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Union of India Vs. Indo-french Pharmaceutical Company - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtChennai High Court
Decided On
Case NumberWrit Appeal No. 52 of 1978
Judge
Reported in1984(2)ECC237; 1983LC41D(Madras); 1983(12)ELT725(Mad)
ActsCentral Excises Act, 1944 - Sections 3
AppellantUnion of India
Respondentindo-french Pharmaceutical Company
Appellant AdvocateK.N. Balasubramaniam, Adv.
Respondent AdvocateK.P. Jagadeesan, Adv.
Cases Referred(V. Susheela v. The Assistant Collector of Central Excise
Excerpt:
central excises & salt act, 1944 : section 3 - classification--t.i./14ean insignificant symbol is not a 'monogram' or 'trade mark' : use of such a symbol on the label does not render the product liable to duty under ti/14e as p or p medicine : order of single judge upheld. - .....fact whether the respondent messrs indo-french pharmaceutical company can be said to have used a mark, symbol, monogram or label in marketing its medicinal preparations. the respondent is a manufacturer of pharmaceutical products, some of which are liable to excise duty, and others not. the respondent has admittedly taken out a licence for the manufacture of those pharmaceutical products in respect of which they are bound to pay excise duty. they manufactured three indian pharmacopoeia products, viz. (1) sulphagunidire tablets, (2) sulpha dimidine tablets and (3) calcium gluconets tablets. these items had been classified as non-excisable, and the respondent has been clearing the items without payment of excise duty with the approval of the central excise authorities. while so, on 2nd.....
Judgment:
ORDER

Padmanabhan, J.

1. This writ appeal has been filed by the Union of India against the order of a learned single Judge of this court in W.P. No. 2967 of 1973.

2. The question to be decided in the writ appeal centres round the fact whether the respondent Messrs Indo-French Pharmaceutical Company can be said to have used a mark, symbol, monogram or label in marketing its medicinal preparations. The respondent is a manufacturer of pharmaceutical products, some of which are liable to excise duty, and others not. The respondent has admittedly taken out a licence for the manufacture of those pharmaceutical products in respect of which they are bound to pay excise duty. They manufactured three Indian Pharmacopoeia products, viz. (1) Sulphagunidire tablets, (2) Sulpha Dimidine tablets and (3) Calcium Gluconets tablets. These items had been classified as non-excisable, and the respondent has been clearing the items without payment of excise duty with the approval of the Central Excise authorities. While so, on 2nd February 1971, the third appellant called upon the respondent to show cause why duty should not be levied on the said three preparations from 19th September 1966 to 9th April 1970 and why a penalty should not be levied. The respondent contended that these items were not excisable, and consequently no duty was liable to be paid. However the third appellant ultimately levied a sum of Rs. 11,319.90 by way excise duty. The respondent having exhausted all the statutory remedies, filed a writ petition which was allowed by a learned single Judge.

3. The label used by the respondent contains the name of the products as per the Indian Pharmacopoeia, and it also contains the name of the respondent as manufacturers. The label shows in bold letters that it is poison. It also contains the Schedule H drug warning. Above all this, the label contains a symbol with the words superscribed 'Indo-French'. The symbol is a very small one and appears to be very insignificant when compared to the over all size of the label.

4. The contention of Mr. K. N. Balasubramaniam, the learned Additional Central Government Standing counsel, is that since the medicine bears on itself or its container the monogram or a symbol to indicate the connection between the medicine and the manufacturer, it will attract excise duty on the item under item 14-E of the First Schedule to the Central Excises and Salt Act read with the Explanation I thereof. The question is how far this contention can be sustained.

Item 14-E reads as follows :

'Patent or proprietary medicine not containing Sixty per centalcohol, opium, Indian hemp or other narcotic, ad valorem.drugs or other narcotics other than thosemedicines which are exclusively ayurvedic,unani, sidha or homeopathic. Explanation 1. - 'Patent or proprietary medicines' means any drugs 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 either 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 work, such as a symbol, monogram, label, signature or invented words or any writing which is issued in relation to the medicine for the purpose of indicating or so as to indicate a connection in the course or 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.'

5. It is admitted that the three products manufactured by the respondent are Indian Pharmacopoeia products. In the Explanation, these products will become patent and proprietary medicines only if 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. In other words, if a manufacturer uses a word, symbol or monogram, apart from a monograph in a pharmacopoeia, formulary or other publications, that could be treated as indicating that the manufacturer has a proprietary interest in the medicine manufactured by him. The symbol used by the respondent cannot be described as a monogram. In the Concise Oxford Dictionary, 6th Edition, the meaning of 'monogram' is given thus - 'Two or more letters, especially person's initials, interwoven as device'. In view of this meaning of the word 'monogram', the learned Standing Counsel contended that it might be taken to be a symbol and even then these products would become patent or proprietary medicines under Explanation I to Item 14-E. We are unable to accept this contention of the learned Standing Counsel. In order to attract the Explanation I to Item 14-E, the symbol must 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 label itself contains the name of the respondent in full as 'Indo-French ., Nanganallur, Madras 61'. The symbol, as already stated is a small rectangle with a flame and the words 'Indo-French' super added. The symbol by itself cannot be said to be intended to indicate a connection in the course of trade between medicine and the respondent. Further it is so insignificant in appearance compared to the over all size of the label that an ordinary prudent and reasonable man is not likely to draw any connection between the respondent and the medicine in the course of the trade.

6. The learned Standing Counsel drew our attention to two decisions of this Court, one in W.A. 23 of 1964 (The Collector of Central Excise, Madras v. A. P. Basava Prabhu, Proprietor Messrs T. C. Nagalingappa & Co., Madras) and the other in W.P. 1477 of 1966 (V. Susheela v. The Assistant Collector of Central Excise, Integrated Division, Madras). The preparation that was the subject-matter of consideration before the Bench in W.A. No. 23 of 1964 was Eucalyptus oil. In that case, the bottle marketed by Messrs Nagalingappa & Co. contained besides the words 'Nilgiri Thailam', in Tamil, the photograph, signature and name or initials or the Manufacturing Company. These features were taken by the learned Judges to be distinctive features, and by these distinctive features, a connection was sought to be established in the course of trade between the company and the Eucalyptus oil. We are of the view that the facts of the case with which the Bench were concerned were entirely different. In the view of the presence of the photograph, signature and name or the initials of the manufacturer, the learned Judges, we may say so with respect, came to the right conclusion that the manufacturer used a distinctive mark or symbol to connect the medicinal preparations with the company in the course of the trade.

7. In W.P. No. 1477 of 1966, the learned Judge was again concerned with Eucalyptus oil. In that case, the manufacturer bottled the product and put it in cardboard cartons. The cartons contained a picture of a child with the following particulars among others - 'Vintone oil of Eucalyptus (I.P.) for cold, headache, and pains - repacked - Dentone Chemical Works, No. 13 Kondichetti Street, Madras-I'. It also contained an indication that it was a medicine or 'Cushadam' for curing cold, headache, and pains. In the light of these facts, the learned Judge followed the decision in Writ App. No. 23 of 1964 and held that the product was liable to excise duty. We are of the opinion that the facts before the learned Judge were entirely different from the facts in this case.

8. To conclude, we agree with the learned single Judge that the symbol used by the respondent cannot be said to be distinctive enough to attract item 14-E read with Explanation 1 of the First Schedule to the Central Excises and Salt Act. It is also admitted that the said symbol or mark is not the registered trade mark of the respondent. It is equally admitted that this mark is being used by the respondent in respect of all their preparations. There is absolutely nothing in the mark to indicate a connection in the course of trade between the medicine and the respondent. We therefore confirm the order of the learned single Judge and dismiss the appeal. There will, however, be no order as to costs.


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