Pharma Jury Notes ppt.

1. THE MEDICINAL AND TOILET
PREPARATION ( EXCISE DUTIES )ACT

2. - Alcohol signifies an euphoric drink & still used for
drinking purpose.
- Alcohol has a different uses such as manufacture of
medicines and toilet preparations (perfumes).
- Alcohol possesses excellent solvent properties
besides its preservative effect & hence it founds a
important position in mfg . of drugs and medicines.
- Prior to the enactment of this act the control of
spirituous medicinal preparations was a state subject
& each state has a different set of rules ( different
excise duties for the same item in different states).

3. - Which leading to the interstate smuggling of such
preparations.
- The M AND TP ACT was passed in 1955 and the rules
were passed in 1956 to provide for collection of levy and
collection of duties of excise on M and T preparations
containing alcohol & narcotic drugs .
- Some important definitions:

4. Alcohol: means ethyl alcohol of any strength and purity
having chemical composition C2H5OH.
Dutiable goods: means medicinal and toilet preparations
specified in the schedule as being subject to the duties
of excise levied under the act.
Medicinal preparations: includes all the drugs which are
a remedy or prescription prepared for internal or
external use of human being or animals and all
substance intended to be used for or in the treatment ,
mitigation or prevention of diseases in human being or
animals.

5. Toilet preparations: Means any preparations which is
intended for use in the toilet of the human body
Or in perfuming apparel of any description ,
Or any substance intended to cleanse ,
improve or alter the complexion , skin, hair or teeth
and includes deodorants and perfumes.
Absolute alcohol: means alcohol conforming to the
British pharmacopoeial standards for dehydrated
alcohol.
Bonded manufactory( laboratory): means premises
approved and licensed for the manufacture and
storage of medicinal and toilet preparations
containing alcohol , opium ,Indian hemp or other
narcotic drug on which duty has not been paid.

6. Non – bonded manufactory: (laboratory) – means
premises approved and licensed for the manufacture
and storage of medicinal and toilet preparations
containing alcohol , opium , hemp . And narcotic
drugs on which duty has been paid .
Restricted preparations: means every medicinal and
toilet preparations specified in the schedule and
includes every preparations declared by the central
government as restricted preparations.
Spirit store: means that portion of the bonded or non
bonded laboratory which is set a part for the storage
of alcohol , opium , Indian hemp and other narcotic
drugs.

7. Provision of the act
1. Licensing procedure :
- Alcoholic & narcotic preparations can be
manufactured only under the authority of a license.
- Such licence is issued only if the requisite licence
for the mfg. of drug under the drug and cosmetic
act has been first obtained.
- Licence is obtained from excise commissioner of
the concerned state on application in the prescribed
form with the prescribed fees & at least two
months before the proposed date of the
commencement of the production.

8. Details to be furnished:
1. Name / address of the applicant
2. place/site on which bonded laboratory is proposed
to be built.
3. If the applicant be a firm , the name/ address of the
partner
4. If it be a company , its registered name/address,
names/addresses of its directors , managers and
managing agents.
5. Amount of capital proposed to be invest
6. The number and full description of vatts , stills and
other apparatus and machinery

9. 7. Maximum quantity of alcohol at any one time to
remain in the form of finished and unfinished
preparations.
8. The approximate date to start the production
9. Statement whether the laboratory will require a whole
time or part time excise officer
10.List of preparations stating the percentage of alcohol
contained and licence held under the drugs and
cosmetic act – 1940.
11.Site and elevation plan of laboratory building . If
quarters for excise staff are to be provided , their plan
also submitted.

10. 12.In case of a firm , a copy of partnership –deed and in
case of company –
- List of directors
- Copies of memorandum of association
- Article of association
- Latest balance sheet
On receipt of application the licensing authority may
enquire into –
1. The qualification and experience of technical staff
2.The equipments.
3.Suitability of the proposed building
4.Soundness of the applicant’s financial position

11. - If the conditions are fulfilled excise commissioner
issues the licence in the prescribed form.
Note: To obtain a licence to mfg. alcoholic preparations
either in bond OR outside bond , the form of
application and other conditions are same.
But there is a difference in payment of
fees as follows:

12. Manufacture in bond Manufacture outside bond
If consumption of alcohol is
to be less than 4000 litres per
year Rs.100
If consumption of alcohol is to
be125 litre per year Rs.10.
If consumption of alcohol is
to be 4000 litre or more per
year Rs.200.
If consumption of alcohol is126-
499litres per year Rs. 25.
For Ayurvedic or Unani
medicines containing self
generated alcohol or
containing alcohol produced
by distillation Rs. 25.
If consumption of alcohol is 500
litre or more per year Rs.200.
For Ayurvedic or Unani
medicines containing self
generated alcohol or containing
alcohol produced by distillation
Rs. 25.

13. - The licence can not be sold or transferred.
- Where a licensee sells or transfers his business to
another person , the purchaser or the transferee has to
obtain a fresh licence but residue of the period
covered by the licence it is issued free of cost.
- A licensee can enter into a partnership after obtaining
the prior sanction of the licensing authority.
- If a partnership is dissolved , every partner is required
to send a report of dissolution to the licensing
authority within ten days.

14. - If licensee desire to transfer his business to new
premises , he can do so by informing the licensing
authority at least fifteen days in advance , specify the
address of the new premises .
- A licence can be revoked or suspended by the
licensing authority if the licensee or any other person
in his employment - found to be breach of the
prescribed condition or any of the provision of the
act or rules
Or has been convicted of an offence under
section 161with section 109 or with section 161of the
Indian panel code 1860.

15. - The licence remain valid for a period of one year and
should be renewed after.
- The application for renewal – submitted at least one
month before the commencement of the year to which
it relates.
- The licensee – required to provide a visit book paged
and stamped by any officer empowered by the excise
commissioner in this behalf in which visiting officer –
record any remark when inspecting the licensed
premises.
- All invoices , cash memoranda , permits and other
documents relating to the consignments received by the
licensee – to be preserved for a year after the year to
which they relate.

16. Manufacture
- For the mfg. of M and TP preparations , rectified spirit
can be obtained from a distillery or a spirit warehouse of
the state or outside state.
- Manufacture of alcoholic preparations is permitted in
bond without payment of duty as well outside bond with
payment of duty.

17. Modes of manufacture
- Incase of manufacture in bond , alcohol ( on which
duty has not been paid) is to be used under excise
supervision of the officer in charge.
A. Manufacture in bond
B. Manufacture outside the bond

18. A. Manufacture in bond :
- Rectified spirit without previous payment of duty is
issued for this purpose only if the manufacturer
enters into a bond with sufficient security towards
the due payment of duty and conditions of the rules.
- There should be only to each of its compartment.
one entrance to the bonded manufactory and one
door to each of its compartments.
- All the doors – secured with excise ticket lock
during the absence of the officer in charge.
- Bonded laboratory should make provision for the
following.

19. 1.One spirit store unless the manufactory is attached to
a distillery or a spirit warehouse.
2.At least one large room for mfg. medicinal
preparations & separate arrangement for manufacture
of toilet preparations.
3.Rooms for storage of medicinal preparations &
storage for finished toilet preparations.
4. A board on which the name of the room & serial
number on the outside of every such room in the
manufactory.
5. All pipes from sinks or wash basin inside
manufactory premises discharging into drains
forming part of the general discharge system of the
premises.

20. 6.Accomodation with necessary furniture for the officer
in charge in the bonded premises.
7.The arrangement of gas & electrical connections
within the licensed premises – such that their supply
being cut off and all the regulators or switches being
securely locked at the end of the day’s work.
8. Every window in the bonded laboratory – provided
with malleable iron rods of prescribed dimensions &
the window - covered on the inside with strong wire
netting of mesh not exceeding 25 mm.

21. - No alteration in bonded premises – made without the
previous permission of the excise commissioner.
-The permanent vessel for the storage of alcohol ,
narcotic drugs received under bond & all the finish
preparations on which duty has not been paid –
secured with excise ticket locks.
- The permanent vessel intended to hold the alcohol &
liquid preparations – gauged by the officer in charge.
- They should bear a distinctive serial number & their
full capacity distinctly & indelibly marked on them.

22. - Tables – computed to show the contents of each
vessel at an inch & one tenth of an inch of the depth
of each vessel.
Manufacture of alcoholic preparations:
Procurement of rectified spirit:
- Rectified spirit required for the mfg. of M and T
preparations – obtained on an indent in the prescribed
form , counter signed by officer in charge.

23. - The distiller issues the spirit on receipt of the
duplicate copy of the indent.
- Spirit issued in duly sealed container with advice of
the consignment to the officer in charge.
- There should be no wastage in its transit from
distillery to bonded laboratory.
- If there is a loss due to negligence or connivance of
the manufacturer , manufacturer has to pay the duty.
if Excise commissioner is satisfied he may waive the
duty.

24. Verification and storage of received spirit:
- The excise officer in charge verifies the spirit in volume
and strength & amount entered in a register maintained for
the purpose.
- After verification spirit - stored in a spirit store.
Issue of spirit from spirit store to manufacturer:
- Spirit issue from time to time to the manufacturer from
store according to his requirement.
- Manufacture – calculate the quantity of spirit & hand over
the requisition to the officer in charge.
- Before requisition , manufacturer must keep ready all
ingredients of the preparations , with which the spirit to be
mixed.

25. - Manufacture – mix spirit in the presence of officer in
charge.
- The vessel intended for alcohol charged , a label
should showing the following:
- Name and batch number of the preparation
- Description & quantity of the alcohol added
- Date of the removal of preparation & quantity of
preparation.
- As soon as preparation is manufactured, it – removed
to the finished goods store where account for in a
register.

26. - On completion of a medical & toilet preparation , the
licensee must be permitted to take free samples or such
quantities as the officer in charge considers necessary
for analysis & declaration of the strength of alcohol &
medicaments.
- Any quantity left over the analysis should be
immediately returned to bonded manufactory & mix
with the main bulk of the batch before it is measured &
store.
- Quantity used by the licensee should be accounted
separately.

27. - All the entries in the stock register relating to the
batches of the finished preparations - initiated by the
officer in charge.
- He can take a two sample from each batch , each
NMT 150 ml of which one may be sent to the
chemical examiner.
- Duplicate sample - kept under excise ticket lock.
- After the report of the chemical examiner duplicate
sample - returned to the finished goods store.
- The duplicate sample however not returned to the
finished good store if the chemical examiner declares
the strength of the preparation not up to the standard

28. , Unless the excise commissioner permits
standardization of such sub standard preparation; &
also if the preparation – declared to be a spurious
preparation under the rules.
- All the sample required for the analysis – supply free
of cost by the licensee & all expenses in connection
with packing & dispatch of the samples should be
borne by him.
- Sample may taken at any time & sent to the chemical
examiner for analysis & check.

29. Storage of finished products:
- All finished products – stored in bulk in jar / bottles of
capacity NLT 2.25 liters.
- Every containers should bear a labeled with –
- Name of the preparation
- Batch number
- Alcoholic strength
- Name of the manufacture.
- In addition , the label of each bulk container of a
preparation indicate the actual content in gallons& date
of storage.

30. - The containers – arranged in a suitable racks as to allow
ready identification of each batch.
- A record of all the deficiencies in the bulk content of the
finished preparations – kept by the officer in charge &
reported to the excise commissioner quarterly.
- If the excise commissioner satisfied that the
deficiencies reported - due to natural or unavoidable
reasons and that the alcoholic preparations has not gone
to consumption, he may remit the duty payable.
- Other wise such loss is subject to levy of duty at penal
rate which should NMT double the prescribed rates.

31. Issues of alcoholic preparations from the bonded
laboratory:
- Alcoholic preparations from a bonded laboratory –
taken out by manufacturer by making an application to
the excise officer in the prescribed form after paying
duty on it.
- The excise officer after checking the entries & realizing
the duty payable , allow the required quantities to be
removed after issuing a permit.
- When ready for issue , preparations – distributed in
container NLT 50 ml.

32. - Preparations issued to bonded warehouse or for export
or to institutions entitled to receive duty free
preparations, issued without payment of duty.
- Instead of paying duty on every consignment ,
manufacture – deposit an advance sum to the credit of
the collecting government & every time goods issued
& corresponding duty shall be debited.
- Licensee should also deliver to the officer in charge ,by
5th of each months ,a return of transaction of business .
- Supervisory staff for a bonded laboratory decided by
the excise commissioner in consultation with licensee.

33. - Dutiable goods can not be delivered from a bonded
manufactory or a bonded warehouse before 6 a.m.
and after 6 p.m. & not any hour on Sundays or other
holidays.
Deficiencies in finished store:
- A record of deficiencies in bulk content of any
finished product in store - maintained by the officer in
charge.
- A report of all such deficiencies submitted to the
excise commissioner every quarterly.
- In absence of satisfactory explanation , all such loss

34. Subject to levy of duty at penal rates which shall not
be more than double the prescribed rates.
Disposal of sub standard preparations:
- A finished medicinal or toilet preparation suspected
to deteriorated in quality - destroyed by the
manufacturer with the permission of excise
commissioner .
- The excise commissioner may allow a manufacturer
to reprocess a sub – standard preparation.

35. - The excise commissioner -waive the duty on
alcoholic content of the preparation so destroyed,
if he satisfied that the deterioration of his
preparation or its improper manufacture was due to
reasons beyond the control of the licensee.
Disposal of recovered alcohol:
- An account of recovered alcohol shall be maintained
by in the prescribed form.
- Recovered alcohol declared by the licensee to be unfit
for the consumption shall be destroyed by him in the
presence of officer in charge.

36. - No rebate of duty shall be allowed on recovered
alcohol so destroyed.
Wastage in manufacture:
- Central government , from time to time fix the
permissible percentage of loss in the manufacture.
- Manufacturer - liable on to pay the duty on the excess
loss with penalty.

37. - If the alcoholic strength of a preparation found to
exceed the allowable limit , its issue from the
laboratory shall be withheld.
- Excise commissioner may allow the licensee to adjust
the alcoholic strength or the medicaments or the
ingredients of the preparations are not impaired in
any way.

38. Remission of duty in case of loss due to accident:
- In case o any accidental loss of alcohol in a bonded
manufactory due to the reason beyond the control of
licensee , the duty on the alcohol so lost shall be
remitted with the approval of excise commissioner.
- In case of physician’s sample or beverages are
concerned , the act does not permit any rebate or
relaxation of taxability on preparations.

39. B. Manufacture outside the bond
- Manufacture & sale in a non bonded laboratory -
conducted between sunrise & sunset & such days
and hours fixed by the excise commissioner.
a. Non- bonded laboratory:
- The requirement of non bonded laboratory is
identical with bonded laboratory.
- A Spirit store , a laboratory, a finished store &
others provisions – same as in case of bonded
laboratory.

40. b. manufacture:
Government – relax all or any of provisions in case of
manufacturer whose annual consumption of alcohol
does not exceed 100 gallons
& also in case of those
who prepare preparations for dispensing to their
patient & not for sale.
1.Obtaining the spirit:
- Spirit – obtained from the distillery or spirit
warehouse.
- To get spirit – an indent prepared in triplicate.

41. - One copy to distiller or warehouse keeper, other to
the office in charge of the distiller/warehouse &
triplicate copy retained by the licensee.
- Manufacture - pay the duty & enclose the treasury
chalan along with indent .( duplicate copy)
- Treasury officer - send an advice to the excise officer
in charge of the distillery.
- If the excise officer in charge satisfied , he issue the
spirit together with permit.
- Spirit store in a spirit store.

42. 2. Manufacture , storage & sale:
- Mfg. Carried only in the licensed premises.
- Each preparation - registered & bear a batch number.
- All finished product transfer to the finished good
store from laboratory.
- Arranged of that the checking of stock of every batch
of preparation from the register facilitated.
- Quantities taken out from time to time , entered in the
stock card maintained for the purpose.

43. 3. sampling:
- without prior notice , excise officer take samples of
NLT 10% & NMT 15% of the total batch , at least
once every month.
- Sample forward to the chemical examiner.
- If the report of the chemical examiner differ from the
declared by the manufacturer, manufacturer liable to
penalty at a rate of 10 times the difference in duty on
the quantity so manufactured but not exceeding Rs.
2000.
- Frequently occurrence of such offence – result into a
cancellation of the license.

44. - Every sample – taken in duplicate & cork of each
bottle fixed with officers personal seal.
- Label of the sample – signed by the officer taking the
sample.
- Manufacturer can affix his seal & sign the labels.
- Duplicate sample preserved carefully under lock and
key & returned to the manufacture when no more
require.
4. Returns:
- Manufacturer – maintain up to date & proper account
& send it to the officer on 5 th of each month.

45. 5.Employees:
- Manufacturer inform the name of all employees
whose duties require in non bonded laboratory.
- Any change in the person – inform promptly to the
Excise commissioner.
- No other person – enter into the manufactory
premises without the special permission of the officer.
6.Inspection:
- Excise commissioner & other excise officer – allowed
to inspect non bonded laboratory.
- Inspect at least once in a month.

46. Manufacture Of Ayurvedic , Homeopathic And Patent &
Proprietary Preparations
A. Ayurvedic preparations:
- Asavas & Aristas – principal types of Ayurvedic
preparations which contain self generated alcohol.
- Ayurvedic preparations contain self generated alcohol
in which alcohol contain not exceed 2% proof spirit –
deemed to be non –alcoholic & hence exempted from
the payment of the excise duty.

47. - Preparations containing more than 2% alcohol but not
capable of consumption as ordinary alcoholic
beverages – also exempted from excise duty.
- Alcoholic preparations which can be consumed as a
alcoholic beverages – liable to a duty of Re 1 per liter.
- Ayurvedic practitioners of good standing – allowed to
manufacture & dispense such preparations free of duty
provided they take license & use preparations only for
their patients.
- The practitioner – allow the excise officer to take
samples .

48. - Practitioner – maintain the records of quantities
manufactured & dispensed , together with the name &
address of the patients.
- Ayurvedic preparations – made by distillation or to
which alcohol is added at any stage of manufacture –
treated ordinary alcohol beverages & hence liable to a
duty of Rs. 30 per litre.
Homeopathic preparations:
- All homeopathic preparations containing a alcohol –
classified as preparation capable of consumption as
ordinary alcoholic beverages & subjected to duties
prescribed for such class of preparations .

49. Patent & Proprietary Preparations
- All allopathic preparations – containing a alcohol
classified into two categories.
1. Official preparations – made strictly according to the
formula given in the current edition of B.P , I.P.,
U.S.P., N.F.(U.S.) , any other pharmacopoeia
recognized under the drugs & cosmetic act , 1940 by
the government of India .
2. Non official allopathic preparations - also known as
patent proprietary medicines - prepared according to
allopathic system of medicine & conform strictly to
the formula displayed on the label.

50. - Medicinal & toilet preparations capable of being
consumed as ordinary alcoholic beverages – referred
to as restricted preparations & enlisted in the
schedule.
- E.g. Aqua Anisi falls under the non pharmaceutical
preparations . Schedule not treat the preparations in
question as one capable of being consumed as an
ordinary alcohol beverages.
- All other std. preparations & proprietary preparations
not being capable of being consumed as referred to as
unrestricted preparations.
- Any of the restricted preparations , if misused widely

51. - declared to be restricted preparations by the
central government either on the request o the state
government or on its own & on the advice of the
standing committee.
- Any new patent preparations containing a alcohol put
in market , it will be deemed to be a restricted
preparations.
- Any manufacturer wants to manufacture a proprietary
preparation should submit two samples of the
preparations together with it’s formula to the state
government.
- State government declare whether the sample is to be
categorized as a restricted or an unrestricted
preparations.

52. - The standing committee consists of –
1.Drugs controller of India
2.Chief chemist , central revenues laboratory
3.One pharmacologist nominated by the central
government.
4.The adviser on indigenous system of medicine ,
ministry of health , family planning & urban
development.
- Committee – advise the central government on all
matters connected with the technical aspects of
administration of the Act and the rules .

53. Warehousing of alcoholic preparations
- Manufacture / dealer in alcoholic preparation –
allowed to establish warehouse anywhere in India to
store alcoholic preparations on which duty has not
paid.
- For establishing a private warehouse license required
– issued by excise commissioner on payment of fee
Rs. 25.
- Licensee required to furnish a bond with security.

54. Receipt and dealing with warehoused bond:
- Goods brought for warehousing – be produced to the
officer in charge with the transport permit
& should be weighed , gauged
in his presence & assessed to duty prior to entry in
the warehouse.
- The quantity & description of goods
- Number of packages
- Number & date of the permit &
- The amount of the duty leviable , should be noted in
the warehouse register.

55. - In the warehouse , these goods - kept separate from
other goods until the receipt has been taken by the
officer in charge.
- Warehouse owner – separate ,pack or repack the
goods & make necessary alterations therein for the
preservations, sale or disposal of such goods with the
sanction of the officer.
- No goods can be removed from any warehouse
except the payment of duty or for removal of any
other warehouse or for export & on presentation of a
written applications.
- Goods may be kept in warehouse for a maximum
period of 3 years from date of deposit.

56. - If any goods stored in warehouse – lost or destroyed
by unavoidable accident , the excise commissioner
remit the duty .
- Licensee responsible for the delivery & safe custody
of the alcoholic preparations.
Returns:
- Within the seven days licensee must submit details of
the transaction made in the warehoused goods &
other details prescribed by the state government .

57. Clearance on payment of duty:
- For removal of goods on payment of duty license –
make the application in triplicate to the officer in
charge at least twelve hours before he intends to
remove the goods.
- Officer then assesses the amount of duty leviable on
the goods , allows the goods to be cleared.

58. Export of alcoholic preparations
- Alcoholic preparations – exported from India duty
free.
- The exporter – present to the officer in charge or
proper officer an application in triplicate stating
whether the goods – exported by land , sea air or by
post parcel.
- The officer in charge sends the original copy of the
application to the customs officer or the border
examiner or the post master .

59. - The duplicate delivered to the consignor & the
triplicate retained as the office copy.
A. Export under bond:
- The person who have a bonded laboratory or a
bonded warehouse – export the preparations under
bond.
Procedure:
- When goods from a bonded warehouse exported ,
should be packed in cases or packages .
- Packages – labeled in ink or oil color with the
following particulars.
- Serial no.
- Owner’s name & special mark

60. - Total quantity of dutiable goods with alcoholic
contents in liters.
- After verifying the particulars entered in the
application , officer in charge – get the following
details noted on the body of each package.
- Name & address of the consignee.
- Description of the goods
- Total quantity of goods packed
- Alcoholic content of the goods in Liters.
- Gross weight of each package.
- Each package seal by the officer in charge in a manner
that the package – not tampered without the breaking
the seal.

61. - Officer in charge endorse the application , specify the
period within which the goods exported & return the
duplicate copy of the application to the exporter.
- If the goods – exported through post office , the
exporter present the duplicate copy of his application,
endorsed by the excise officer in charge to the post
master together with sealed goods.
- The post master – endorse the duplicate copy of the
application & return it to the exporter, who present to
the officer in charge.

62. Export after payment of duty
( export under claim for rebate of duty)
- The owner of the non bonded laboratory who wishes
to export – give 48 hours notice ( application) to
excise officer.
- Exporter – present the entire consignments to the
excise officer.
- Excise officer take the samples of goods and sends
them for analysis .( alcoholic strength)
- On the basis of the report excise officer – enter the
strength of the alcohol in the duplicate copy of
application.

63. - This duplicate copy required for the claim of rebate to
the excise commissioner.
- The package must be labeled with following
particulars:
1. Name / address of the consignee
2. Quantity & description of goods
3. Alcoholic content of the goods in L.P. liters.
4. Gross weight
- Excise officer seal each package with official seal &
make temper proof.
- For the rebate of the duty paid , exporter must claim ,
within the month of the issue of export certificate to
excise commissioner.

64. Interstate transport
- Alcoholic preparations moved from one state to the
another state after payment of duty.
- It can be transferred under bond from a bonded
warehouse in one state to a another state , without
payment of duty.
Failure to pay duty:
- If the person fail to pay the sum of the duty , the
authorized officer – detain such portion of goods .
- If the demand to pay the money – not discharged
within 10 days from the date of detention, the goods
so detained may be sold by public auction in such a
manner that s the excise commissioner – directed.

65. - The net proceed of the sales on the detained goods –
adjusted against the amount due under bond &
surplus if any , paid to the owner of he goods.