DWD PHARMACEUTICALS LTD Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) The Petitioners have challenged an order passed by Respondent no.5 upholding the order of Respondent no.4 dated 28th October 1997 and order passed by Respondent no.3 dated 1st July 1998 respectively. By the impugned order, Respondent no.5 has held articles contained less than 135 mg Dextropropoxyphene to be correctly taxable under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (for short "M & TP Act").

(2.) The Petitioners are carrying on business of manufacturing medicinal preparations and for the purpose of present petition, the product bearing the name "Lobain" is concerned.

(3.) The Petitioners are registered with Central Government department and have been granted licenses for manufacturing the product Lobain. The Petitioners were paying Central Excise Duty to the Central Government on the said product as according to the Petitioners, the product was not a narcotic drug and did not fall under the definition of "Narcotic Drug" as defined under Section 2- (h) of the M & TP Act. A show cause notice was issued on 26th June 1997 to the Petitioners by the Inspector State Excise "N" Division. The Petitioners were summoned to attend the office of the Inspector State Excise for hearing. The Petitioners replied to the show cause notice contending that the Petitioners were not liable to pay the duty under the M & TP Act. On 20th September 1997, the Superintendent of State Excise (Respondent no.4) issued show cause notice to the Petitioners. The Petitioners replied to the show cause notice and a personal hearing was given to the Petitioners on 27th October 1997. The Respondent no.4 by order dated 28th October 1997 rejected the Petitioners case and directed the Petitioners to pay a sum of Rs.8,71,202/- as excise duty on their product Lobain and to obtain licence as provided for under the M & TP Act. The Petitioners thereafter filed an appeal being Appeal No. 261 of 1997 before the Commissioner of State Excise (Respondent No.3). By order dated 1st July 1998, the Commissioner of State Excise rejected the appeal and confirmed the demand of excise duty and called upon the Petitioners to pay excise duty within 30 days from the receipt of the order and apply for licence under the M & TP Act. The Petitioners challenged the decision of the Commissioner of State Excise by filing Writ Petition no. 1789 of 1998 in this Court. The Petition was disposed of by this Court on 8th October 1998, holding that the Petitioner had alternate remedy by way of Revision Application to the Central Government under Rule 128 of the MTRP (Excise Duties) 1956. The Petitioners thereafter preferred a revision application before Respondent no.5 on 10th November 1998. The impugned order dated 13th April 1999 was passed by Respondent no.5 after hearing the Petitioners and by which the revision application was rejected and the stay initially granted by Respondent no.5 was vacated. Hence this petition.