LexTHE STATE OF GOA AND ANR. versus M/S. COLFAX LABORATORIES.LTD. AND ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A B THE STATE OF GOA AND ANR. . . v. MIS. COLFAX LABORATORIES.LTD. Ai--iD ANR. - • . , ' . ·;I . ~ " • .J ~ . - . I OCTOBER. 29, 2003 (S. RAJENDRA BABU AND G.P. MATHUR, JJ.] Medicinal and toilet Preparations (Excise Duty/Act, 1955~ecti0n 2(g) and (k)-After shave; lotion-Manufa'ctitred under· a licen9e for manufacture of cosmetiC products--Classification_:_Whether it' is 'toil~t , . . . • I C preparation' or 'medicinal preparation '-Held:· Since the good is not for diagnosis, treatment, mitigation or preven'tion of a~y disease b;' disorder, it not being a durg and hence cannot come within pu"rview. of 'medicinal preparation '-Ditty liable to be'"/evied on it ~s a· 'toilet prepa~ation '.'....:. Drugs and Cosmetics Act,. 1940-.:....Sectio~ 3(aaa).l.DAgs and Cosmetics Rules, 1945--Chapter Vil. '. · ' · · · · 1 ' ., ' " · D , ,~ i. ,1 Medicinal and Toilet Preparations (ExCise Duties) 'Rules, 1955.:...:.. Rules 11and12-'-After Shave Lotion-Duty.ofi-f>aiii by ihanufaeturer till 1984 as toilet preparation-After the order from ExCise CommissiOrfer duty paid as meaicinal preparaiion.c.!..Notice under Sectioh I j /n 199 i "demanding E balance duty on the ·ground that duty should 'have been paid as' toilet preparation-High Court held that the ·notic~s issuea would be c'onstroed under Ruli·j I-On appeal, held ."Order ofChn1missioner directing to pay 'the duty 'as· medicinal preparation being a 'nuility 'hCIVing been passed without jurisdiction is liable to be ignored and Revenue lntitled to ~ecdver F the deficiency in duty w.ej the date duty was not paid-Since the duties had not. been short levied through ·inadvertence; ~;r~r, collusion or misconstruction on' ihe part of Excise 'Officer ~; th~~·ugh' misstatement on n- • t f". '~ . ~ . Ll I J I" i 1 1 f • part .of owner, Rule 11 is not applicable~ There being no specific provision for such case, Sectio~ '12 wil/"apply. ,,. ::· '· · : . · . ·. G Central Excise Act, 1944-Section 4(4)(d):...:...£:i~ise' du~Rate of- Calculation-Held: Has to be calculated applying the formula laid down in Section 4(4)(d). Respondent-Company manufactured After Shave Lotion, under H a Licence under Medicinal and Toilet Preparations (Excise Duties) Act, 1050 ST ATE v. COLFAX LABORATORIES LTD. 1051 1955 for manufacture of cosmetic products. Till the year 1984 the A excise duty on the product was on the basis of it being a toilet preparation. ln 1985 company moved an application before commissioner of Excise for reclassification of the product as a 'medicinal preparation' for the purpose oflevy of excise duty. Excise commissioner issued show cause notice to the company and then by order dated B 23.3.1985 classified the same as 'medicinal preparation'. Another company which manufactured After Shave Lotion under the loan licence with the company. The licence issued to it was for manufacture of cosmetic products. The company started paying duty on the product at the rate applicable to 'medicinal preparations.' c In 1991 Commissioner of Excise issued notices under Rule 12 of Medicinal and Toilet Preparations (Excise Duties) Rules, 1956 to the Companies demanding balance of excise duty on the ground that the duty should have been pai~ as 'toilet preparation'. The Commissioner, after hearing the parties passed the order holding that After Shave D Lotions were toilet preparations. Writ Petition against the order dismissed by High Court, holding that the products are toilet preparations and Revenue was entitled to recover short paid duty on account of erroneous classification of the product. However, it held that the notices issued would be construed in exercise of Rule 11 of the E Rules and hence the Revenue was entitled to recover the duty within a period of 6 months immediately proceeding the date of issue of each of the notices, and that quantification of duty will have to be worked out by applying the formula as laid down in Section 4(4)(d) of Central Excise Act, 1944, and consequently excise duty will have to be deducted F from the wholesale price and the figure arrived at would be the value . of the excisable goods. Hence the present appeals. The issues before this Court are : 1. Whether the products in question are 'medicinal preparation' G or 'toilet preparation'? 2. Whether the notices issued by Excise Commissioner should be treated to be one under Rule 11 or Rule 12 of Medicinal and Toilet
Excerpt shown. Read the full judgment & AI analysis in Lexace.