This document summarizes the key aspects of the Medicinal and Toilet Preparation (excise duty) Act 1955 and Rules thereunder 1976 in India. It outlines the objectives of controlling alcohol use and ensuring uniform excise duties. Manufacturing can occur via bonded or non-bonded licenses, with strict rules for plant setup, record keeping, and excise officer oversight. Export of alcoholic medicines is allowed with duty rebates. Various offenses and penalties are also defined for non-compliance by licensees or officers.

1. Medicinal And Toilet Preparation
(excise duty) Act 1955 And Rules
Thereunder 1976
Prepared By : Priya D Yannawar

2. Content
 Introduction
 Objective
 Definitions
 Manufacture
 Licensing
 Export of alcoholic preparation
 Excise officer
 Offences and penalties

3. • Introduction
 Alcohol is an important solvent excellent preservative and therapeutic agent but it is misused and it could
be a drug of addiction
 Alcohol obtained at lower rate of duty may be misused for drinking purpose and hence it is necessary to
control the issue and transport of alcohol
 In the absence of uniform excise policy, the price structure of alcohol containing medicine was varying
from state to state within country. In order to overcome this difficulty and to ensure uniform structure of
excise duty for alcohol product this act is passed.
 These act providing legal binding on use of alcohol.
 This act is effectively implement in India from 15 april,1957
 Act has 11 chapter and 21 section.

4. • OBJECTIVE
 This act provide levy and collection of duties of excise on medicinal and toilet preparation
containing alcohol, opium, Indian hemp, or other narcotic drugs.
 To provide rules and provision to cover all types of preparation containing alcohol and
narcotic drugs.

5. • DEFINATIONS
 Definitions comes under the act
 Alcohol- alcohol means ethyl alcohol of any strength and purity having chemical
composition C2H5OH
 Dutiable goods- it includes the medicinal and toilet preparation specified in the schedule as
being subject to duties of excise levied under this act.
 Medicinal preparation- it includes the drugs used as remedy or prescription prepared for
internal or external use of human beings or animals.

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 Bonded manufactory :means the premises or any part of the premises approved and licensed
for the manufacture and storage of medicinal and toilet preparations containing alcohol, opium,
Indian hemp and other narcotic drugs or narcotics on which duty has not been paid;
 Non bonded manufactory; means the premises or any part of the premises approved and
licensed for the manufacture and storage of medicinal and toilet preparations containing
alcohol, opium Indian hemp and other narcotic drugs or narcotics on which duty has been paid;
 Denatured spirit or denatured alcohol: means alcohol of any strength which has been rendered
unfit for human consumption by the addition of substances approved by the Central
Government

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 spirit store- means that portion of the bonded or non-bonded manufactory which is set apart
for the storages of alcohol opium, Indian hemp and other narcotic drugs or narcotic purchased
free of duty or at prescribed rates of duty specified in the schedule to the Act;
 Restricted preparation: these are medicinal preparation which are considered as capable of
being misused as ordinary alcohol beverages.
 Unrestricted preparation; these are medicinal preparation which are considered to be not
capable of being misused as ordinary alcohol beverages.
 Substandard preparation; it includes,
 The pharmacopeia preparation in which amount of any of the various ingredient is below the
minimum.

8. • manufacture
 There are 2 modes of manufacture of medicinal and toilet preparation
containing alcohol,
 Manufacture in bond( use alcohol on which duty has not been paid)
 Manufacture outside bond( use alcohol on which duty has been already paid)
 It covers manufacturing of homeopathic, unani, and ayurvedic preparation
containing alcohol.

9. licensing
 Central government give notification in official gazette, they provide it at
specific date,
 no person shall engage in the production or manufacture of any dutiable goods
or other ingredient except under the authority and in accordance with the
terms and in accordance with the terms and conditions of license under this act.
 Every license shall be granted for specific area with the conditions and
restrictions.

10. • Conditions of license
 The license for alcoholic medicinal is given only when it is issued under drug and
cosmetic act ( DCA) and permission is taken by excise commissioner if the
formulation containing alcohol are being manufactured.
 The license on payment of specified fee can be obtained under particular
conditions for manufacture in bond and outside bond of medicinal and toilet
preparation, ayurvedic, homeopathic, unani medicine .

11. • Procedure for license
A. Manufacture in bond : from the excise commissioner
B. Manufacture outside bond: from the state government authorised officer.
1. The application of grant of license submit in prescribed manner with fee
2. And reach to licensing authority at least 2 months before the proposed date of
manufacture.

12. • Details in application:
1. Name and address of applicant
2. If application is firm then name and address of partner.
3. If application is for company then name and address of directors, managers, and managing agents and
registration no. of company.
4. Name and address of place and site of bonded / non bonded manufactory.
5. Amount of capital proposed to be invested.
6. Number and full description of vats, stills and other apparatus and machinery which the applicant
wishes to set up.
7. Approximate date of starting production.

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8. In case of bonded laboratory : statement is necessary indicating that excise officer required full
time or part time.
9. The kind and no. of license held by applicant as per DCA.
10. In case of firm, true copy of partnership deed.
11. In case of company, list of directors, managers, copies of memorandum of association and latest
balance sheet.
12. A list of all preparation, that the license proposes to manufacture showing,
13. % or proportion of alcohol in preparation containing alcohol
14. The quantity of opium, Indian hemp, or other narcotic drugs in terms of weight in preparation
containing these substance.

14. • Enquiries by licensing authorities
1. Qualification and experience of the technical persons.
2. The equipment in bonded/ non bonded laboratory.
3. Suitability of the proposed building for the establishment of a laboratory.
 After satisfying that the applicant is eligible for the issue of licence, the licensing
authorities shall issue a licence and approve plan of building is submitted along with the
application.

15. • bonded manufactory or manufacture in bond
 Without payment of duty, rectified spirit is issued with sufficient security and bond.
 Bonded laboratory ideal requirement.
1. Spirit store
2. Room for manufacturing of medicinal preparation
3. Rooms for storage of finished preparation
4. Room for manufacturing and storage of toilet preparation.
5. Every room in bonded laboratory should bear a board indicating the room and serial
number.

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6. Sinks and wash basin connected to the general drainage of laboratory
7. Gas and electric supply should be arranged so that they can be easily cut at end of the day.
8. Windows of the bonded lab should be made up of iron rods of prescribed dimension and
should covered inside with strong wire netting.
9. Only one entrance to bonded laboratory and one door to each of the compartment.
10. All the doors are secured with excise ticket locks in the absence of officer in charge.
11. No alteration in the bonded premises shall be made without excise commissioner permission.
12. All the vessels containing medicinal and toilet preparation on which duty has not been paid
should bear excise ticket locks.

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I. Obtaining the rectified spirit from warehouse
II. Verification and storage of spirit received
III. Issue of rectified spirit from store to manufacturer
IV. Storage of finished products
V. Issue of preparation from bonded lab

18. • Non bonded laboratory:
 Manufacture and sale should be conducted between sunrise and sunset only
 And only on those days and hours which is fixed by excise commissioner.
1. building arrangement
2. Obtaining the rectified spirit duty paid
3. Manufacture and storage of preparation.

19. 1.Buliding arrangement
1. Separate facility for spirit store, laboratory, and finished goods.
2. One entrance to each department
3. All the pipes from sinks and wash basins inside the laboratory should be connected with general
drainage
4. Arrangement of gas and electric supply should be connected with general drainage.
5. Separate spirit store for spirit purchased at different rates of duty.

20. 2.Obtaning the Rectified Spirit Duty Paid
1. Licensee should send the indent along with treasury challan ( evidence of duty payable) to the
officer in-charge of distillery.
2. The cost of such rectified spirit shall be paid by the licensee to the distillery.
3. After confirmation about correct amount is paid, officer incharge of distillery, order the issue
of rectified spirit required along with the permit covering the issue.
4. After making entry in proper register, obtained spirit transferred to the spirit store.

21. 3. Manufacture and storage of preparation
1. Manufacturing should be carried out in licensed premises only.
2. Registered each manufacturing preparation along with its batch.
3. Transferred finished preparation to the finished store and arrange so that they
can easily be checked from account register.
4. Finished product prepared from alcohol with different duties need to be stored
separately.
5. Bulk preparation should be transferred into the vessel of 28 ml capacity and
sealed.

22. • Exemption from duty
1. Government hospitals and dispensary
2. Charitable hospitals and dispensaries
3. Government medical stores
4. Institution certified by district medical officer supplying medicine free to poor.
5. Anything in public interest.

23. Classification of medicinal and toilet preparation
containing alcohol
Allopathic preparation homeopathic preparation Ayurveda preparation
Official preparation are made
according to official books
formulae like IP, BP,BPC, USP, NF
American, British and general
pharmacopoeia are used as
standard for this preparation.
1.Self generated alcohol containing
substance:
Ex. Asavas and arista's
2.sub.preapared by distillation or to which
alcohol is added at any stage of
manufacture.
Non official preparation are
made according to allopathic
system

24. Export of medicinal and toilet preparation ( alcoholic
preparation)
 No duty shall be paid on alcoholic preparation which are exported from India.
 It is of 2 types:
 Export of duty paid goods (non bonded) under claim of rebate of duty
 Export of non- duty paid goods.(under bond)

25. 1.Export of Duty Paid Goods
1. Should be export under claim of rebate of duty
2. Minimum 48 hours notice to be given to excise officer
3. Manufacturer should present the consignment to be exported to the concerning officer who send that
samples to the chemical examiner for analysis.
4. chemical examiner gives the report in duplicate
5. Based on alcoholic content excise duty rebated.

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 The officer incharge verify the application for following details
1. Name and address of consignee
2. Total quantity of goods packed
3. Description of the goods
4. Gross weight of each package
 After verifying the application the officer incharge:
1. Seal each pack with his official seal
2. Returns duplicate copy to consigner
3. On arrival of the goods at place of export, should be presented to customs collector for examination with
application

27. 2.Export of non duty paid goods:
1. The exporter should present an application in triplicate to excise officer in charge of the bonded laboratory
2. Mention the way of transport (by sea / air/ by parcel post)
3. Package should be marked with inks with particular serial number, owners names, alcoholic strength.
4. Officer incharge verify the application for details provided
5. Seal all packages with his official seal.
6. Then the packages then exported by same way as that of duty paid goods.

28. Power of excise officer:
 Inspection
 Entry, search and seizure
 Detention of person
 Notices
 Disposal of seized articles/ arrested persons
 Power of arrest
 Power of make rules

29. Duties of excise officer
1. Checking the qualification and experience of technical staff, equipment, suitability of building and applicants
financial position.
2. Visit premises at regular interval's
 Responsibility of excise officer
1. Correct collection of duty and penalty
2. Articles seized should be disposed speedily
3. Persons arrested should be forwarded without delay to excise officer

30. Offences and penalties
Offences Penalties
By licensee
Contravention of any of the provision
Failure to pay any duty of excise payable under this act
Failure to supply required information
Imprisonment: 6 month or fine rs.2000/- or both
Failure to furnish proof of export fine rs.2000/- extent to twice the amount of duty
Obstruction to the officer from performing his duty fine rs.500/-
Maintaining false accounts of stocks fine rs.2000/-
Illegal sale of dutiable goods fine rs.1000/-
Warehousing related offences Fine up to 2000/-

31. Offences and penalties
offences penalties
By excise officer
Discloser of information Fine up to 1000/-
Refusal to perform duties Imprisonment up to 3 months or fine up
to 3 month pay