| SooperKanoon Citation | sooperkanoon.com/5037 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi |
| Decided On | Jun-29-1989 |
| Reported in | (1989)(24)LC465Tri(Delhi) |
| Appellant | Collector of C. Ex. |
| Respondent | Eskayef Limited |
(2) If the aforesaid products are classifiable under Tariff Item 68 whether they are entitled to the benefit of Notification No. 6/84 dated 15-2-1984 as it amended Notification 234/82-C.E., dated 1-11-1982. The exemption given by the aforesaid notification is applicable to animal feed including livestock feed, animal feed suppliment and animal feed concentrates. In other words whether the products are animal feed supplement as claimed by the respondent-company.
2. In order to appreciate the above questions, the exact composition of products manufactured by the respondent company are as follows :1. Bifuran Supplement Furazolidone B.P. (Vet) 3.63% w/w Nitrofurazone B.P. (Vet) 25% w/w 3. It is appropriate at this stage to set out the definition of patent or proprietary medicines as given in Tariff Item 14E and of the animal feed supplement as given in Notification No. 6/84-C.E. (mentioned supra) - Explanation I. - 'Patent or Proprietary Medicines' means any drug 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 mark such as a symbol, monogram, label, signature or invented words or any other mark such as a writing which is used in relation to that 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." Definition of animal feed suplement in Notification 6/84. "Explanation II. - For the purpose of this notification, the expression, - (i) "animal feed supplements" means an ingredient or combination of ingredients, added to the basic feed mix or parts thereof to fulfil a specific need, usually used in micro quantitities and requiring careful handling and mixing." 4. It may also be mentioned at this stage that the respondent company after issue of the Notification 6/84 dated 15-2-1984 filed a revised classification for the aforesaid products under Tariff Item 68 claiming the benefit of the said notification w.e.f . 1-3-1984. Prior to the issue of this notification the admitted position on both sides is that the respondent company was paying duty on the said products under Tariff Item 14E. In the first instance the classification lists had been approved on 4-6-1984 as claimed by the respondent company. Later on, however, a show cause notice dated 31-1-1985 was issued to the respondent company as to why the said products be not classified under Tariff Item 14E and exempt on granted to them w.e.f. 1-3-1984 be not withdrawn and why the duty involved on the clearances of the said products be not demanded under Section 11A of the Central Excises and Salt Act, 1944.
5.1. Issue No. (1). - The Asstt. Collector in de novo proceedings, on remand from the Collector (Appeals), has held these products to be liable to duty under Tariff Item 14E. Accordingly, he has denied the benefit of Notification 6/84 dated 15-2-1984. In a very detailed order the Asstt. Collector, after taking into account the definition of the patent or proprietary medicine under Item 14 E, the available literature on the products or ingredients thereof in standard books such as British Pharmacopoeia and British Pharmacopeia Codex and other authoritative literature and considering also the clinical information in the pamphlet published by the respondent company on the said products has held the product under consideration are patent or proprietary medicines under Item 14 E. The benefit of the Notification 6/84 is not applicable.
5.2. The respondent Company's contention on the other hand is that these products are animal feed supplements for the proper growth of the chicks/birds, for better egg production and for improving feed conversion efficiency. In their reply dated 29th March, 1985 to the show cause notice to the Asstt. Collector at the original stage the respondent company had stated the use of the Bifuran supplement and Neftin in the following terms :- "ii Both 'Bifuran' supplement and 'Neftin' are used to fulfil very specific needs in poultry such as keeping coccidiosis away during growing phases and for improving feed conversion efficiency, weight gain and growth rate in broilers and growers and production efficiency in laying stock. (emphasis supplied) iii. The mixing rate of both 'Bifuran' Supplement and 'Neftin' in the basic feed are in micro quantities, e.g. 'Bifuran' is recommended for mixing in 0.0125% concentration, whereas, 'Neftin' is to be mixed at 0.005% and 0.01% concentrations, respectively.
iv. The mixing of both 'Bifuran' Supplement and 'Neftin' in basic feed has to be carefully monitored. The mixture has got to be uniform in the feed and hence equal quantities of the feed additive/supplement and basic feed have to be thoroughly mixed first - away from light, in a blender. This is then mixed with similar quantity of feed and so on till the entire feed is thoroughly and uniformly mixed in a clean environment away from light, before such feed is packed in bags. All over the world, this mixing is done by careful handling at the feed manufacturer's or home mixer's level." 53. The Collector (Appeals) in the impugned order has held that the products are not classifiable under Tariff Item 14E and the Notification 6/84 dated 15-2-1984, applicable to animal feed supplements is available to the said products. These are known in the trade as animal feed supplements. According to him the products are to be classified according to their trade understanding and commercial parlance. He also takes support in coming to the aforesaid conclusions from the classification of similar products by other competing manufacturers. Some of the products mentioned in the impugned order are like Avicox and Furalay-200 manufactured by Micro Labs. He has also held that simply because the products are manufactured under a Drug Control Licence it does not mean that the products manufactured by the respondent company would automatically come under Tariff Item 14E since the classification for C.E. purposes will have to be done within the frame work of Central Excise Law.
5.4. Now the appellant Collector has submitted the following grounds in his appeal memo. The products contain furazolidone and nitro furozone conforming the B.P. standard which are medicinal ingredient presented in the calcium carbonate base for the purpose of stability in the formulations. The functions of the active ingredients as brought out in the authoritative literature and the clinical information in pamphlet of the respondent company itself, detailed in the order-in-original, bring out the fact that the said products are for treatment or prevention of diseases in the sick birds. These active ingredients, points out the appellant Collector, are well known anti-bacterial and coccidiostat drugs. Dosage rate prescribed in the pamphalets and labels used by the appellant for selling its products are adequate enough to treat or prevent diseases in the sick birds. He has also pointed out that before resorting to the applicability of Notification 6/84 the basic issue for classification of these products under Tariff Item 68 has to be established. The Tariff Item 68 is a residuary item in the Tariff. The Supreme Court in the Dunlop India's case -1983 (13) E.L.T.1566 (S.C.) has held as follows :- (a) The method of use or end-use of an article was not material unless the Tariff Entry so stipulates; (c) The description of a product would not be a clinching evidence for the purpose of deciding the Tariff classification.
5.5. On the basis of above criteria the appellant Collector submits that the products would satisfy the definition of patent and proprietary medicine given in 14E. In this context it has also been pointed out that once a definition has been provided in a statute, the classification of a product has to be made in accordance with the said definition and not on the basis of trade or commercial understanding of the product. The department for this purpose has relied on the Supreme Court's judgment in the case of Indo International Industries v. Sales Tax Commissioner, U.P. -1981 (8) E.L.T. 325 (S.C). It has, therefore, been urged by the learend SDR that the Collector (Appeals) has erred in not applying this fundamental principle enunciated by the Supreme Court.
5.6. Supporting the above arguments of the appellant Collector, the learned SDR, Shri V.M. Doiphode, has pointed out that the basic issue is whether the products are under Item 14E or 68. On the basis of the information discussed in the order-in-original no doubt is left that bifuran supplement is used for treatment or prevention of coccidiosis and Neftin is used for treatment of "stress" debeaking and dehousing in the chicks. These are clearly specific diseases, and, therefore, products satisfy the definition of 14E.5.7. On this very issue the learned SDR has further made a plea that Drugs Act is relevant for determining meaning in the trade, even if for a moment the definition in Tariff Item 14E of patent or proprietary medicine is ignored. For this purpose the learned SDR relies on 1988 (36) E.L.T. 369A (Bom.) [Leukoplast (India) Ltd. v. State of Goa]. He also relies on Madhya Pradesh High Court judgment in 1980 (6) E.L.T.598 para 5 [Ramesh Chemicals v. U.O.I.] wherein it has been held that assistance of the Drugs Act can be taken for understanding the scope of 14E.6. On this issue, controverting the aforesaid pleas, the learned Advocate for the respondent company has urged that definition of drugs in the Drugs Act is not at all relevant. This has been clearly held by the Tribunal in its judgment in the case of Shree Baidyanath Ayurvedic Bhawan Ltd. - 1985 (22) E.L.T. 844 (Tribunal). He also submits that in another case of Richardson Hindustan Ltd. following Vaidyanath Ayurvedic Bhawan (mentioned supra) another judgment of the Tribunal supporting his proposition is given in 1988 (35) E.L.T. 424. The learned Advocate submits that patent or proprietary medicine is also defined in the Drugs Act. Going by that definition the products under consideration cannot be treated as patent or proprietary medicine. He further submits that so far as Neftin-50 and Neftin-200 are concerned there is not an iota of evidence at any time to claim them as medicine.
He further submits that the use of the drugs conforming the B.P.standard is in such micro quantities that they do not have any therapautic effect. So far as Bifuran supplement is concerned the respondent company itself manufactures separate bifuran tablets for curative purposes and it duly pays duty on them under Tariff Item 14E.7. Controverting the aforesaid position the learned SDR has pointed out that the judgments of the Tribunal in Baidyanath's case and the other cases were rendered without noticing the judgments of Bombay & Madhya Pradesh High Courts, in Leukoplast and Ramesh Chemicals case (mentioned supra).
8.1. We have carefully considered the pleas advanced as above on the first issue. After a careful consideration of all the material available on record and the manner of classification and construction of statutes we are of the opinion that the products under consideration fall under Item 14E of CET.8.2. The definition of patent or proprietary medicine has already been set out above. In view of the Supreme Court's clear pronouncements in Collector of Central Excise, Kanpur v. Krishna Carbon Paper Co. -1988 (37) E.L.T. 480 (S.C.) and in the case of Indo International Industries -1981 (8) E.L.T. 325 (S.C.) to the following effects "It is well-settled, as mentioned before, that where no definition is provided in the statute itself, as in this case, for ascertaining the correct meaning of a fiscal entry reference to a dictionary is not always safe. The correct guide, it appears in such a case, is the context and the trade meaning. In this connection reference may be made to the observations of this Court in Commissioner of Sales Tax, U.P. v. S.N. Brothers, Kanpur (AIR 1973 S.C. 78) at page 80 para 5." [1988 (37) E.L.T. 480 S.C.].
"If any term or expression has been defined in the enactment then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in a common parlance or commercial parlance has to be adopted." [1981 (8) E.L.T. 325 S.C.] 8.3. We observe that the classification of any medicine as a patent or proprietary medicine under the Central Excise Tariff has to conform to the definition of the said expression 'patent or proprietary medicine' under Tariff Item 14E. Reference to the Drugs Act for the purpose of classification under the Central Excise Tariff does not appear to be relevant in view of the general principle enunciated by the Supreme Court. Applying the said definition of patent or proprietary medicine under Tariff Item 14E of C.E.T., there is no doubt whatsoever that the products under consideration are for use in the treatment of or for the prevention of ailment in animals. All the products admittedly carry a brand name Bifuran and Neftin. The products, therefore, squarely satisfy the definition of 14E. The arguments of the learned Advocate for the respondent company that the provisions do not have a therapeutic effect is not valid having regard to the dosage prescribed in their own literature for the products. In their own literature the respondent company has prescribed 50 gm. Neftin 200 in every 100 kg.
feed for one week in each month. To counter its 'stress' effects such as dehousing, debeaking, deworming and extremes of weather. On the basis of these dosages 100 ppm of Furazolidone is available in the feed which is also the dosages prescribed for prevention purposes in British Pharmacopoeia Codex 1979 as mentioned in the order-in-original. This is calculated as follows: 100 kg. of feed contains 50 gm. Neftin 200, Neftin 200 in turn contains 20% w/w Furazolidone. Therefore, 1000 gms. of feed will contain 1/10 gms. of Furazolidone.
In other words 1 million gms. of feed would contain 100 gms. of Furazolidone.
8.4. Similarly on the basis of dosage particulars given in the literature of the other product Bifuran supplement it is seen that the prescription for curative purposes is 250 ppm and 100 to 125 ppm for preventive purposes which is well above the dosage rate given for Nitrofurazolidone in the British Pharmacopoeia Codex 1979 page 578 as mentioned in the order in original. Having regard to the aforesaid factors of the prescribed dosages we do not have any doubt that the products under consideration fall under Item 14E inasmuch as they both have therapeutic and preventive purposes in respect of the specific ailments in animals. Manner of taking medicines i.e. with the feed is irrelevant for the purpose of determining whether a commodity is medicine or not.
8.5. It is also pertinent to mention that respondent company itself has admitted in its reply dated 29-3-1985 set out earlier so far as Bifuran supplement is concerned, that it "keeps the coccidiosis away". This is another way of saying that Bifuran supplement prevents coccidiosis in poultry, 8.6. We further observe that once the products satisfy the definition of goods under 14E, there is no question of considering its classification under T.I. 68. It has been held by the Supreme Court in Dunlop India's case, mentioned supra :- "It will be against the very principle of classification to deny at the parentage and consign it to an orphanage of residuary clause." There can be no two opinions that T.I. 68 is a residuary item in the Central Excise Tariff.
8.7. As regards the argument of the learned Advocate for the respondent company regarding discriminatory treatment against the respondent company vis-a-vis a similar products, manufactured by other manufacturers, we observe that this is an argument which is not of much consideration so far as this forum is concerned. We are to consider the facts and circumstances of a particular case. If there is any discrimination vis-a-vis the product of other manufacturers the remedy either lies elsewhere or the remedy lies for the department concerned with the other manufacturers to suitably revise their classification.
9.1. Issue No. (2). - Even though the appeal gets decided on our finding on the aforesaid issue itself inasmuch as the second issue mentioned at the out-set in this judgment would arise only if we had held that the products under consideration fell under Item 68.
Nevertheless, we would like to give our finding on the second issue as well assuming that the products fall under Tariff Item 68.
9.2. The department's contention in this respect is that animal feed supplement is defined in a particular manner as set out above. On the basis of above definition, the products do not satisfy the four conditions namely - (iii) that in the absence of the basic feed, meeting the requirements of micro quantities are not fulfilled.
(iv) the condition stipulating that the products as aforesaid require careful handling and mixing which means that the mixing will have to be done at the manufacturing end itself is not satisfied.
On the other hand the respondent company submits that the definition is to be read in the following manner with the following conditions :- 93. The department's content is that the aforesaid four conditions are not satisfied because the products under consideration are not mixed with any basic feed and therefore, they cannot be considered as 'animal feed supplement' in terms of the definition.
9.4. The respondent company on the other hand has submitted that the product by itself is not required to be mixed with the basic feed at the time of clearance from the factory. It has, however, to be added at the time of preparation of feed mix for the chicks or the animals. If the department's contention is to be up-held as correct, according to the respondent company, the animal feed supplement ceases to be feed supplement; it would become animal feed itself. Thereby no differentiation would be left between the 'animal feed' and the 'feed supplement' as is required to be made in terms of the said notification. In order to butteress this proposition the learned Advocate for the respondent company has relied on the following decisions :-(Aries Agro Vet Industries Pvt. Ltd. v. C.C.E., Bombay) (3) 43 STC 386 - Glaxo Laboratories (India) Ltd. v. State of Gujarat.
9.5. He further submits that prior to issue of the Notification 6/84, the department had issued a trade notice describing such anti-bacterial products as animal feed supplements and as such held to be outside the scope of the expression 'animal feed' which alone was exempted at that time. He submits that trade notice beneficial to the trade is binding on the department as held by the High Court of Gujarat in 1977 (1) E.L.T. J 67 (Nav Gujarat Paper Industries). The learned Advocate has relied on a number of other citations bringing out general propositions such as (1) benefit of doubt should be given to the assessee -1980 (6) E.L.T. 291 - Haldyn Glass Works Pvt. Ltd.; (2) predominent use must be considered in determining the classification of a product [1981 (8) E.L.T. 22 (Del.)] -Alkali and Chemical Corpn. of India Ltd. v. U.O.I. & Ors.
10.1. We have carefully considered the pleas advanced on both sides on this issue. We are not inclined to agree with the department's pleas.
The emphasis laid by the department that the definition prescribes one or more ingredients added with the basic feed at the time of clearance of the goods from the factory is not apparently correct. The words used in the definition namely - "added to the basic feed mix or parts thereof do not imply that these have been used in the sense of a past tense. In either case, some words have to be incorporated in the definition. If we accept department's contention, the words 'which has been or have been' require to be introduced before the aforesaid expression "added to the basic feed mix or parts thereof; if we accept the respondents' contention, the words, 'which is or are' require to be introduced before the aforesaid expression. These words, therefore, can be read in both the senses. In other words the 'supplement' may be mixed with the basic feed mix or may be mixed subsequently at the time of preparing the ration for the animals. Mixing or non-mixing of the products with the basic feed mix at the time of removal from the factory does not detract from their character as feed supplements. This is the sense which clearly emerges from the decision of Gujarat High Court relied upon by the respondent company in the case of Glaxo Laboratories (India) Ltd. v. State of Gujarat. In this respect the following portion from the Gujarat High Court judgment at page 393-394 is quoted below :- "Before the Tribunal, it appears to have been stated on behalf of the assessee that these various products have to be mixed in small proportions with the other feed given to cattle or poultry, as the case may be, and that the products can also be given in the same form without being mixed with any other feed. It also appears to have been stated that the products do not constitute food in the conventional sense of ration for maintenance and that they constitute ration for production in the sense that they supply nutrients for nourishing the body. The Tribunal, upon taking these submissions into account and relying upon its earlier decision in the case of Hoechst Pharmaceutical Limited (Appeal No. 21 of 1972 decided on 9th February, 1973), held that the products cannot be classified as cattle-feed or poultry-feed, as the case may be. It requires to be noted at this stage that the Deputy Commissioner of Sales Tax has observed that on studying the literature in respect of all the four items, it clearly appeared that the products in question were not such as could be given to cattle or poultry without any addition. In terms, the Deputy Commissioner of Sales Tax found that the products in question have to be added to the feed given to the animals or birds and that, therefore, those products are not "original feed but they are supplements". We have ourselves also looked at the literature and we find that the products at Items Nos. (2) and (3) are required to be added to the feed and that the product at Item No. (4) is required to be added to drinking water to ensure unifrom dispersion. It would thus appear that the products in question cannot possibly be administered directly to cattle or poultry without being mixed with any other feed. That, however, is not a circumstance which can make any difference, for, as explained earlier, ration for prodution is usually supplement or additive to normal feed and it can still be treated as cattle-feed as poultry-feed, as the case may be, in the true sense of the word." 10.2. The fact that the term 'supplement' is used in either sense is clear from the 'Glossary of Terms' given in the book Feeds & Feeding (second Edition) by Arthur E. Collison, extracts of which were submitted by the learned SDR during the course of hearing. The term 'supplement' has been defined therein as - "a semi-concentrated source of one or more nutrients used to enhance the nutritional adequacy of a daily ration or a complete ration mixture".
11. Therefore, no doubt is left that if the products had been classified under Item 68 CET, this would have become entitled to the Notification 6/84 dated 15-2-1984. This question is, however, only of academic effect in view of our finding on the first issue. In view of the foregoing discussions we allow the appeal of the department, set aside the impugned order and restore the order of the Asstt. Collector to the extent that the products under consideration fall under Tariff Item 14E with consequential liability of duty upheld in his order.
12. We make it clear that we have not considered the scope of the present Tariff because the issue before us was essentially in respect of show cause notice dated 31st January, 1985 i.e. before the introduction of the present Tariff w.e.f. 28-2-1986.
13. I have gone through the order prepared by Brother, Shri P.C. Jain.
I agree with his conclusion that the goods in question in the present appeal merit classification under Item No. 14E of the Tariff Schedule and not under Item No. 68. I would, however, like to add a few words.
14. The Assistant Collector has quoted extensively from the clinical literature and the labels on the products. The leaflet on Bifuran Supplement is strong evidence of the fact that the substance is a medicine or drug. Firstly, there is a warning that it is to be sold by retail on the prescription of a Veterinary Surgeon only. Secondly, the leaflet lists two uses of the substance, one is to prevent coccidiosis and allow natural immunity to develop as well as to safeguard against setbacks to growth. The dosage rate is indicated as follows :- "Mix at the rate of 100 g in 200 to 260 kg feed from 2nd to 12th week of the chick's life; where intestinal coccidiosis is a problem continue upto point of lay." The second use is in treatment of coccidiosis with a view to ensure rapid return to full performance. The dosage is indicated as follows :- "Mix at the rate of 100 g in 100 kg feed and feed for 7 days only.
Preferably treat the sick birds with 'Bifuran' soluble tablets in drinking water." It is thus clear that, even according to the respondents' own literature, Bifuran Supplement is used for prevention and treatment of coccidiosis in poultry. During the hearing, the Counsel for the respondents laid some stress on the position that Bifuran soluble tablets are recommended for sick birds and these tablets are being cleared on payment of duty under Item No. 14E of the Schedule. The argument is that the respondents themselves distinguished between what falls for classification under Item No. 14E as Patent or Proprietary Medicines and what does not. This argument is not acceptable. As we have noted, the soluble tablets are recommended for treatment of sick birds in drinking water. When the birds are off feed, the way to administer the medicine would be through drinking water or some other alternative method and not through feed. The Counsel's argument thus amounts to a distinction without any real difference.
15. It may further be seen from the Assistant Collector's order that, in the pamphlet "Proven products from SKF for better poultry profits", the respondents had indicated the use of Bifuran Supplement in, apart from prevention and treatment of coccidiosis, the build up of natural immunity against subsequent attacks in birds exposed to coccidials. It is further stated that both Nitrofurazone and Furazolidone in Bifuran possess bactericidal action against a number of gram positive and gram negative bacteria. It is stated that it is for this reason that Bifuran has been used extensively as anti-coccidials and anti-bacterials in various parts of the world. The literature on Bifuran soluble tablets (page 166) of the respondents' paper book shows that the tablets being soluble in water are more conveniently used for curative treatment while supplement is best reserved for preventive usage through feeds.
16. The Assistant Collector has further quoted passages from British Pharmacopoeia Codex 1979 and British Pharmacopoeia which would show that Bifuran is a recognised proprietary name for a combination of Nitrofurazone with Furazolidone.
17. As regards Neftin, it is seen from the passages quoted in the Assistant Collector's order from the publication of the British Pharmacopoeia Commission that Neftin is a proprietary name for the drug Furazolidone.
18. Item No. 14E of the Tariff Schedule requires inter alia that a substance to be classified as patent or proprietary medicine under the said Item should be a drug or medicinal preparation. We have already noted that the goods in the instant appeal are listed in Pharmacopoeial literature as drugs. It has also been noted that they are for use in the treatment of, or for the prevention of, ailments in birds. The substances bear registered trade marks though the names of the substances are to be found in Pharmacopoeial literature. They thus qualify to be classified under Item No. 14E. The question of considering their classification under Item No. 68 of the Tariff Schedule does not, therefore, arise.
19. Since one has to go by the definition in Item No. 14E, CET, the certificates from experts and dealers produced by the respondents are of no avail. These may show the trade understanding of the products but when the statute defines a term that definition shall prevail over trace understanding. Likewise, the alleged classification of similar goods, manufactured by other manufacturers is not a consideration which should in-fluence the decision on classification of the subject goods.
If similar goods manufactured by other manufacturers are being classified differently, that would be a matter to be taken up before the appropriate forum on consideration of equity and discrimination.
20. The Gujarat High Court judgment in Glaxo Laboratories India Ltd. v.State of Gujarat (supra) is not relevant for the present case. The entries in the Sales Tax Schedule which came up for consideration were "Cattle Feed, poultry feed" and "all goods other than those specified...". In the present case, we are concerned with a specific Entry 14E covering patent or proprietary medicines and the residuary Entry No. 68. The latter entry can come into play only if the former is ruled out.
21. Likewise, the Bombay High Court judgment in Glindia Ltd. v. Union of India 1988 (36) E.L.T. 479 is also not applicable to the facts of the present case. In that case, the goods were certain preparations containing vitamins A, B and D which were intended to be used as supplements to other liquid or solid animal feeds. The petitioners had relied upon a certificate from the Commissioner of Food and Drugs Administration to the effect that one of the substances was an animal feed supplement and not a drug within the meaning of the Drugs and Cosmetics Act, 1940. In the present instance, the licence issued to the respondents under the Drugs and Cosmetics Act covers inter alia the subject goods which have been listed as drugs. This is prima facie evidence of the fact that the subject goods are drugs. It is true that the definition of "Patent or Proprietary medicines" under the Drugs and Cosmetics Act cannot be applied for interpretation of Item No. 14E of the Central Excise Tariff Schedule. However, what is relevant and significant is that the two definitions have many close similarities.
The definition of 'P or P medicines' under the Drugs and Cosmetics Act - "a drug which is a remedy or prescription in a form ready for internal or external administration of human beings or animals and which is not included in the edition of the Indian Pharmacopoeia for the time being or any other Pharmacopoeia authorised in this behalf by the Central Government...." And, "drug" has been defined as including "all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagonosis, treatment, mitigation or prevention of any disease or disorder in human beings or animals, including preparations applied on human beings or animals, including preparations applied on human body for the purpose of repelling insects like mosquitoes." The definition covers also other substances and devices. For the present purpose it is relevant to note that the term includes all medicines for internal or external use of human beings or animals, intended to be used for treatment or prevention of any disease in human beings or animals. The definition of "Patent or Proprietary medicines" in Item No. 14E of the Central Excise Tariff Schedule (extracted in Shri P.C. Jain's order) also means "any drug 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." The substantial similarity in the two definitions is obvious. Of course, the purpose of the Drugs and Cosmetics Act being to exercise rigorous control over the manufacture of drugs and related substances, the definition is much wider than in the Central Excise Tariff Schedule. But in so far as a substance fits in with the definition in the Drugs and Cosmetics Act as well as the definition in the Central Excise Tariff Schedule, there is no good reason to discard the evidence in the shape of the drug manufacturing licence granted to the respondents which shows the subject goods as drugs as prima facie evidence of the fact that they are drugs for the purpose of the Central Excise Tariff Schedule also.
22. I agree that the products merit classification under Item 14E of the Tariff Schedule. However, I am of the view that in the light of the classification of the products under Item 14E of the Tariff Schedule the question of considering the classification under Item 68 of the Tariff Schedule does not arise.