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Andhra Pradesh High Court
Judges : B.SUBHASHAN REDDY, S.S.M.QUADRI
Procter and Gamble India Ltd. - Appellant
Versus
Union of India - Respondent
Decided On : 12-22-92
CENTRAL EXCISE - CLASSIFICATION OF GOODS - AYURVEDIC MEDICINES - LICENCE ISSUED UNDER DRUGS ACT - CONCLUSIVENESS - WHETHER THE LICENCE ISSUED UNDER THE DRUGS ACT AND THE RULES IS CONCLUSIVE OF THE DRUGS NAMED IN THE LICENCE BEING AYURVEDIC DRUGS - WHETHER FOR THE PURPOSES OF CLASSIFYING A DRUG UNDER CHAPTER 30 OF CETA, THE LICENCE ISSUED UNDER THE DRUGS ACT AND THE RULES TO MANUFACTURE AYURVEDIC DRUGS, IS CONCLUSIVE OF THE DRUGS NAMED IN THE LICENCE BEING AYURVEDIC DRUGS.
Fact of the Case:
The petitioner, a company manufacturing Ayurvedic drugs, challenged the order of the Assistant Collector, Central Excise, classifying its products, Vicks Vaporub and Vicks Inhaler, under sub-heading 3000.10 with a 15% excise duty, instead of under sub-heading 3000.30, which would have exempted them from excise duty. The petitioner contended that the licence granted under the Drugs Act and the Rules was conclusive evidence of the products being Ayurvedic medicines.
Finding of the Court:
The Court held that the existence of an alternative remedy of appeal was not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution of India, but that it was a matter of discretion rather than jurisdiction. However, the Court found that the petitioner was pursuing two parallel proceedings, an appeal before the Collector (Appeals) and the present writ petition, and that this was not permissible. Therefore, the Court dismissed the writ petition.
Issues: 1. Whether the petitioner could be permitted to pursue two parallel proceedings - an appeal under Section 35 of the Central Excise Act before the Collector (Appeals) and the Writ Petition under Article 226 of the Constitution of India. 2. Whether for the purposes of classifying a drug under Chapter 30 of CETA, the licence issued under the Drugs Act and the Rules to manufacture Ayurvedic drugs, is conclusive of the drugs named in the licence being Ayurvedic drugs.
Ratio Decidendi: 1. The Court held that the rule of exhaustion of alternative remedies would not apply where an adequate alternative remedy is available to the petitioner, the High Court will normally decline to issue the Writ. This is a rule of convenience and discretion rather than a rule of law. It does not create a bar on the exercise of jurisdiction, but is a factor to be taken into consideration in the exercise of jurisdiction under Article 226. 2. The Court held that the provisions of the Drugs Act, the Central Excise Act and the CETA are entirely different enactments with different objects so the provisions of one Act cannot be read into another Act. The definitions contained in the Drugs Act have no relevancy for purposes of classification under the CETA and that in any event the petitioner can urge all these contentions before the appellate authority.
Final Decision: The Court dismissed the writ petition, holding that the petitioner could not be permitted to pursue two parallel proceedings. The Court also directed the Collector (Appeals) to dispose of the petitioner's appeal on merits within two months from the date of receipt of the judgment.
( 1 ) IN this petition filed under Article 226 of the Constitution of India, the petitioner seeks a writ of Mandamus praying to quash the decision of the Assistant Collector, Central Excise, Hyderabad, in C. No. V/30/17/19/89. V. C. I. dated 12-4-1990 after declaring that the petitioner s products Vicks Vaporub and Vicks Inhaler (hereinafter referred to as "the products") fall under sub-heading 3003. 30 of the Central Excise Tariff Act, 1985 (for short CETA) and for consequential direction restraining the respondents, their servants, officers and agents from levying and recovering duty of excise under sub-heading 3003. 10 with immediate effect and for a further direction quashing the proceedings before the Collector (Appeals) including the order for refund of the duty paid by the petitioner from 15/04/1985 and for costs.
( 2 ) IT would be appropriate to note the relevant facts which led to filing of this Writ Petition.
( 3 ) THE petitioner is a company registered under the Companies Act. It manufactures and sells, inter alia, Ayurvedic drug products known as Vicks Vaporub and Vicks Inhaler and Vicks cough products. The first two mentioned drugs are manufactured at its factory in Medak District of Andhra Pradesh. The controversy in this Writ Petition relates to classification of the said two drugs viz. Vicks Vaporub and Vicks Inhaler (the products) under the CETA. The petitioner claims that they fall under sub-heading 3000. 30 whereas the Excise authorities classified them under sub-heading 3000. 10. If the said products are classified as contended by the petitioner it need not pay any excise duty, but if the contention of the department is accepted, the rate of excise duty payable is 15%. The petitioner obtained a letter of registration from the Directorate General of Technical Development, Government of India for manufacture of Ayurvedic drugs including the said products in Andhra Pradesh on 6-9-1984. One of the conditions of the said letter is that it should obtain permission from the State Drug Controller before starting production of the items under reference. Under Rule 153 of the Drugs and Cosmetics Rules, 1945 (for short "the Rules") made by the Central Government under Sections 6 (2), 12 and 33 of the Drugs and Cosmetics Act, 1940 (for short "the Drugs Act"), the petitioner applied for a licence for manufacture of the Ayurvedic drugs, which was granted under Rule 154 of the Rules. Thus the petitioner has been manufacturing the said products. Initially the products were classified under the then sub-heading 3000. 19 but latter the petitioner s company filed fresh classification lists with the Assistant Collector, Central Excise, Hyderabad, the 4th respondent herein, classifying the said products as Ayurvedic medicaments liable to duty under sub-heading 3000. 30 of CET on 15-4-1986. The 4th respondent rejected the classification lists filed by the petitioner on 15-4-1986, confirming the earlier classification. The petitioner carried the matter in appeal before the Collector (Appeals), Central Excise, Hyderabad, the 2nd respondent. That appeal was decided ex parte rejecting the contention of the petitioner on 10-1-1987. The petitioner filed a further appeal before the Customs, Excise and Gold (Control) Appellate Tribunal (for short "the CEGAT") against the said order of the 2nd respondent. On 10-2-1988 the CEGAT set aside the order of the 2nd respondent dated 10-1-1987, remanded the matter to the 4th respondent for de novo enquiry, inter alia holding that Vicks Vaporub is known as Ayurvedic medicament in common parlance, to determine whether the ingredients of Vicks Vaporub and Vicks Inhaler are mentioned in the authoritative text book and thus allowed the appeal. Special leave application filed by the 4th respondent against the said order of CEGAT was dismissed by the Supreme Court. After remand the 4th respondent, by order dated 12-4-1990, held that Vicks Vaporub and Vicks Inhaler were not
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