Judgment

HEGDE, J.: In this appeal by special leave the true ambit of item 1 in the Schedule to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (to be hereinafter referred to as the Act) read with S. 3 (1) of that Act comes up for consideration.

2. The appellant is a manufacturer of certain medicines with the aid of substances like tincture, spirit etc. The tincture and spirit in their turn contain alcohol. The Superintendent of Excise called upon the appellant to pay duty under the Act on the medicinal preparations on the ground that they contain alcohol. The appellant resisted the demand on the ground that the medicines in question were not prepared by adding pure alcohol; the fact that the tincture which is a component of that preparation contains alcohol does not make it a preparation containing alcohol. That contention was rejected by the Superintendent of Excise as well as by the High Court in the Writ petition brought by the appellant.

3. It is admitted that alcohol though it was not directly added, is a component of the medicinal preparations in question. That alcohol has not undergone any chemical change into some other substance. It is present in a liquid form in those preparations. The question for decision is whether the preparations in question do not attract duty because alcohol was not directly added to the solution. The contention of the appellant is that unless alcohol is added into the preparation in its free condition, a medicinal preparation does not become dutiable. For deciding this question we may now read the relevant provisions of the Act.

4. Section 3 (1) of the Act says:

"There shall be levied duties of excise, at the rates specified in the Schedule, on all dutiable goods manufactured in India."

5. "Dutiable goods" is defined in S. 2 (c) as meaning the medicinal and toilet preparations specified in the Schedule as being subject to the duties of excise levied under this Act. "Medicinal Preparation" is defined in S. 2 (g) in these words:

" 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."

6. Item l of the Schedule, the only item with which we are concerned in this case reads as follows:

"Item No. Description of dutiable goods. Rate of duty.

Medicinal preparations.

1. Medicinal preparations, being patent or proprietary medicines, containing alcohol and which are not capable of being consumed as ordinary alcoholic beverages. Ten per cent ad valorem.

7. The only other provision which we need consider is S. 4 of the Act. That section reads thus :

"Where alcohol, opium, Indian hemp or other narcotic drug or narcotic had been supplied to a manufacturer of any dutiable goods for use as an ingredient of such goods by, or under the authority of, the collecting Government and a duty of excise on the goods so supplied had already been recovered by such Government under any law for the time being in force, the collecting Government shall, on an application being made to it in this behalf, grant in respect of the duty of excise leviable under this Act, a rebate to such manufacturer of the excess, if any, of the duty so recovered over the duty leviable under this Act."

8. It was conceded that the preparations with which we are concerned in this case are medicinal preparations. They are proprietary medicines and that they are not capable of being consumed as ordinary alcohol i.e. beverages. The only question that has to be decided is whether those preparations contain alcohol. It is admitted that tincture is a component of that preparation and alcohol is a component of tincture. Therefore we fail to see how it can be urged that those reparations do not contain alcohol. In order to attract duty all that is required is that a medicinal preparation should contain alcohol. Alcohol may be a part of