the said preparations. reparat ons Mees dicnaldin reparations were oft the old Schedule does not mean that medicinal of 'Mereferr ag tem forb fact that medicinal re that ions of h the sa defir niweree in seni-solidrf g m was, therefore, a olcin p Parafactor wholly iorelnot nThese p eparatl ns were 1i tent ore pr said oprietary preparations which item was theref9re.oit was rdinary alcoholic undXiat such isputed The High iCou s were ofcontainedc alcohol aand of gright in holding that these medicinal preparations were dutiable under item 1.
4. Rebate of duty on alcohol , etc. supplied for manufacture of dutiable goods manu facturer or any dutiable goods o^ruuse as ancingredient of supplied by. or under by, or nthe authority of, the collecting Government and a duty of exciseent on the goods so for the, time being inyyforceC1thecollecting Government shall under any lawon an application being made to it in this behalf, grant in respect of the duty excise of table under this Act, a rebate to such he duty so recovered over the duty leviable and rrthis Act excecesss, , If any Comments Retrospectivity of a statute .--It is established principle of law that when a d law It is sto be retrospective state e. The 11pr sun pton, ehowever t seagainstgthe said saidintention. A law is said to be not retrospective, when right or liability arising out of
1. Associated Cement Co. Ltd. v. Commercial Tax Officer, Kota, A.I.R. 1981 S.C. 1887 at p. 1904;
Ananda Marga Pracharak Sangh v. C.1.T., (1966) 2181.T.R. 254 at p. 273 (Cal.).
2. Commissioner of Income-tax v. Electro Steel Castings Ltd., (1992) 193 I.T.R. 103 at p. 108 (Orissa);
Regional Executive, Kerala Fishermen's Welfare Fund Fancy Food 349 A.I.R. 5 S.C. 1620.-J p.
1623; Nathuram Agrawal v. State of M.P., 2000 (1) U.J. (S.C.) p-
3. Rudolph Fernandez v. Deputy Commissioner, Mangalore, A.I.R. 1984 Knt. 106 at p. 107.
4. Mohanlal Maganlal Bhavsar v. Union of India, A.I.R. 1956 S.C. 401 at pp. 402, 403: 198(' (23) E.L.T.
3 (S.C.).
5. Ibid., at p. 402.
6. Subs. by Act 66 of 1966, Sec. 39 (a).
SECTION 19 POWERTO MAKE RULES 1CTION 14 fence. be imonths, th.
for quasisw which x accused searches ie carried tocedure, under the order this ff'icer ems no such irge of the person is .to appear ward him tto commits led persons e. 15 to an Istrate. tile iim.
ray exercise tns, as the art to under tstigating a s sufficient inst the acppear before ward him In of sufficient ttnst the acrson on his xcise officer 1, before the 7 (Deltic); Satya Nand Kishore V.
Magistrate having jurisdiction and shall make a full report of all the particulars of the case to his official superior.
(3) All officers exercising any powers under Sec. 15 or this section shall so exercise their powers as to ensure that every person who is arrested and detained in custody is produced before the nearest Magistrate within a period of twenty-four hours of such arrest excluding the time necessary for the journey from the place of arrest to the Court of the Magistrate.
17. Vexatious search , seizure, etc . by Excise Officer.-(1) Any officer exercising powers under this Act or under the rules made thereunder who- (W without reasonable ground of suspicion searches or causes to be searched any place, conveyance or vessel;
(b) vexatiously and unnecessarily detains, searches or arrests any person;
(c) vexatiously and unnecessarily seizes the moveable property of any person on pretence of seizing or searching for any article liable to confiscation under this Act:
(d) commits, as such officer, any other act to the injury of any person, without having reason to believe that such act is required for the execution of his duty:
shall, for every such offence, be punishable with fine which may extend to two thousand rupees.
(2) Any person wilfully and maliciously giving false information and so causing an arrest or a search to be made under this Act shall be punishable with imprisonment for a term which may extend to two years. or with fine which may extend to two thousand rupees, or with both.
Comment The act of wilful and maliciously giving false information so as to cause an arrest or a search to be made under the Act is punishable with imprisonment up to two years or with tine upto two thousand rupees or with both.
18. Failure of excise officers on duty.-Any Excise Officer who ceases or refuses to perform, or withdraws himself from the duties of his office, unless he had obtained the express written permission of his superior officer or has given such superior officer two months' notice in writing of his intention or has other lawful excuse, shall be punishable with imprisonment for a term which may extend to three months, or with fine which may extend to three months' pay, or with both.
Comment The act of refusal to perform or withdrawal of one-self from the duty by the Excise Officer without written permission of the superior is punishable with imprisonment up to three m n;ths or with fine up to three months pay.
Supplementary Provisions
19. Power to make rules .-(l) The Central Government may, by notification in the Official Gazette, make rules to carry out the purposes of this Act.
(2) In particular. and without. prejudice to the generality of the foregoing power, such rules may-
(i) provide for the assessment and collection of duties levied under this Act, the authorities by whom functions under this Act are to be discharged, the issue of notices requiring payment, the manner in which the duties shall be payable and the recovery of the duty not paid:
8 MEI)ICINALANDTOILETPREPARATIONS SECTION 8 (EXCISE DUTIES ) ACT, 1955
(b) evades the payment of any duty of excise payable under this Act: or
(c) fails to supply any information which he is required by rules made under this Act to supply or (unless with a reasonable belief, the burden of proving which shall be upon him, that the information supplied by him is true) supplies false information: or
(d) attempts to commit or abets the commission of any offence mentioned in Cl. (a) or Cl. (b), he shall for every such offence be punishable with imprisonment for a term which may extend to six months , or with fine which may extend to two thousand rupees, or with both.
Comments Applicability .-When the goods seized have not been proved to be dutiable goods, the conviction under Sec. 7 (a) of the Act cannot be sustained. I General principles of construction .-There is one principle on which there is complete unanimity of all the Courts in the world and this is that where the words or the language used in a statute are clear and cloudless, plain, simple and explicit unclouded and unobscured, intelligible and pointed so as to admit of no ambiguity, vagueness, uncertainty or equivocation, there is absolutely no room for deriving support from external side . In such cases, the statute should be interpreted on the face of the language itself without adding. subtracting or omitting words therefrom.
Where the language is plain, and unambiguous the Court is not entitled to go behind the language so as to add or supply omissions z pd thus play the role of a political reformer or of a wise counsel to the Legislature.
Construction of a section.-It is an elementary rule that construction of a section is to be made of all parts together. It is not permissible to omit any part of it. For, the principle that the statute must be read as a whole, is equally applicable to different parts of the same section.
8. Power of Courts to order forfeiture .-Any Court trying any offence under Sec. 7 may order the forfeiture to the collecting Government of any dutiable goods in respect of which the Court is satisfied that an offence under this Act has been committed, and may also order the forfeiture of any alcohol, drugs or materials by means of which the offence has been committed and of any receptacles, packages or coverings in which any such goods or articles are contained and the animals, vehicles, vessels or other conveyances used in carrying such goods or articles, and any implements or machinery used in the manufacture of such goods.
Comment The Court is empowered to order the forfeiture of any dutiable goods in respect of which an offence under the Act has been committed.
Powers and Duties of Officers and Landholders
9. Power to arrest .-(1) Any excise officer duly empowered by rules made in this behalf may arrest any person whom he has reason to believe to be liable to punishment under this Act.
(2) Any person accused or reasonably suspected of committing an offence tinder this Act or any rules made thereunder, who, on demand of
1. Madho Charan Sarkar v. State. A.I.R. 1963 Pat . 211 at p. 213.
2. S.P. Gupta v. President of India. A.I R. 1982 S.C. 149 at pp. 304, 314: Mohan Kumar Singhania v . Union of India . A.I.R. 1992 S . C. I at p . 21: Income- tax Officer v. Atchalah.
(1996 ) 1 S.C.C . 417 at p . 425: Regional Provident Fund Commissioner v. Shiv Kumat Joshi. 2000 (1) S.C.C. 98 at p. 105.
3. Balastnor Nagrik Co-operative Bank Ltd. v. Babubhai Shankerlal Pandya. A.I.R. 1987 S.C. 849 at p. 851; N.K. Jain v. C.K. Shah, 1991 Cr.L.J.1347 at p. 1359. (S.C.).
ICTION 19 SECTION 19 POWFR TO MAKE RULES 13 tlbject to nk fit, the rdutiable ontainers :purpose;
ace where ry process to or from douse, or lrocessl of storage of tdients or sential for r this Act;
xrvise the house to ;factory or ervise the scribe the ment and dure to be goods from goods from which have which have hduty has his Act:
storage or or commisflal for the ier this Act, ecords and nformatiot i ulars to be ey shall be Bred or kept a banderol.
imanner as permits and machinery
(xiii) provide for the confiscation of dutiable goods in respect of which a breach of any rule made under this Act has been committed, and also for the confiscation of any alcohol, drugs or materials by means of which the breach has been committed and of any receptacle, uackages or coverings In which goods or articles are contained, and the animals, vehicles, vessels, or other conveyances used in carrying such goods or articles and any implements or machinery used in the manufacture of SUCh goods;
(xiv) provide for the levy of a penalty not exceeding two thousand rupees for a breach of any rule made under this Act:
(.vu) provide for the procedure in connection with such confiscation and the imposition of such penalty, the maximum limits up to which particular classes of excise officers may adjudge such confiscation or penalty, appeals from orders of such officers and revision of such orders by some higher authority, the tune-limit for such appeals and revisions and the disposal of goods and articles confiscated;
(xvi) authorize and regulate the compounding of offences against.
or liabilities incurred tinder, this Act or the rules made therein icier:
(xvii) authorize and regulate the inspection of factories and provide for the taking of samples or for the making of tests of any substance produced therein and for the inspection or search of any place. conveyance or vessel used for the production, storage, sale or transport of dutiable goods in so far as such inspection or search is essential for the proper levy and collection of the duties levied under this Act:
(xviii) provide for the grant of a reb ate of the duty paid on dutiable goods which are exporte d out of India or shipped for consumption on a voyage to any port outside India;
(xix) exempt any dutiable goods from the whole or any part of the duty levied under this Act where in the opinion of the Central Government, it is necessary to grant such exemption in the interest of the trade or in the public interest:
(xx) notify in the Official Gazette lists of the names and descriptions of preparations which would fall for assessment under any particular item or the schedule or for regulating their manufacture, transport and distribution;
(xxi) authorize particular classes of excise officers to provide by written instructions for supplemental matters arising out of any rule made by the Central Government under this section.
(3) Where any confiscation or penalty has been adjudged in respect of a breach of any rule under this Act, which is also an offence under Sec. 7 the person concerned shall not be prosecuted under that section.
1((4) Every rule made under this section shall be laid as soon as may be after it is made before each House of Parliaiiient while it is in session for
1. Subs . by Act 19 of 1961 . See. 2 . for sub-section (4), w.e.f . 1st June. 1961.
10 MEDICINAL ANDTOII.ETI'REI'AR.ATiONS SECTION 14 (EXCISE DUTIES) ACT, 1955 this Act or any rules made thereunder shall, for every such offence. be punishable with imprisonment fora term which may extend to six months, or with fine which may extend to live hundred rupees. or with both.
Comment Penal provisions-Rule of interpretation .-In any case, when criminal or quasicriminal liability is sought to be imputed on the basis of provisions of law which are capable of two reasonable interpretations, the one favourable to the accused rnust prrvail.
14. Searches and arrests how to be made.-All arrests and searches trade under this Act or under any rules made thereunder shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1898 (5 of 1898).2 relating respectively to searches and arrests under the Code.
15. Disposal of persons arrested .-(1) Every person arrested under this Act shall be forwarded without delay to the nearest Excise Officer empowered to send persons so arrested to a Magistrate or if there is no such excise officer within a reasonable distance to the officer-in-charge of the nearest police station.
(2) The officer-in charge of a police station to whom any person is forwarded under sub-section (1) shall either admit him to bail to appear before a Magistrate having jurisdiction or in default of bail forward him withoul delay in custody to such Magistrate.
Comment Penal provision.-The law in its wisdop seeks to punish the guilty who commits the sift. and not his son who is innocent.'
16. Inquiry how to be made by excise officers against arrested persons forwarded to them.-(1) When any person is forwarded under Sec. 15 to an excise officer empowered to send persons so arrested to a Magistrate. the Excise Officer shall proceed to inquire into the charge against him.
(2) For the purpose of sub-section (1), the Excise Officer may exercise the same powers, and shall be subject to the salve provisions, as the officer-in-charge of a police station may exercise and is subject to under the Code of Criminal Procedure, 1898 (5 of 1898), when investigating a cognizable case:
Provided that-
(u) if the. Excise Officer is of opinion that there is sufficient evidence or reasonable ground of suspicion against the accused person he shall either admit him to bail to appear before Magistrate having jurisdiction In the case, or forward him in custody without. delay to such Magistrate;
(ii) if it appears to the Excise Officer that there is not. sufficient evidence or reasonable ground of suspicion against the accused person, he shall release the accused person on his executing a bond with or without sureties as the Excise Officer may direct. to appear, if and when so required, before the
1. Delhi Development Authority V. H.S. Kalra. 1981 Cr. L.J. 666 at p. 667 (Delhi): Satya Narayan Das v. Government of India, A.M. 1995 Orissa 253 at p. 255.
2 See now the Code of Criminal Procedure. 1973'.2 of 1974).
3. A.S. Sulochana o. C. Dhannalin6am. A.I R. 1987 S.C. 242 at p. 244: Nand Kishore v.
State of Mahn 'ashtra. 1096 (1) Mah.L.J. 145 at p. 156.
SECTION 20 *HEUI'LF: MF1)1CINALANDTO ILE'rI'RFPARATIONS (EXCISE DUTIES ) ACT,1955 '[THE SCHEDULE (See Sec. 3)
(3) 15 slon or 1 [in the session tesaidI both ouses agree !effect only io ho:I.•cver.
.dice- t(, the ings. -- (1) ^overr1ment )tor any act x instituted 'thing clone nonths from act or order rrEM DESCRIPTION OF NO. DUTIAliLl; GOODS
(1) (2) RATE OF D UTY Medicinal Preparations
1. Allopathic Medicinal Preparations
(t) Medicinal preparations containing aitohot which are riot capable of being consumed as o: Binary alcoholic beverages-
(a) Patent or proprietauy 2[Sixt.cen per cent. ad ixtior'em.
niedi cities, ;II) 00-,(.1 s. 2[Sixtecn per cent. ad valorem.
Mellit'i u :-Il !)rc'pari4ilolls colit,tilltnM alcohol which are capable of encernent of immg consumed as ordinary atto this Act, cottolic beverages--
(n) medicinal which apreparations (Sixteen per cent. ad valorem.
sor permits conta?:r i.nowr-t active in- Aredtcnts in therapeutic quailall, so far as title, )d effect as if fb) Others. 2[Sixtcenper cent. ad valorem.
d under this 2 l rlier one either tai by Implicalion in view of ns. As soon as ecific provision under ally law 'In two successive 9d or the session Ira Prade sh, A.I.R.
orem.(iii) Medicinal preparations not con- [Sixteen per cent. ad va taming alcohol but containing narcotic drug or narcotic.
2. Medicinal preparations in Avurvedic, Uilani or other indigenous systems of nierlicine--
(i) Medicinal preparations contain - 2[Nil] lag self-generated alcohol which are not capable of being consume(l as ordinary alcoholic bevcro,gcs.
(ii) Medicinal preparations contain- Four per cent . ad valorem.
tog ,elf generated alcohol which are capable of being consumed as ordinary alcoholic beverages.
(iii) All other containing alcohol Six per cent . ad valorem.
which are prepared by distillation or to which alcohol has been added.
(iv) Meclicirial preparations not con - 2[Sixteen per cent . ad valorem.
taming alcohol but containing narcotic drug or narcotic.
3. 1 loiiiocopathic preparations con- Four per cent . ad valorem.
taming alcohol.
3(3 a. 3 rlornocopathic prepara - Rupees twenty per litre of pure thins containing alcohol. alcohol content.
1. Subs . by the Act l0 of 2000, Sit I I I and "Kh- VI.
2. Subs . by Notifn . No. 2/2003- M &'r11, dated 1st March, 2003
3. Sub% . by Notifn . No. 4/2003- M & TP, dated 10th June, 2003 12 MEDICINAL AND 1OILLTPREPARATiONS SECTION 19 (EXCISEDUTII.S) A(^i, 1955
(ii) prohibit absolutely, or with such exceptions, or subject to such conditions as the 'Central Government may think fit, the manufacture, or any process of the manufacture , or dutiable goods or of any component parts or ingredients or containers thereof, excclrt of land or premises approved for the purpose;
(iii) regulate the removal of dutiable goods from the place where they are stored or manufactured or subjected to any process of production or manufacture and their transport to or from the premises of a licensed person. or a bonded warehouse, or to a market:
(iv) regulate the production or manufacture Ilor any process] of production or manufacture, the possession and storage of dutiable goods or of any component parts or ingredients or containers thereof so far as such regulation is essential for tho proper levy and collection of duties levied under this Act:
(v) provide for the employment of excise officers to supervise the carrying out of any rules made under this Act;
(vi) require a manufacturer or the licensee of a warehouse to provide accommodation within the precincts of his factory or warehouse for Excise Officers employed to supervise the carrying out of rules made under this Act and prescribe the scale of such accommodation;
(vii) provide for the appointment, licensing, management and supervision of bonded warehoi.ises and the procedure to be followed in entering dutiable goods into a clearing goods from such warehouses or in the movement of dutiable goods from one bonded warehouse to another;
(viii) provide for the distinguishing of excisable goods which have been manufactured under licence, or materials which have been imported under licence and of goods on which duty has been paid or which are exempt from duty under this Act:
(ixj impose on persons engaged in the manufacture, storage or sale (whether on their own account or as brokers or commission agents) so far as such imposition is essential for the proper levy and collection of the duties levied under this Act, the duty of furnishing information, keeping records and making returns and prescribe the nature of such information and form of such records and returns the particulars to be contained therein and the manner in which they shall be verified:
(x) require that. dutiable goods shall not be sold or offered or kept for sale except in prescribed containers, bearing a banderol.
stamp or label of such nature and affixed in such manner as may be prescribed:
(xi) provide for the issue of licences and transport permits and the fees, if any, to he charged therefor;
(xii) provide for the detention of dutiable goods, plant, machinery or material for the purpe';e of exacting the duty;
Subs. by Act 58 of 1960. See. 3 and Sch. 11• for "of any process''.
SCHI I>ULC ad "alorem.
ny medicinal both. a name Mary or other in the Official a registered 1958, or any vented words paratiot1 tot the course of fight eit her as without any tyat arate ned to be tile Sec. el of the lExpla.nation dial Gazette.
td under the or the rules In force, to ods, to which table to duty contained in mice declared ch retail: price Idal Gazette.
allowing anv sales tax and tan one retail all he deemed rent packages nt areas, each :purposes of ato which the ce means the m may be sold raise. freight.
arges towards the ease may MEDICINAL AND TOILET PREPARATIONS (EXCISE DUTIES) RULES, 1956 S.R.O. 891, dated the 9th March, 1957.1.--In exercise of the powers conferred by Sec. 19 of the Medicinal and Toilet Preparations (Excise. Duties) Act. 1955 (16 of 1955). the Central Government hereby makes the following Rules. namely:
CHAPTER I Preliminary
1. Short title .--These rules may be called the Medicinal and Toilet Preparations (Excise Duties) Rules, 1Q56.
Comment Interpretation of rule .-The general power of framlctt; rules for effectuating the purpyses of the Act, would plainly authorise and sanctify the framing of such a rule.
2. Definitions .-In these rules unless there is anything repugnant in the subject or context,- (iJ "the Act" means the Medicinal and Toilet Preparations (Excise Duties) Act. 1955:
(ii) "absolute alcohol" means alcohol conforming to the British Pharmacopoeial specification for dehydrated alcohol;
(iii) "bonded manufactory" means the premises or any part of the premises approved and licensed for the manufacture and storage of medicinal and toilet preparations containing alcohol, opium, Indian hemp and other narcotic drugs or narcotics on which duty has not been paid:
(iv) "non-bonded manufactory" means the premises or any part of the premises approved and licensed for the manufacture and storage of medicinal and toilet preparations containing alcohol, opium, Indian hemp and other narcotic drugs or narcotics on which duty has been paid:
"Chemical Examiner" means the Chemical Examiner to the State Government and includes such other officer whom the State Government or the Central Government may at any time appoint as Chemical Examiner;
(vi) "denatured spirit" of "denatured alcohol" means alcohol of any strength which has been rendered unfit for human consumption by the addition of substances approved by the Central Government or by the State Government with the approval of the Central Government;
(vii) "duty" means the duty of excise payable under Sec. 3 of the Act:
(viii) "Excise C mimissioncr" means the Head of the Excise administration of a State and includes a Prohibition Commis-
1. Published in the Gazette of India. 19b7 Pt. 11, Sec. 3, p. 502. "They have been extended to and brought Into force in the Union territory of Dadra and Nagar Havell by G.S.R. 95.
dated the 12th January. 1968.
2. Ram Autar Sanlosh Kumar v. State of Bihar, A.I.R. 1987 Pat. 13 at p. 17; Velur D.
Narayanan v. General Manager. Madras Telephones, A.I.R. 1995 Mad. 290 at p. 292.
(17) 14 MEDICINAL AND TOILET PREPARATIONS SECTION 20 (EXCISE DUTIES) ACT,1955 a total period of thirty days which may be comprised is one session or '[in two or more successive sessions , and if, before the expiry of the session immediately following the session or the successive sessions aforesaid] both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be, so however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under the rule.]
20. Bar of suits and limitation of suits and other legal proceedings.- (1) No suit or other legal proceeding shall lie against the collecting Government or against any officer in respect of any order passed in good faith or any act in good faith done or ordered to be done under this Act.
(2) No suit, prosecution or other legal proceeding shall be instituted against the collecting Government or against any officer for anything done or ordered to be done under this Act after the expiration of six months from the accrual of the cause of action or from the date of the act or order complained of.
21. Repeals and savings .-If. immediately before the commencement of this Act, there is in force in any State any law corresponding to this Act, that law is hereby repealed:
Provided that all rules made, notifications issued , licences or permits granted, powers conferred under any law hereby repealed shall, so far as they are not inconsistent with this Act, have the same force and effect as if they had been respectively made, issued, granted or conferred under this Act and by the authority empowered hereby in that behalf.
Comments Re peal .-There is no doubt that a later statute may repeal an earlier one either expressly or by implication. The Courts have not favoured such repeal by tmplicalicability: The proviso to Sec. 21 cannot change the position in view ofApp the new rules framed in 1956 with respect to medicinal preparations. As soon as the new rule came into force the old rules must fall and there is a specific provision in the new rules (namely rule 143) which say that all rules made under any law corresponding to the Act are hereby repealed.
1. Subs. by Act 20 of 1983, Sec. 2, the Schedule Si. No. 31, for the words. in two successive sessions, and if before the expiry of the session in which it is so laid or the session immediately following'.
2. R.S. Raghunath v. State of Karnataka. (1992) 1 S.C.C. 335 at p. 349.
3. Hyderabad Chemical and Pharmaceutical Works Ltd. v. State of Andhra Pradesh. A.I.R.
1964 S.C. 1870 at p. 1872.
ONS RULF.2 RULE 4 APPOINTMEN •1OFOFFICFItSANDDF.LFGATR)NOFPOW'E RS 10 !'Hr1; 19 in any State as Pre)hibia non-bonded or bonded he storage of its finished the rules;
ltity of alcohol or dutiable my cask or receptacle of ;k or receptacle:
iron-bonded or bonde.1 manufacture of dutiable wlionl a licence has been able goods;
of the Excise Department cting Government to scary or a bonded warehouse Department similarly apficer in whose jurisdiction f any dutiable goods, or of )f manufacture of.or trade of, whether as manufacsided manufacturer or of alcohol by hydrometer nonths beginning with 1st October;
zderiaturecI alcohol of a roof and includes absolute ery medicinal preparation icludes every preparation it as restricted preparation any medicinal preparation a restricted preparation or inexed to these piles;
'the bonded or non -bonded or the storages of alcohol, narcotic drugs or narcotic -ibed rates of duty specified preparation other than a - and (2), 19, 30. 38 (1), 50, ,, 112, 129 (2), 127 and 132 of these Rules Shall, in relation to a Union territory. mean the Administrator thereof appointed under Art. 239 of the Coll - stit cation of India' (xviu) A "sub-standard preparation" is-
(n) a pharmaeopueial preparation in which the amount of any of the various ingredients is below the minimum that the pharrnacopocial compositiori would require, or
(h) a proprietary medicine which does not conform to the formula or the list of ingredients disclosed on tl,c label on the container or on the ec;t/taincr;
(x v) "-warehouse" means any plac•c or premises licensed tourer rule 70.
Cominews '1 he detinition of restricted preparalinrt--tnt.rpr ration of. -"i'lie deliniticn) given under rule 2 (.kip) read with rule 60 (1) v,,wild shc'v that a restricted preparation is one which the Government have ccmsiderertid Let ;tdoptin;;the prescribed prucedure and aitcr taking the advice of the Standing Comrnit'ec. to be capable of being misused as ordinary alcoholic bee tr;c General principles of cuastructioe.-Thcrc is one principle Oil which there is complete unanimay of all lit(- C'eliris in' Ire world and this if, that where tl:e words 01 tlic !a1iguage used hi a statute arcs ckrrand cloudless, plain, simple and r ,hlicit, Uueloudrd and urtol-'se-ured, intern-lihle and pointed So as to admit of Ito ambiguity.
vagueness. uliceriafuty or eriuivocatton. there is absolutely no room for deriving support from external aids. III sucfl case:.. the statute should be interpreted on the face of:hc Iaingimgc itself,vitlioul adding. subtracting or omitting words then-t: oni.
Where cite l;attgua4c is plain, and unambiguous the Court is not entitled to go behind the tanguuge so as to add or supply omission it d thus play the tole of a political refotrner or of a wise counsel to the Legislature.
3. Agent or owner of goods, manufactory or warehouse to be deemed owner for certain purposes.---When any person is expressly or impliedly authorised by the owner of any dutiable goods, manulbetory or warehouse to be his agent cat respect ot•such goods, manufactory or warehouse such agent shall, for all purpose:: of the Act and these rules be deemed to be the owner of such goods. manufactory er warehouse.
CHAPTER 11 Appointment of Officers
4. Appointment of officers and delegation of powers to them .-- -ti) The State Government may appoint such ituntber of Excise Officers as it thinks fit to exercise: all or any of the powers conferred or to discharge all or any of the duties imposed by the Act or these rules and define thce jurisdiction of every such officer.
(if) Unless the State Government in any case otherwise directs, the Excise Commissioner may authorize any Excise Officer subordinate to him to exercise throughout his jurisdiction, or in any specified area therein, all or any of the powers conferred or to discharge all or any of the duties imposed on an Excise Commissioner under t:he.ste mile';.
Pliarrria Prrtiuct Ltd.. Tlianjavur t, District ilevcniie Otice ,'rhauJavur . A.i.R. 1969 Mad.
443 at p. 457.
S.P. Gupta President of India , A.I.R. 1982 S.C. 149 at pp. 304 . 314: Moliau Kumar Singhanla V . Union of India. A . LR. 1992 S . C. I at p. 21: Thomas Antony v. Varkey Varkey, 2000 ( 1) S.C.C. 35 at p. 42.
MEDICINAL ANDTOILET PREPARATIONS
SCHEDULE 16 (EXCISE DUTIES) ACT,1955 Toilet preparations
4. Toilet preparations containing al- (Forty per cent. ad m2lorem.
cohol or narcotic drug or narcotic.
medicines' means any medicinal
Explanation 1.-"Patent or proprietary preparation which bears either on itself or on its container or both, a name which is riot specified in a monograph in pharmacopoeia, formulary or other publications notified in this behalf by the Central Government in the Official Gazette, or which is a brand name, that is, a name or a registered trade-mark under the Trade and Merchandise Marks Act, 1958, or any other mark such as a symbol, monogram, label, signature or invented words or any writing which is used in relation to that medicinal preparation for the purpose of indicating or so as to indicate a connection in the course of trade between the preparation and some person having the right either as proprietor or otherwise to use the name or mark with or without any indication of the identity of that person.
Explanation 11.-Where any article is chargeable to duty at a rate dependent on the value of the article, such value shall be deemed to be the value as determined in accordance with the provisions of Sec. 4 of the Central Excise Act, 1944 (1 of 1944).
Explanation 111.-(1) Notwithstanding anything contained in Explanation II, the Central Government may, by notification in the Official Gazette, specify any dutiable goods, in relation to which it is required under the provisions of the Standards of Weights and Measures Act, 1976 or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such goods, to which the provisions of Cl. (2) shall apply.
(2) Where dutiable goods specified under Cl. (1) are chargeable to duty with reference to value, then, notwithstanding anything contained in
Explanation 11, such value shall be deemed to be the retail price declared on such goods less such amount of abatement, if any, from such retail price as the Central Government may allow by notification in the Official Gazette.
(3) The Central Government may, for the purpose of allowing any abatement under Cl. (2), take into account the duty of excise, sales tax and other taxes, if any, payable on such goods.
(4) Where on the package of any dutiable goods more than one retail sale price is declared, the maximum of such retail sale price shall be deemed to be the retail sale price for the purposes of Cl. (2).
(5) Where different retail sale prices are declared on different packages for the sale of any dutiable goods in packaged form in different areas, each in the tended retail such retail to be sold In the area to vhiich the of the dutiable goods be valuation retail sale price relates.
(6) For the purpose of this Explanation. 'retail sale price' means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards like, as the case may is v the sole cotsideration forwarding and the sale.)adertisement, Vand the price delivery.
be
1. Subs. by Notifn. No. 3/2003- M & TP, dated Ist March, 2003 RULES RULE 9 TIME AND MANNER OF PAYMENTOFDUTY 21 t.-The Exall or Gies.
my dutiable futy or dunes and to such these rules, or otherwise.
temment and no duty shall lufactured t;r rarehouse to iipervision of ntral Governe adininistramt or a State rl Medical Of- Is situated as direct to all or or shortage is licensee of a a such loss or or shortage is xcise Commisover which the ml. the Excise able.]
oinianufactured ible hospitals is itral Governtubject to such tble goods from lthi opinion of tithe interest of Comment The Central Government is empowered to exempt any dutiable goods from the whole or any part of the ditty leviable on such goods in the interest of trade or in the public interest.
9. Time and manner of payment of duty.-(1) No dutiable goods shall be removed from any place where they are manufactured or any premises appurtenant thereto, which may be specified by the Excise Commissioner in this behalf, whether for consumption. export or manufacture of any other commodity in or outside such place, until the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in these rules or as the Excise Commissioner may require:
Provided that such goods may he deposited without payment of duty in a warehouse or may he exported out of India under bond as provided in rule 97:
Provided further that the Excise Commissioner may, if lie thinks fit, instead of requiting payment of duty in respect of each separate consignmerit of goods removed from the place or premises specified in this behalf.
or from a warehouse keep with any person dealing in such goods an account-current of the duties payable thereon and such account shall be settled at Intervals not exceeding three months, and the account-holder shall periodically deposit a sum therein sufficient in the opinion of the Excise Commissioner to cover the duty on the goods intended to be removed from the pla-e of manufacture or storage.
(2) If any dutiable goods are, in contravention of sub-rule (1) deposited in, or rf•moretf from, any place specified therein the manufacturer thereof shall pay the duty leviable on such goods upon written demand made by the proper nl1cer, whether such demand is delivered personally to him or is left at the manufactory or his dwelling-house, and he shall also he liable to a penalty to be determined by the Excise Commissioner which may extend to two thousand rupees, and such goods shall also be liable to confiscation.
Comments Taxing provision-Rule of interpretation.-It is settled law that a distinction has to be made by Court while interpreting the provisions of a taxing statute between charging provisions which impose the charge to lax and machinery provisions which provide the machinery for the quantification of the tax and the levying and collection of the tax so imposed. While charging provisions are construed strictly, machinery sections are not generally subject to a rigorous construction. The Couns are expected to construe (lie machinery sections in such a manner that a charge to tax Is not defeated.
While interpreting a taxing statute, equity has no placa. The clear language of the statute is to be given effect notwithstanding hardship.
Scope of.--Rule 9 (2) of the Rules provides for the imposition of penalty and confiscation of the goods if removed without payment of excise duty in contravention of sub-rule (1). In N. B Sunjarta v. Elphinstone Spin nurg and Weauiny Mills Co. Ltd..3 it has been laid down by the Supreme Court that In the order to attract sub-rule
(2) of rule 9 of the Central Excise Rules, which is the same as sub-rule (2) of rule 9 of the Riles, the goods should have been removed clandestinely and without
1. Associated Cement Co. Ltd. u. Commercial Tax Officer. A.I R. 1981 S.C. 1887 at p. 1904.
2. Comniissioner of Income-Tax. v. Electro Steel Castings Ltd., (1992) 193 I.T.R. 103 at p.
108 (Orissa).
3. A.I.R. 1971 S.C'. 2039, 18 MEDICINAL AND TO ILETPREPARATIONS RULE2 (EXCISE DUTIES) ACT,1955 sioner and also an officer designated in any State as Prohibition or Excise Director;
(ix) "finished store" means that portion of a non-bonded or bonded manufactory which is set apart for the storage of its finished preparations;
(x) "Form" means a Form appended to the rules:
(xi) "gauge" means to determine the quantity of alcohol or dutiable goods contained in, or taken from, any cask or receptacle or to determine the capacity of any cask or receptacle;
(xii) "laboratory" means that part of a non-bonded or bonded manufactory in which the actual manufacture of dutiable goods takes place:
(xiii) "manufacturer" means a person to whorl a licence has been granted for the manufacture of dutiable goods;
(xiv) "officer-in-charge" means an officer of the Excise Department of any State appointed by the collecting Government to supervise work in a bonded manufactory or a bonded warehouse and includes officers of any other Department similarly appointed;
(xv) "proper officer" means an Excise Officer in whose jurisdiction the premises of the manufacturer of any dutiable goods, or of any person engaged in the process of manufacture of,or trade in such goods or containers thereof, whether as manufacturer, wholesale dealer, or intended manufacturer or wholesale dealer, are situated:
(xvi) "prove" means to test the strength of alcohol by hydrometer or other suitable instrument:
(xvii) "quarter" means a period of three months beginning with 1st January, 1st April, 1st July or 1st October;
(xviii) "rectified spirit" means plain undenatured alcohol of a strength not less than 50.0° over proof and includes absolute alcohol:
(xix) "restricted preparation" means every medicinal preparation specified in the sch:°dule and includes every preparation declared by the Central Government as restricted preparation under these rules:
(xx) "unrestricted preparation" means any medicinal preparation containing alcohol but other than a restricted preparation or a spurious preparation:
(xxi) "Schedule" means the schedule annexed to these rules;
(xxii) "spirit store" means that portion of the bonded or non-bonded manufactory which is set apart for the storages of alcohol, opium, Indian hemp and other narcotic drugs or narcotic purchased free of duty or at prescribed rates of duty specified in the schedule to the Act:
(xxiii) (• * * `1 (xxiii-a) "standard preparation" means a preparation other than a "sub-standard preparation":
(xxiii-b) "State Government" in rules 4 (1) and (2), 19, 30, 38 (1), 50, 58 (3), 60 (2), 80, 82 (ii), 96, 199, 112, 129 (2), 127 and 132 24 oalty which b twice the the Excise on to make Itoilet prepinufacturer tanufactory btaining his he State.
Ae.
it case it Is bss is bona e manufacn full or in concession ft made to RULE 26 1N1)FNTFOR RF.CTIFIGDSFIRIT 25
(iu) separate arrangement for manufacture of toilet preparations:
(v) the storage of finished toilet preparations;
(vi) accommodation with necessary furniture near the bonded premises for the officer-in-charge;
(vii) malleable iron rods not less than 19 mm. in thickness, set not more than 102 mm. apart, embodied in brick work up to a depth of at least 51 mm. and covered on the inside with strong wire netting or expanded metal of a mesh not exceeding 25 num. in diameter of length in every window of the bonded premises:
(viii) a board on which the name of the room and a serial number.
if any, are legibly painted in oil colour on the outside of every such room in the manufactory;
(ix) all pipes from sinks or wash-basins inside manufactory premises discharging into drains forming part of the general drainage system of the premises;
(x) all gas and electric connections with the licensed premises so fixed as to admit of the supply of gas or electricity being cut off and all the regulators or switches being securely locked at the end of the day's work.
(2) The Central Government may in special cases relax any of the provisions of Cls. (i) to (x) of sub-rule (1).
Wet prepa- 24. No additions or alterations to be made without orders.-No addition payment of or alteration shall b^ made in the bonded premises or in respect of the and alcohol kipervision; permanent fixtures therein without the previous orders of the Excise which duty Commissioner. Plans, in triplicate showing each addition or alteration shall be submitted with the application for the necessary permission and copies disposed of in the same manner as copies of the original plans of the bonded din the case manufactory as provided in rule 95.
Comment Prior permission of the Excise Commissioner is a must for making alterations ingalcohol , or additions in the bonded premises.
ics 25. Arrangement of receptacles in a bonded manufactory.-(1) The per- Red spirit manent vessels for the storage of alcohol, opium. Indian hemp i.,nd other ,ufacture of narcotic drugs and narcotics received under bond and all the finished othe condi- preparation on which duty has not been paid shall be secured with excise th sufficient ticket locks.
f duty and
(2) All vessels intended to hold alcohol and liquid preparations shall otherwise be gauged by the officer-in-charge. They shall each bear a distinctive serial ranee to the number and their full capacities distinctly and indelibly marked on them.
4llthe doors A record of these details shall be kept in Form R.G.-I.
the officer- (3) Table shall be computed to show contents at an inch and tenth of ianufactory an inch of the depth of each such vessel.
2b. Indent for rectified spirit .-Rectified spirit required for manufacturittached to a ing medicinal and toilet preparations shall be obtained on an indent In Form ich rectified I.D.-1 countersigned by the officer-in-charge, from any distillery or spirit warehouse approved by the Excise Commissioner, the original being sent nal re ara- by the licensee of the bonded manufactory to the distiller the duplicate sent p p through the officer-iii-charge to the distillery or spirit warehouse officer and teal preparatine triplicate retained as office copy. The cost price of such rectified spirit SCHEI)Utf MEDICINAL . ANU'roi .rTI'Rhl'ARA!IONS 22 (rXCISEDUTICS) A(7 ;456 assessment. There is no alle,gatin t it, the inst.'nt case that fire respondent had clandestinely removed the goods trot, Us manalaciory. On the coat azy. it is not dispel-d that the goods were renio cd on tht• basis of applications rt,ade by the respondent in A.R. 2 forms on payment nt ci=-ity assessed try the Excise Officer. "lucre is. therefore, no question of cif ndestine ref loyal of the good and <u:cordir;t;)V, rule 9 (2) will have no application.
10. Alteration of duty.-The rate of duty applicable to goods cleared on payment of'duty shall be the rate in force on the date on which duty iii paid.
or if the goods are cleared from a manufactory or warehouse. on the date of the actual removal of such goods from such manufactory or warehouse- PROVIDED THAT if the goods have previously been removed from a warehouse under bond to be re-warehoused arid the duty is paid on such goods without their being re-warehoused, the rate applicable thereto shall be the rate in force on the date on which duty Is paid. of if duty is paid through an account-current maintained with the Excise Commissioner under Rule 9 on the date on which an application in Form A.R. 2 is delivered to the officer--in-charge of the warehouse from which the t(oods. were removed.
11. Recovery of duties or charges short-levied or erroneously refunded.- When duties or charges have been short-levied through inadvertence, error, collusion or mis-construction on the part of an Excise Officer, or through mis-statement as to the quantity or description of such goods on the part of the owner, or when any such duty or charge, after having been levied, has been, owing to any such cause erroneously refunded the person chargeable with the duty or charge. so short -levied, or to whom such refund has been erroneously made, shall pay the deficiency or repay the amount paid to him in excess, as the case may be, on written demand by the j)roper officer being made within six months from the date on which the duty or charge was paid or adjusted in the owner's account-current. if any, or from date of making the refund.the Comment Terms and Conditions of licence under.--lit the instant case, if the petitioners want to sell their products to any of their agent,, or retailers on the strength of S,P.
VI or VII licence as the case may be they have to abide by the condition prescribed under such licence. No. retailer or wholesale dealer can possess spirituous preparation without licence; nor cai-, they sell or +cal with them except in accordance with the terms aril conditions of a licenceir,sucd under R. I I of (he Kerala Spirituous preparation (Control) Rules. 1969.-
12. Residuary powers for recovery of sums due to Government . --Where these rules do not make any specific provision for the collection of any duty, or of any deficiency in duty if the duty has for any reason been short-levied, or of any other sum of any kind payable to the collecting Government under the Act or these tiles, such duty, deficiency in duty or sum shall, on written demand made by the proper officer, be paid to such person and at such time and place, as the proper officer may specify.
Comment Scope and applicability .-Their lordships of the Madras High Court observed as follows;
'The rules other than Rule 12 (to not contain any specific f uAtston for a case where the manufacturer , due to his own default. tails to take a lieI:ncc and fails to ensure the proper safeguards for the manufacture under Rules 46 to
58. Had he done so, it would. have ensured the levy of duty at the prober tit re and proper place. But that does not mein that the oocis which are :it I i ic under the Act should escape from duty due to the delau,l''f the tu:kill tiucl.ut It is for such cases that Rule 12 provides Lite appropriate power for lev^. it 1' mug
1. State of West Bengal v. Bio-Drug Laboratories Pvt. I.td., 87 CW.`J 245 et p 258.
2. Murleedharan Pillai r. State of Kerala , 200) (4 ) L.1-T. 254 at p. 259 (Ker.).
23RULE 1 ' PEN AUFY [OR 1'A(LURETO FURN!SI1 PROOF OF 1?XPoRT v, iTlr1N THEPRESCRIDED PER1OO 2z in the nature of a residuary power. as the heading itself states. For the appiicat.i.)Ti of Rule t2, there Is,no period of lirnitiicion . A limitation of six months iad is prC,d irtcc; only for Rule 1 1.
got 1:i. No refund of duties or charges erroneously paid, unless claimed within the six nil nths --No duties of char,gcs which have been paid or have been tre adjus, f d In an account-current. maintained with the Excise Commissioner ule uncle. Pule 9 and of w'ilch repayment whnlly or in part is claimed in c oi1sct^^it lie r of the ttavtiig been pair; through inadvertence, error or on miscoitsoaction. •;ltall be iefunded unless a written claim is lodged with id, the proper officer within six months from the date of such payment or ate adjustment -^is the. case may be.
Be! trorn*iteni i'i,c [e pr' ; ,erihes the prt e of hmitaiiun ii.? six months for making the claim Elitall for the refu: a; of riuty nr ritar^t s p:dhi In consequence of inadvertence or some error.
aid 14. Rebate of duty on Foods exported.--- l`he collecting Government get shall, subject to such safeguards, conditions and limitations as are specired fled in Chapter ViI of these rules, grant rebate of duty on dutiable goods, If tre exported out of India.
Comment The ail provides for grata o' rebate of duty in dutiable goods. if imported out rot, of India.
15. E. port under bond of goods on which duty has not been paid.-Dutiable goods may be exported out of India , without payment of duty. from a warehouse or a bonded manufactory, provided that export 1s made in ton accocdancc with the procedure set out in the relevant provisions of Chapter dan Vii of trio :.c. rules and the owne r enters into a bond In Form F3 - 3 with such surety or sucticient security. and tinder such conditions as the Excise Per Conmtissiouei approves. in a sum equal at least to the duty chargeable on forum ihr.t;ood5, for the due export thereof at the place of export, within the period th--A i,lay he soecilled by the ollicer-i. i-charge under sub-rule (3) of Rule 99 and sutra bo,id shall not he ctischaiged unless the goods are duly exported lets out of India, to the salisfac•i,ci of the Excise Commissioner or art, otherwise accounted for the satis,ar_t'un of such officer. nor uittil the ful! duty due bed upon any deficiency of goods riot so accounted for, has been paid.
W- ih. Genera 1 bond by an exporter . -'i'he Excise Commissioner may lace rala perrtlit. any lTert-,ecl person desirous of exporting from his State. In the manner provided in the. foregoing rules, dutiable goods on which ^:.^,• has ere not been paid, to enter i to a general bond in Form 13-3 with such surety aty, or sufficient security, in ::i_ch amount, and under such conditions. as the ted. Exci^-e D`mmission?r approves, f or the export, from time to time , of such der dutiable goods within the period prescribed for the goods exported under ten sub-rule (3) of Rule 99:
uch PROViGE1--f) IHAI' In the event of death. insolvency or insufficiency of the surely, the Excise Conunissioncr may. in his discretion demand a fresh bond aiicr may, if Lilc bond is with security dei i nd at. any time lie considers Teti it fit is do..uidi!-Iona! senurity.
17. Penalty for failure to flimish proof of export within the prescribed br:r period.--w'tien an;, person. authorized to export dutiable goods in bond in and accordance with the provisions of Chapter VII of these rules fails to furnish f310 proof of such expo.: io the s aiisfaction of the Excise Commissioner, he shall t^^, :rl;un o writt.n despond being made by the officer-in-charge forthwith pay tilt I . 'ban ^.; ` ; 'o., Ltd.. lh^t la`' u^ t)istrR t FFc- 'nuc O ffircr , Vianlavnr, A.T.R. 1969 Mad. 448 at !, 455; Sill, ni C,.,ar Cntfan L,bora;n.u•s [ id., ALA. 21X'4 S.C. 45 at pp 54-55.
MEDICINAL AND TOILET PREPARATIONS 24 LSCHEDU1 (EXCISEDUT1ES) ACT, 1956 the duty leviable on such goods, and shall also be liable to a penalty which may, subject to a maximum of two thousand rupees. extend to twice the amount of duty and until such duty and penalty are paid, the Excise Commissioner may in his discretion refuse to permit such person to make further exports of dutiable goods in bond.
CHAPTER TV Manufacture
18. Supply of rectified spirit for manufacture of medicinal and toilet preparations .-Rectifled spirit shall ordinarily be supplied to a manufacturer from a distillery or a spirit warehouse of the State in which the manufactory is situated. The mrectified ants r from however, sources situated outside the State his requirements of pirit Comment Manufacturer can obtain the rectified spirit from outside the. State.
19. Wastage in transit of rectified spirit .-If, in any particular case it is proved to the satisfaction of the Excise Commissioner that the loss Is bona fide and not due to negligence or connivance on the part of the manufacturer, the duty payable in respect of such loss may be waived in full or in part according to the merits of the case.
Except with the prior sanction of the State Government the concession in this rule shall not be applicable to Issues of rectified spirit made to non-bonded manufactories.
20. Mode of manufacture .-Manufacture of medicinal and toilet preparations containing alcohol shall be permitted in bond without payment of duty as well as outside bond. In the case of manufacture in bond alcohol on which duty has not been paid shall be used under excise supervision: