Baidyanath Ayurved Bhawan (P) Ltd. Jhansi
Vs. Excise Commissioner, U.P. & Ors  INSC 217 (14 October 1970)
14/10/1970 HEGDE, K.S.
CITATION: 1971 AIR 378 1971 SCR (2) 590 1971
SCC (1) 4
D 1989 SC2227 (36,37) F 1990 SC 781 (26) E
1990 SC1814 (24)
Medicinal and Toilet Preparations (Excise
Duties) Act (16 of 1955) s. 4 and Item 1 of Schedule-Medical preparations
containing tinctures which contain alcohol-If dutiable.
The appellant is a manufacturer of certain
medicines with the aid of -substances like tincture, spirit, etc., which
contain alcohol. On the question whether he was liable to pay duty under the
Medicinal and Toilet Preparation (Excise Duties) Act, 1955,
HELD : (1) The preparations are proprietary
medicinal preparations and are not capable of being consumed as ordinary
alcohol beverages, According to Item 1 of the Schedule to the Act, in order to
attract duty, all that is required is that the medicinal preparation should contain
alcohol. Alcohol may be a part of the preparation either because it is directly
added to the solution or it came to be included in the medicinal preparation
because one of its components contains alcohol. [592 E-G] (2)It may be that a
tincture is dutiable under the item, and, when the medicinal preparation in
which it was used is also made dutiable it will involve multi-point taxation.
But s. 4 of the Act shows that the
multi-point tax on medicinal preparations containing alcohol was within the
contemplation of the Legislature. That section provides for rebate of duty on
alcohol supplied to the manufacturer of dutiable goods, and, every rebate presupposes
imposition of tax or duty. [593 B-F] (3) The rebate under s. 4 is confined only
to those goods which directly come within the scope of s. 4 and not to others.
From such a provision it cannot be said that as regard the other medicinal
preparations, there can be no levy when the language of the provision imposing
the levy is plain and unambiguous. [593 F-G] M/,s-. Pharm Products Ltd.
Thanjavur v. District Revenue Officer A.I.R. 1969 Mad. 448, approved.
Cape Brandy Syndicate v. Commissioners of
 1 K.B. 64, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 1924 of 1970.
Appeal by special leave from the judgment and
order dated April 28, 1970 of the Allahabad High Court in Special Appeal 'No.
368 of 1970.
S. V. Gupte and Sobhagmal Jain, for the
0. P. Rana and R. Bana, for the respondents.
591 The Judgment of the Court was delivered
by Hegde J.-In this appeal by special leave the true ambit of item 1 in the
Schedule to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (to
be hereinafter referred to as the Act) read with S. 3(1) of that Act comes up
The appellant is a manufacturer of certain
medicines with the aid of substances like tincture, spirit etc. The tincture
and spirit in their turn contain alcohol. The Superintendent of Excise called
upon the appellant to pay duty under the Act on the medicinal preparation on
the ground that they contain alcohol. The appellant resisted the demand on the
ground that the medicines in question were not prepared by adding pure alcohol;
the fact that the tincture which is a component of that preparation contains
alcohol does not make it a preparation containing alcohol.
That contention was rejected by the
Superintendent of Excise as well as by the High Court in the Writ petition
brought by the appellant.
It is admitted that alcohol though it was not
directly added is a component of the medicinal preparations in question.
The alcohol has not undergone any chemical
change into some other substance. It is present in a liquid form in those
preparations. The question for decision is whether the preparation in question
do not attract duty because alcohol was not directly added to the solution. The
contention of the appellant is that unless alcohol is added into the
preparation in its free condition, a medicinal preparation does not become
dutiable. For deciding this question we may now read the relevant provisions of
Section 3(1) of the Act says "There
shall be levied duties of excise, at the rates specified in the Schedule, on
all dutiable goods manufactured in India." "Dutiable goods" is
defined in s. 2(c) as meaning the medicinal and toilet preparations specified
in the Schedule as being subject to the duties of excise levied under this Act:
"Medicinal Preparation" is defined in S. 2(g) in thesewords :
" "medicinal preparation" includes
all drugs which are a remedy or prescription prepared for internal or external
use of human beings, or animals and all substances intended to be used for or
in the treatment, mitigation or prevention of disease in human beings or
animals." 5 9 2 Item 1 of the Schedule, the only item with which we are
concerned in this case reads as follows :
Item No. Description of Dutiable goods Rate
of Duty Medicinal preparation.
Medicinal preparations, being patent or Ten
proprietary medicines, containing alcohol Percent and which are not capable of
being ab valouem consumed as ordinary alcoholic beverages.
The only other provision which we need
consider is s. 4 of the Act. That section reads thus :
Where alcohol, opium, Indian hemp or other
narcotic drug or narcotic had been supplied to a manufacturer of any suitable
goods for use as an ingredient of such goods by, or under the authority of, the
collecting Government and a duty of excise on the goods so supplied had already
been recovered by such Government under any law for the time being in force,
the collecting Government shall, on an application being made to it in this
behalf, grant in respect of the duty 'of excise leviable under this Act, a
rebate to such manufacturer of the excess, if any, of the duty so recovered
over the duty leviable under this Act." It was conceded that the
preparations with which we are concerned in this case are medicinal
preparations. They are proprietary medicines and that they are not capable of
being consumed as ordinary alcohol beverages. The only question that has to be
decided is whether those preparations contain alcohol. It is admitted that
tincture is a component of that preparation and alcohol is a component of
tincture. Therefore we fail to see how it can be urged that those preparations
do not contain alcohol. In order to attract duty all that is required is that a
medicinal preparation should contain alcohol. Alcohol may be a part of the
preparation either because it is directly added to the solution or it came to
be included in that medicinal preparation because of one of the components of
that preparation contained alcohol. According to the plain language of the
provision all that is required is that the preparation should contain alcohol.
In interpreting a taxing provision, the courts should not ordinarily concern
themselves with the policy behind the provision or even with its impact. As
observed by Rowlatt J. in Cape Brandy Syndicate v. Commissioners of Inland
Revenue(1) in a taxing Act one has to look at (1)  1 K. B. 64.
593 what is clearly said. There is no room
for any intendment.
There is no equity about a tax. There is no
presumption as to a tax. Nothing is to be read in, nothing is to be implied.
One can only look fairly at the language used. It was urged on behalf of the
appellant that if we hold that even indirect introduction of alcohol into a
medicinal preparation brings that preparation within the scope of s. 3(1) of
the Act, it would mean multipoint taxation. Coming to the medicinal
preparations with which we are concerned in this case, it was urged that if the
view taken by the High Court is correct then, first the tincture used became
dutiable and thereafter the medicinal preparations in which tincture was used
became dutiable. It was said that that could not be the intention of the
parliament. We are unable to appreciate this contention. Multipoint taxation is
not unknown to us.
Our attention was invited to S. 4 of the Act
in support of the Contention that the legislature did not intend to levy multi-point
tax. Section 4 provides for rebate of duty on alcohol supplied to the
manufacturer of dutiable goods for use as an ingredient of such goods by or
under the authority of the collecting government and a duty of excise on goods
so supplied bad already been recovered by such Government under any law for the
time being in force. In our opinion this provision instead of supporting the
appellant goes to show that multi-point tax on medicinal preparations
containing alcohol was within the contemplation of the legislature; otherwise
there was no purpose in incorporating S. 4 into the Act. if section 3 did not
impose any levy on medicinal preparations of which pure alcohol is not a
component, there was no need for S. I. There can be no question of any rebate
if there was no levy at all. Every rebate presupposes an imposition of tax or
duty. But the rebate under s. 4 is confined only to those goods which directly
come within the scope of s. 4 and not to others.
That was the will of Parliament. If
Parliament desired to give rebate only in certain cases and not to others, it
cannot be said that as regards the other medicinal preparations there can be no
levy. In our judgment the language of-the provision imposing the levy is plain
and unambiguous. It imposes duty on all medicinal preparations containing
alcohol. At the hearing our attention was invited to the decision of the Madras
High Court in M/s. Pharm Products Ltd. Thanjavur & ors. v. Dist. Rev. Officer(1).
The conclusion reached by that High Court accords with our conclusion.
In the result this appeal fails and the same
is dismissed with costs.
V.P.S. Appeal dismissed.
(1) A.I.R. 1969 Mad. 448.