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296 EXCISE LAW TIMES [ Vol. 373

tice on 15th December, 1997. The Respondents addressed a communication dated
17th November, 1998 and claimed that the Petitioners were manufacturing the
subject formulations which were Narcotic substance without permission and had
committed a criminal offence. The Petitioners were called for a personal hearing
on 30th November, 1998 but which could not be attended by the Petitioners due
to the non-availability of the concerned person. The Petitioners informed Re-
spondent No. 4 on 12th December, 1998 that the subject formulations contained
only 65 mgs. of Dextropropoxyphene and since the notification issued by the first
Respondent provided for formulations having more than 135 mgs. of Dextro-
propoxyphene to be classified as a narcotic substance, the subject formulations
would not be covered by the definition of Narcotic under the M & TP Act.
6. The Inspector of State Excise Department, Vashi on 29th December,
1998 visited the factory of the Petitioners and seized the stock of the subject for-
mulations on the ground that the Petitioners had evaded State Excise Duty and
that the Superintendent of State Excise Department issued an alleged order dated
16th December, 1998 which was not served upon the Petitioners. The Petitioners
informed the Superintendent of Central Excise by their communications dated
5th January, 1999, 3rd February, 1999 and 11th February, 1999 that the State Ex-
cise Authorities are demanding duty on the subject formulation under the M &
TP Act and that no Central Excise Duty is payable under the Central Excise Tariff
Act, 1985. The Petitioners having not received any communication from the Cen-
tral Excise Authorities filed this Petition.
7. The Petition came up for admission on 4th May, 1999 when the Divi-
sion Bench of this Court passed an order wherein the Petitioners were directed to
pay duty at the rate of 20% to the State Government under the M & TP Act and
the Petitioners were directed not to deposit any duty with the Central Excise Au-
thorities under the Central Excise Act till the hearing of the Petition. In the event
that the Petitioners were to succeed in the Petition, the State Government shall
remit the amount payable by way of duty to the authorities under the Central
Excise Act out of the amount deposited by the Petitioners by virtue of the said
order. Insofar as the duty already paid @ 15%/16% to the Union of India under
the Central Excise Act the Petitioners were to furnish particulars of the duty paid
in the past under the Central Excise Act and the State Government was to find
out the differential amount payable by the Petitioners, in the event it was held
that the M & TP Act is applicable. This was to be intimated to the Petitioners and
Petitioners were to deposit the said amount within four weeks of the receipt of
the intimation by the State Government. By a further order dated 13th February,
2006 passed in a Civil Application taken out by the Petitioner, order dated 2nd
February, 2005, by which the Petition was dismissed for default was recalled and
Rule was issued.
8. An Affidavit has been filed by one Pratapsinh Damodar Golekar,
Deputy Commissioner of State Excise (Medicinal and Toilet Preparations), Maha-
rashtra State, Mumbai dated 3rd May, 1999 in Reply to the Petition. In the said
Affidavit the deponent has relied upon an order of the Government of India dat-
ed 13th April, 1999, which rejected a revocation application by one D.W.D.
Pharmaceuticals Ltd. and placed reliance upon a judgment of the Supreme Court
in M/s. Baidyanath Ayurved Bhavan Ltd. v. Excise Commissioner, UP and Ors [AIR
1971 S.C. 378 = 1999 (110) E.L.T. 363 (S.C.)] where it was held that mere presence
of alcohol in a medicine is sufficient to make the medicine dutiable under the M
& TP Act. The formulations containing less than 135 mg. Dextropropoxyphene
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