1. The appeal is against the order of the Commissioner of Central excise, confirming the demand for duty issued to the appellant on the ground that the benefit of notification 170/70 would not be available for the samples of medicaments cleared by it, and imposing a penalty upon it under rule 173Q.2. Entry 24 of the Table to notification 170/70, as amended, exempted patent or proprietary medicaments from the payment of duty, if they were drawn for test for the reasons specified in the notification, and if the quantity did not exceed 1% by value of the total duty paid clearances during the proceeding month. One of the conditions subject to which the exemption was given provided that the conditions subject to which the exemption was given provided that the samples are packed in a form "distinctively different" for regular trade packing and is clearly and conspicuously market as "samples not to be sold." It is for the failure to comply with the condition that the benefit of the notification has been denied.
3. The counsel for the appellant does not deny that the samples in question were not packed differently from the regular trade packing. It is his contention that the provisions of the Drugs and Cosmetics Act 1944 did not permit under the second Schedule to this act, 1944 and Clause (12) of Schedule M.4. The second Schedule provides that patent or proprietary medicine must display the formula or the list of ingredients on the label of the container. Clause 12 of Schedule M reads as follows: (a) Ali containers and closures shall comply with the pharmacopoeia requirements. Suitable specifications, test methods. cleaning procedure and sterilisation procedure, when indicated, shall be used to assure that containers, closure and the other component parts of drugs packages, are suitable and they are not reactive additive, absorptive or leach to an extent that significantly aflects the quality or purity of the drug.
(b) Whenever bottles are being used, the written schedule of cleaning should laid down and followed. Where bottles are not dried after washing, they should be rinsed with deionised water or distilled water." 5. We are not able to see how compliance with these provisions necessarily results in a situation where samples could not be packed distinctly different from the packing of the product which was sold. It is perfectly possible, in our judgment, that more that one packing for goods, each containing the same product. It is also equally perfectly possible to have same bottle or closure of the container differently packed, and possibly more than one container or closure confirming the pharmacopoeia requirements specified in clause (2) of Schedule M. We are therefore unable to accept the contention that compliance with the provisions of the Drugs and Cosmetics Act prevented the appellant from complying with the condition in the notification relating to packing.
6. The counsel for the appellant next places reliance upon a letter F.No. 232/427/93CX7 dated 2.12.1994 of the Ministry of Finance. In this letter, the Ministry refers to the letter written in by the Collector and tells him, "In this matter you are requested to ensure that in future samples are packed in a distinct packing and that such pack is marked conspicuously with "samples not to be sold." According to the counsel for the appellant, this letter of the ministry was in reply to the Collector's letter forwarding to it a representation of the pharmaceutical manufactures expressing their difficulties in complying with the requirement of distinctive packing. He says that the reference to the precautions to be followed in future indicates that duty cannot be enforced. We are completely unable to agree. The reply of the Board is of no help to anybody. It does not contain anything that is not contained in the notification. All that it does is to tell the Collector that the condition in the notification must be complied with.
How from this it is to be concluded that past breaches have been condoned is beyond our capacity to understand, apart from the fact that the ministry has no power under law to condone such as a past breach.
7. We are therefore of the view that the demand for duty has rightly been confirmed. Except for reducing the penalty from Rs 50,000/- to Rs 20,000/-, we see no reason to interfere.