Customs, Excise and Gold Tribunal - Delhi
Wockhardt Pvt. Ltd. vs Collector Of C. Ex. on 12 January, 1999
Equivalent citations: 2000(117)ELT197(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. The issue involved in this appeal filed by M/s. Wockhardt Ltd. is whether the medicine manufactured by them is a patent or proprietary medicine classifiable under sub-heading 3003.10 of the Schedule to the Central Excise Tariff Act or Tariff Item 14E of the erstwhile Central Excise Tariff.
2. Shri C.S. Lodha, ld. Advocate, submitted that the Appellants are manufacturing, inter alia, Veterinary drugs namely, Albandazole suspension, Calcium Borogluconate Oxytetracycline. The Collector, Central Excise, under the impugned order, classified all the three medicines as Patent or Proprietary medicines, observing that in addition to the name and address of the manufacturer, the word "WOCKHARDT" had been printed on the label of the product in a conspicuous manner; that the said word was also embossed on the cap of the container of Oxytetracycline Injection in capital letters: that the printing and embossing the word "WOCKHARDT" connot the connection in course of trade between the medicine and the person having the right as proprietor or otherwise to use the name. He relied upon the decision of the Allahabad High Court in the case of Ramsey Pharma (P) Ltd. - 1983 (12) E.L.T. 78. The ld. Counsel further submitted that Albendazole is a generic name as is evident from American Drug Index and Martindale Extra Pharmacopoeia; that the Drugs Controller granted them licence for manufacture of Albendazole on the condition that preparation shall not be marketed under the brand name but only under generic name; that similarly other two impugned medicaments are also sold under generic name. He also mentioned that it was a legal requirement under the Drugs and Cosmetics Act and the Rules made thereunder to mention the name of the manufacturer on the label; that if a trade connection (sic.) would be established in all cases because as per the legal requirement name of the manufacturer is to be indicated boldly on the pack itself; that whether the name is indicated once in a conspicuous manner on the pack or whether it is also inscribed on the vial to prevent spurious drugs being passed on, would not make any difference in sofar as the interpretation of the Tariff entry is concerned. He relied on the decision of the Madras High Court in the case of Union of India v. Indo French Pharmaceutical Co. - 1983 (12) E.L.T. 725 in which the symbol which was a rectangle with a flame and the words "Indo French" was held not to indicate a connection in the course of trade between medicine and the manufacturer. The Madras High Court observed that there is absolutely nothing in the mark to indicate a connection in the course of trade between the medicine and the Respondent. The ld. Advocate added that there was no monogram printed by them on any label of the impugned products and in cases of their other medicines wherever the monogram was printed on the label, they were paying Central Excise duty. He finally relied upon the decision of the Supreme Court in the case of Astra Pharmaceuticals (P) Ltd. v. C.C.E., Chandigarh -1995 (75) E.L.T. 214 (S.C.) in which the Apex Court made a distinction between the house mark and trade name and held that "the identification of a medicine should not be equated with the product mark. Identification is compulsory under the Drug Rules. Technically, it is known as "House Mark". He further submitted that the Supreme Court approved the ratio laid down by the Madras High Court in Indo French Pharmaceutical Co. (supra), as correctly enunciating the scope of Explanation I to item 14E of the erstwhile Central Excise Tariff. The Apex Court distinguished the Allahabad High Court decision in Ramsey Pharma case, relied upon by the Collector in the impugned order.
3. Shri C.S. Lodha also contended that the major part of the demand was hit by time limit as specified in Section 11A of the Central Excise Act as the show cause notice was dated 27-7-1990 and the period covered by for demanding the duty was 1-7-1985 to 31-3-1990. He mentioned that they had filed Classification list in respect of Albendazole suspension in May, 1983 claiming exemption under Notification No. 234/82; that in respect of Classification list filed on 1-3-1984, the department directed them to classify the product under item 14E; that, however, after going through the labels and communication from FDA, Maharashtra, the Assistant Collector approved the said Classification list; that thereafter Classification lists were filed from time to time which were approved and no appeal had been filed against any of the approvals of the Classification lists; that RT 12 Returns filed from time to time which had also been assessed; that similarly in respect of Oxytetracycline, they filed on 18-1-1989 a C.L. classifying it under sub-heading 3003.10 along with a copy of the label; that the Superintendent, Central Excise, after visiting the factory, raised the query about the picture of animal and use of the word "WOCKHARDT"; that they clarified that the animal picture was shown on the label of all veterinary products as per the requirement of the Drugs and Cosmetics Act and Rules [Rule 97(3)]; that name "WOCKHARDT" was used only to depict the name of the manufacturer; that after further correspondence, the Assistant Collector approved the Classification lists on 19-6-1989. Similarly in respect of Calcium Borogluconate the Appellants had filed C.L. on 1-3-1984 and subsequently from 1985 to 1988 which were duly approved. The ld. Counsel submitted that in these facts and circumstances, there could be no question of any suppression of facts, that all the objections contained in the show cause notice were known to the Department; that it is well settled that when a manufacturer has filed Classification list and samples are drawn, labels are scrutinised and CLs. are approved, there could be no question of alleging suppression of facts. He relied on the following decisions.
1. TISCO's case 1988 (35) E.L.T. 605 (S.C.)
2. Nat Steel Equipment - 1988 (34) E.L.T. 8
4. Shri S. Srivastava, ld. DR submitted that the facts in the case of Astra Pharmaceuticals P. Ltd. (supra) was different from the facts in the present matter inasmuch as the letters "AP" did not constitute a monogram whereas in the present case word "WOCKHARDT" is mentioned very conspicuously which shows the relationship between the impugned product and the appellants; that it was observed in paragraph 5 of the judgment that "The Tribunal found that letter "AP" do not constitute a monogram because the two letters are not interwoven but they being placed side by side in an artistic manner on the top". The ld. DR further submitted that the manner in which the word "WOCKHARDT" was printed on the label and which was not required under the Drugs and Cosmetics Rules, clearly indicate the nexus between the medicines and manufacturer. He also contended that the extended period for demanding the duty was rightly invoked as the Appellants had not disclosed all the facts to the Department; that the fact that the word "WOCKHARDT" was embossed on the cap was not brought to the notice of the department at all. In reply the Counsel submitted that "WOCKHARDT" is only their house mark which does not make the medicine patent or proprietary.
5. We have considered the submissions of both the sides. According to the explanation to erstwhile Tariff Item 14E and Note 2 to Chapter 30 of the Schedule to the Central Excise Tariff Act, patent or proprietary medicines means any drug or medicinal preparation which bears a name which is a brand name, that is, a name or a registered trade mark under the Trade and Merchandise Marks, Act, or any other mark such as a symbol, monogram, label, signature or invented words or any 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. The impugned products have been held to be P or P medicine as the word "WOCKHARDT" was mentioned conspicuously on the label and was embossed on the cap of the container. The matter stands decided by the Apex Court in the case of Astra Pharmaceuticals (P) Ltd. (supra), we are not convinced with the submissions of the ld. DR that the facts of the present matter are different from Astra Pharmaceuticals case. In both the cases the words were written on the label on the basis of which Department had considered their products to be P or P medicines. The Apex Court, after observing that house mark is different from product mark, held as under :
"The "AP" or "Astra" on the container or packing was used to project the image of manufacturer generally. It did not establish any relationship between the mark and the medicines."
6. The Apex Court approved the decision of Madras High Court in Indo French Pharmaceuticals Co. - 1978 (2) E.L.T. (J478) which was upheld by the Division Bench of Madras High Court as reported in 1983 (12) E.L.T. 725 (Mad.) wherein it was held under :
"a close reading of the Explanation, however, in my view indicate that the marks, symbols, monogram, label, signature or other words which are used in the medicinal preparation or its container should be such as to indicate that the medicine is a special preparation made by the manufacturer. The connection between the medicine and the manufacturer contemplated under the Explanation should be such as to indicate that the manufacturer has a proprietary interest in the medicine."
7. In the present matter also except mentioning the word "WOCKHARDT" which is a house mark, nothing else in the form of product mark has been mentioned on the label. In view of these facts, following the ratio of the judgment of the Supreme Court in Astra Pharmaceuticals (P) Ltd., we are of the view that the medicines in question are not patent or proprietary medicines. As the Appeal is allowed on merit, we are not considering the question of time limit.
S.K. Bhatnagar, President
8. I agree entirely with the above order as proposed by the learned Member (T), Hon'ble Shri V.K. Agrawal and would only like to emphasise that the point which has struck the most this time is the fact that the medicine is not a special preparation made by the manufacturer or in other words it is not such a preparation of which he could claim proprietary rights (and there is no indication of any mark or symbol, monogram, etc. which would even otherwise indicate such a relationship with the product). I would also like to add before parting that perhaps this aspect was missed in a couple of cases decided earlier but now that it has been forcefully brought home. I am required to take note of it and record my agreement with the proposed order accordingly.