Scope and applicability of the provisions of Item 14E of the first schedule.

PADMANABHAN, J.

This writ appeal has been filed by the Union of India against the order of a learned single Judge of this court in W.P. No. 2967 of 1973.

2.The question to be decided in the writ appeal centres round the fact whether the respondent Messrs Indo-French Pharmaceutical Company can be said to have used a mark, symbol, monogram or label in marketing its medicinal preparations. The respondent is a manufacturer of pharmaceutical products, some of which are liable to excise duty, and others not. The respondent has admittedly taken out a licence for the manufacture of those pharmaceutical products in respect of which they are bound to pay excise duty. They manufactured three Indian Pharmacopoeia products, viz.(1) Sulphaguni-dire tablets, (2) Sulpha Dimidine tablets and (3) Calcium Gluconets tablets. These items had been classified as non-excisable, and the respondent has been clearing the items without payment of excise duty with the approval of the Central Excise authorities. While so, on 2nd February, 1971, the third appellant called upon the respondent to show cause why duty should not be levied on the said three preparations from 19th September, 1966 to 9th April, 1970 and why a penalty should not be levied. The respondent contended that these items were not excisable, and consequently no duty was liable to be paid. However the third appellant ultimately levied a sum of Rs. 11, 319.90 by way of excise duty. The respondent having exhausted all the statutory remedies, filed a writ petition which was allowed by a learned single Judge.

3.The label used by the respondent contains the name of the products as per the Indian Pharmacopoeia, and it also contains the name of the respondent as manufacturers. The label shows in bold letters that it is poison. It also contains the Schedule H drug warning. Above all this, the label contains a symbol with the words superscribed 'Indo-French'. The symbol is a very small one and appears to be very insignificant when compared to the over all size of the label.

4.The contention of Mr. K. N. Balasubramaniam, the learned Additional Central Government Standing Counsel, is that since the medicine bears on itself or its container the monogram or a symbol to indicate the connection between the medicine and the manufacturer, it will attract excise duty on the item under item 14-E of the First Schedule to the Central Excises and Salt Act read with the Explanation I thereof. The question is how far this contention can be sustained.

Item 14-E reads as follows :

"Patent or proprietary medicine not containing alcohol, opium, Indian hemp or other narcotic, drugs or other narcotics other than those medicines which are exclusively ayurvedic, unani, sidha or homeopathic. Sixty per centad valorem.

Explanation I.- 'Patent or proprietary medicines' means any drugs or medicinal preparation, in whatever form, for use in the internal or external treatment of, or for the prevention of ailments in, human beings or animals which bears either on itself or on its container or both, a name which is not specified in a monograph in a 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 (43 of 1958), or any other work, such as a symbol, monogram, label, signature or invented words or any writing which is used in relation to the medicine for the purpose of indicating or so as to indicate a connection in the course of trade between the medicine 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.'

5.It is admitted that the three products manufactured by the respondent are Indian Pharmacopoeia products. In the Explanation, these products will become patent and proprietary medicines only if a symbol, monogram, label, Signature or inven