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Sunali Textile Corporation Vs. Union of India and ors. - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtGujarat High Court
Decided On
Case NumberSpecial Civil Application No. 758 of 1980
Judge
Reported in1986(9)ECC177; 1986LC26(Gujarat); 1986(23)ELT433(Guj)
ActsDrugs and Cosmetics Act, - Sections 3
AppellantSunali Textile Corporation
RespondentUnion of India and ors.
Appellant Advocate S.I. Nanavati and; Rakesh Gupta, Advs.
Respondent Advocate S.R. Shah, Central Government Standing Counsel
Excerpt:
central excise - exemption--tariff items--sanitary pad--is absorbent cotton covered by word 'drug'--entitled to exemption under notification no. 55/75-ce, dated 1st march, 1975--construction of statutes--words and phrases--'drug', meaning of--common parlance meaning not attracted--central excises and salt act (1 of 1944), schedule i, item 68--drugs and cosmetics act (23 of 1940), section 3(b). - industrial disputes act, 1947. section 2(s): [m.s. shah, sharad d. dave & k.s. jhaveri,jj] workman part time employees held, part time employees are not excluded from the definition of workman in section 2(s) merely on the ground that they are part time employees. the ex abundante cautela use of the words either whole time or part time by the legislature in the definition of working journalist.....mehta, j.1. this petition raises a question whether surgical dressings such as hospital/maternity/sanitary pads are drugs or not. if it is treated as drug as contemplated by the petitioners, they would be entitled to exemption under tariff item 68, being notification no. 55/75 ce dated 1-3-85 as specified item no. 19. the said notification exempts from tariff item no. 68' all drugs, medicines, pharmaceuticals and drug intermedients not elsewhere specified.' 2. the contention of the respondent-authorities is that these pads are not drugs because drug is one, which is used for curing any ailments in human body and the hospital/maternity/sanitary pads are not used for such purposes. this question is practically concluded by the division bench of this high court in the case of rainbow.....
Judgment:

Mehta, J.

1. This petition raises a question whether surgical dressings such as hospital/maternity/sanitary pads are drugs or not. If it is treated as drug as contemplated by the petitioners, they would be entitled to exemption under Tariff Item 68, being notification No. 55/75 CE dated 1-3-85 as specified item No. 19. The said Notification exempts from Tariff Item No. 68' all drugs, medicines, pharmaceuticals and drug intermedients not elsewhere specified.'

2. The contention of the respondent-authorities is that these pads are not drugs because drug is one, which is used for curing any ailments in human body and the hospital/maternity/sanitary pads are not used for such purposes. This question is practically concluded by the Division Bench of this High Court in the case of Rainbow Surgical Dressing Mfg. Co. v. Union of India and others. - 21 (2) G.L.R. 632. In that case, the products were such as gauses and surgical roll bandages. The affidavit-in-reply in that case stated that 'I admit that the final product is drugs falling under Tariff Item 68 and exempted from payment of duty with effect from 1-3-1975.'

3. A classifications letter issued, by the Ministry of Finance, Department of Revenue dated 13-3-80 has also clarified this thing and it is stated there that surgical cotton (absorbent cotton wool), gauzes, bandages and other non-medicated surgical dressing are 'drugs' within the meaning of the definition of drugs I given in Section 3(b) of the Drugs and Cosmetics Act and that they would be entitled to exemption under notification No. 55/75-CE.

4. The learned Counsel for the respondents states that the present products, namely sanitary pads, cannot be said to be any of these things. These sanitary pads are nothing but absorbed cotton made hygienic for absorbing blood so as to hygenically treat bleeding and to prevent infection. They are absorbent cotton wool and they are covered by the word 'drug'.

5. In the case of Chimanlal Jagjivandas Sheth v. State of Maharashtra, AIR 1963, S.C. 665, the Supreme Court had held that the definition of 'drugs' in Section 3(b) of the Drugs Act is comprehensive enough to take in not only medicines but also substances intended to be used for or in the treatment of diseases of human beings or animals, and this artificial definition introduced a distinction between medicines and substances, which are not medicines strictly so-called.

6. In view of the aforesaid Division Bench Judgment of this Court, the letter of the Ministry of Finance, and the above Judgment of Supreme Court, there cannot be any doubt that sanitary pads are drugs and, therefore, exemption notification will be attracted in the present case and the petitioners would be entitled to the benefit of the same. Common parlance test would not be attracted in this case.

7. In the result, the petitioner succeeds and the rule is made absolute by declaring that the petitioners are entitled to exemption under notification No. 55/75-CE, dated 1-3-1975 as amended from time to time under Tariff Item 68 and accordingly the respondents are restrained from levying and collecting duty so long as that exemption is in force.

8. Rule is made absolute with costs.

9. The learned counsel for the respondents prays for leave to appeal to the Supreme Court under Article 133(1) of the Constitution of India. As the Division Bench has already granted leave in the case of Rainbow Surgical Co. (Supra) leave is granted in the case also and the certificate as prayed for is granted.


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