H.R. Syiem, Member (T)

1. This is an appeal against order No. C-642/BII-144/83 dated 21st March, 1983 passed by the Collector of Central Excise (Appeals), Bombay which arose from order No. V(14E)4-6/1980/4609 dated 31-12-1981 of the Assistant Collector of Central Excise, Bombay. The dispute is with respect to a medical preparation of M/s. Mac Laboratories Pvt. Ltd. which the appellants call Kemicetine Vaginal Suppositories (KVS) which contain the antibiotic chloramphenicol (CAF). The preparation is manufactured in two different strengths, namely, 0.25 gms. and 0.50 gms. chloramphenicol content. The KVS preparations are classified as patent and proprietary medicines and are assessed under item 14E of the Central Excise Tariff. The dispute arose when the central excise issued five demand notices listed below :-

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2. Under Notification No. 116/69-C.E., dated 3-5-1969 exemption was given under Rule 8, Sub-rule (1) of the Central Excise Rules, 1944 of duty in excess of 2 1/2% ad valorem to patent and proprietary medicines falling under item 14E containing 'chloramphenicol and its esters for oral and parenteral use'. This notification was amended by Notification No. 106/80-C.E., dated 19-6-1980 by which the exemption became total. The manufacturers claim that their preparation KVS was entitled to this exemption. It appears that the assessment was being made under this notification till the demands we have mentioned above were issued by the central excise because they thought that the preparation was not entitled to the exemption and that the medicine should pay duty @ 12.5% ad valorem (+5% special excise duty from 1-3-1978) for the period from January, 1978 to April, 1981.

3. This disagreement revolves around the meaning of the word parenteral. The central excise say that KVS are not parenteral in their application, while M/s. Mac Laboratories maintain that they are nothing but parenteral. Each side has quoted several authorities in support of its point of view.

4. The word parenteral has been understood to refer to medication applied in such a manner that it bypasses the alimentary canal, which has its opening point in the mouth and ends in the anus. Thus if a medication is applied by injecting the medicine directly into the blood stream with a needle and a syringe, it is a parenteral administration. Similarly, if a medicine is applied by injecting it into the muscles, it is also a parenteral administration. The two sides agree on this, but they do not agree about certain other applications like a suppository inserted into the body. The vaginal suppositories are called by the appellants parenteral and by the central excise non-parenteral. But there is no disagreement that the administration of medicines parenterally and non-parenterally will depend on the systemic' absorption of the drug or medicine. In other words, M/s. Mac Laboratories maintain that their suppositories have systemic effect, and therefore, qualify to be classed as parenteral. Central excise dispute it. The learned counsel for the department said the suppositories were not parenteral but have only local/topical use because, to be parenteral, the medication must be administered as an injection. At the time of the argument, the learned counsel for the appellants objected to the department's contention at this late stage that the suppositories have only local/topical administration. He objected to this as being a new point which had never been taken before, and therefore, should not be taken into account.

5. Much arguments were given and affidavits filed by the two sides. On behalf of the appellants, affidavits were sworn by Mr. A.D. Bharwada, Mr. Dalip Zaveri and Dr. D.K, Tank. The affidavits given by Mr. Zaveri in February, 1984 and second one in June, 1984 are in fact no more than exposition of the appellants' case and are really arguments that were advanced before us at the hearing of the appeal. The affidavit by Mr. Bharwada, similarly states the history