G.P. Singh, C.J.
1. By this petition under Article 226 of the Constitution, the petitioner challenges the order dated 15th Oct. 1975 passed by the Assistant Collector, Central Excise, Raipur, and the order dated 5th March, 1976 passed by the Appellate Collector, Central Excise, New Delhi.
2. The petitioner is a partnership firm registered under the provisions of the Indian Partnership Act. The petitioner, amongst others carries on the business of repacking glucose in small packets. The petitioner purchases glucose from M/s. Anil Starch Products Ltd. and M/s. Maize Products, Ahrnedabad packed in bags. The petitioner repacks glucose in small cartons and tin containers with the label containing trade mark of Eagle Brand. The manufacturers namely, M/s. Anil Starch Products Ltd. and M/s. Maize Products, from whom the petitioner purchases glucose in bulk, pay excise duty under Tariff Item No. 1-E of Schedule 1 of the Central Excises and Salt Act, 1944, and put on every bag and bills the specific wording 'not for Medical Use'. The view taken by the Asstt. Collector and the Appellate Collector is that repacking of glucose done by the petitioner amounted to 'manufacture' within the definition as contained in Section 2(f)(iii) of the Act and the petitioner was liable to pay excise duty under Tariff Item No. 14-E of Schedule 1. The question before us is whether the view so taken by the Asstt. Collector and the Appellate Collector is correct in law.
3. Section 2(f)(iii) reads as follows:
'(f) 'manufacture' includes any process incidental or ancillary to the completion of a manufactured products; and
* * * *(iii) in relation to patent or proprietary medicines as defined in Item No. 14-E of the First Schedule and in relation to cosmetics and toilet preparations defined in Item No. 14-F of that Schedule, includes the conversion of powder in tablets or capsules, the labelling or relabelling of containers intended for consumers and repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumers',
Tariff Items Nos. 1-E and 14-E of Schedule I are as under:-
'IE Glucose and Dextrose and Preparations thereof: Ten per cent . ad valorem.
(1) Glucose in whatever form, including liquid glucose, dextrose monohydrate and anhydrous dextrose.
(2) Preparations of glucose and dextrose in which the reducing sugars expressed anhydrous dextrose amount to more than 80% by weight.
14E. Patent or proprietary medicines not containing alcohol, opium, Indian hemp or other narcotic drugs or other narcotics other than those medicines which are exclusively Ayurvedic, Unani, Sidha or Hompeopathic Twelve and a half per cent ad valorem.
Explanation I. 'Patent or proprietary medicines' means any drug or medicinal preparation, in whatever form, for use in the internal or external treatment of, or for the prevention of ailments in human beings or animals which bears whether on itself or on its container or both, a name which is not specified in a monograph in a Pharmacopoeia, Formulary or other publications notified in this behalf by the Central Government in the Official Gazette or which is a brand name that is, a name or a registered trade mark under the Trade and Merchandise Marks Act, 1958 (43 of 1958), or any other mark such as a symbol, monogram label signatureor 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.
Explanation II.- 'Alcohol', 'Opium', 'Indian Hemp', 'Narcotic Drugs' and 'Narcotics' have the meanings respectively assigned to them in Section 2 of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955.'
4. A reading of the aforesaid provisions will show that in relation to patent or proprietary medicines as defined in Item No. 14-E the labelling or relabelling of containers intended for customers and repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumers falls within the definition of 'manufacture'. The definition of 'patent or proprietary medicines' is given in Explanation I to Item No. 14E. It is not disputed before us that the condition of naming as required by the definition is satisfied in respect of the packages of glucose prepared by the petitioner. The petitioner's only contention is that glucose is neither a drug nor a medicinal preparation and, therefore, it is outside the definition of 'patent or proprietary medicine'. It is also pointed out that glucose is separately taxable under Tariff Item No. 1-E.
5. A look at the various Tariff Items in Schedule I will go to show that these items have been grouped together under different headings. Item Nos. 1 to 3 come under the heading 'Food'. Item No. 1-E which is one of these items is widely worded. Glucose in whatever form including liquid glucose, dextrose monohydrate and anhydrous dextrose and preparations ofgluco.se and dextrose are taxable under this entry at 10% ad valorem. Item No. 14-E comes under the head 'Chemicals'. The separate enumeration of glucose under the heading 'Food' is a very significant indication that the Schedule does not treat glucose as a patent or proprietary medicine falling under Tariff Item No. 14-B. Patent or proprietary medicine within Tariff Item No. 14-E must be a drug or medicinal preparation. There is no definition of 'drug' contained in the Act. 'Drug' is, however, denned in Section 3(b) of the Drugs and Cosmetics Act, 1940 as follows:
'(b) drug includes-
(i) all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of disease in human beings or animals; and
(ii) such substances, (other than food) intended to affect the structure or any function of the human body or intended to be used for the destruction of vermin or insects which cause disease in human beings or animals, as may be specified from time to time by the Central Government by notifiation in the Official Gazette.'
A look at the above definition will show that drug includes substances other than food intended to affect the structure or any function of the human body. Things which can fall within the category of food are expressly excluded from the definition of drug. The expression 'any drug or medicinal preparation' as used in Explanation I defining 'patent or proprietary medicines' indicates that the words 'medicinal preparation' are used in the same sense as 'drug'. This inference is further supported by Section 3(h) of the Drugs and Cosmetics Act which defines 'patent or proprietary medicines' to mean a drug. The assistance of the Drugs and Cosmetics Act can be taken for understanding the scope of Tariff Item No. 14-E of Schedule I of the Central Excises and Salt Act for there cannot be any manufacture of patent or proprietary medicines unless they are in accordance with the Drugs & Cosmetics Act [see Calcutta Clinical Research Assoc. Ltd. v. The Union of India, 1971 Tax LR 1073 at p. 1076 (Cal)]. Glucose having been separately classified as an article under the heading 'food' in Tariff Item No. 1-E, we think that the reasonable inference to draw is that it was not intended to be included in Item No. 14-E which comes under the head 'Chemicals'. In our opinion, the Asstt. Collector was not right in taxing glucose repacked by the petitioner under Item No. 14-E.
6. The petition is allowed. The impugned orders of the Asstt. Collector and the Appellate Collector are quashed. There shall be no order as to costs. Security amount be refunded to the petitioner.