pharmacy

1. Medicinal & Toilet Preparation (Excise Duties)
Act, 1955 And Rules There Under 1976 .
Prepared By:
Ms. Chevale S. L.
Assistant professor,
VDF school of pharmacy,
Latur, Maharashtra (India).

2. Introduction:
 Alcohol may be used for manufacture of medicines & toilet
preparations.
 For this purpose alcohol obtained at lower rate than required for
drinking ordinary alcoholic beverages.
 That’s why may be misused for drinking purpose.
 Therefore it is necessary to control issue & transport of alcohol.
 Previously each state had its own rules but in present Act prescribes
uniform rules for whole country regarding duty leviable on such
preparation. 2

3. Object:
 It provides for levy & collection of duties of excise
on medicinal & toilet preparations containing alcohol,
opium, Indian hemp, or other narcotic drugs & narcotics.
(An excise or excise taxis an inland tax)
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4. Definition 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 preparations
specified in the schedule as being subject to the duties of excise levied
under this Act.
Medicinal Preparation: It includes the drugs used as a remedy or
prescription prepared for internal or external use of human being or
animals and all substances intended to be used for or in treatment,
mitigation or prevention of disease in human being or animals.
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5. Toilet Preparation: The preparation intended to be used in the toilet of
human body or in perfuming apparel of any description, or any
substances intended to cleanse, improve or alter the complexion, skin,
hair or teeth, and includes deodorants and perfumes.
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6. Manufacture: Includes any process incidental or ancillary to the completion of the
manufacture of any dutiable goods.
Narcotic drug or narcotic: A substance other than alcohol which when swallowed
or inhaled by or injected into, human being induce drowsiness, sleep, stupefaction
or insensibility in the human being.
Opium means :
i) Capsule of poppy, whether in their original form or cut, crushed or powdered
& whether or not juice has been extracted their from.
ii) The spontaneously coagulated juice of such capsule which has not been
submitted to any manipulations other than those necessary for packing &
transport; and
iii) Any mixture with or without neutral materials, of any of the above forms of
opium.
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7. Definition under the Rules:
Bonded Manufactory: It 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: It 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.
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8. Spirit Store: It is the part of the bonded
or non-bonded manufactory used for
the storage of alcohol, opium, Indian
hemp, and other narcotic drugs or
narcotics purchased free of duty or at
prescribed rates of duty specified in the
Schedule to the Act.
Denatured Spirit or Denatured alcohol: It means alcohol of any strength
which has been rendered unfit for human consumption by the addition of
substances approved by the central Govt. or by the State Govt. with the
approval of the Central Govt.
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9. Restricted preparation: These are medicinal preparations which are
considered as capable of being misused as ordinary alcoholic beverages.
Unrestricted preparation: These are medicinal preparations which are
considered to be not capable of being misused as ordinary alcoholic
beverages.
Substandard preparation: It includes:
a) A pharmacopoeial preparation in which the amount of any of the
various ingredient is below the minimum i.e. requirement.
b) A proprietary medicine, not conforming to the formula displayed on
the label.
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10. Manufacture:
 Source of rectified spirit: Distillery or warehouse of the state.
 Loss of rectified spirit: wastage in transit duty payable by excise
commissioner.
 Permission of state government is necessary to claim the concessions.
There are two modes of manufacture of medicinal and toilet preparation
containing alcohol,
1) Manufacture in bond; and
2) Manufacture outside bond
In first case, alcohol on which duty has not been paid shall be used under the
excise supervision and in the case of manufacture outside bond, only the
alcohol on which duty has already been paid shall be used.
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11. • For the manufacture of medicinal & toilet preparation containing
alcohol and narcotic substances
• From excise commissioner (manufacture in bond)
• From the officer as the state government (manufacture outside
bond)
• Applied in prescribed form & fee, 2 month before manufacture.
• Such application contain following particulars:
• 1) Name and address of applicant, If applicant is a firm then
name and address of partners, If applicant is a company then
name address of directors, managers and managing agents and
reg. no. of company.
• 2) Name and address of, Place/site of the bonded or non bonded
laboratory is situated.
• 3) Amount of capital proposed.
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Licensingprocedure:

12. 11) In case of firm, true copy of partnership deed.
10) Site and elevation plant of laboratory building.
9) The kind & number of licences held by applicant under Drug & Cosmetic Act 1940.
8) List of all preparations, that licence proposes to manufacture showing:
7) Statement indicating requirement of the that excise officer required full time or part time.
6) Maximum quantity of alcohol remain at one time in the form of finished and unfinished preparations, max quantity of Indian
hemp, opium and other narcotic drug & their content in finished & unfinished products,
5) Number and full description of vats, stills and other apparatus and machinery.
4) Approx. date to start the manufacture
Continue……
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13. 12. In case of company, list of directors managers, copies of memorandum of
association, articles of association and latest balance sheet.
On receiving application licensing authority verify:
• Qualification and experience of technical staff.
• Equipments
• Suitability of proposed building.
• Soundness of applicant financial position
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14. Bonded laboratory or Bonded manufactory:
Ideal requirements:
• Spirit store.
• Room for manufacturing of medicinal preparations.
• Room for storage of finished medicinal preparations.
• Room for manufacturing and storage of Toilet preparations.
• Accommodations for excise officer with furniture.
• Every room bear board indicating name of room & serial number.
• Proper connection of all pipes to general drainage of lab.
• Arrangement of gas & electric connections.
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15. Continue……
9. Arrangement of windows of lab wit malleable iron rods & netting of mesh
> 25 mm
10. Only one entrance & one door to each compartments which were secured
with excise tickets locks, no alteration in the bonded lab. Without previous
order of Excise commissioner.
11. All vessels should bear distinctive serial number & full capacity & excise
ticket lock.
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16. Obtaining the
spirit:
Obtained by indent in
prescribed form singed by
officer-in-charge of
laboratory from spirit store
/ distillery.
Verification and
storage of
received spirit:
After receivingg verified in
volume & strength, entered
in the register & stored in
spirit room.
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17. 17
Storage of finished product.:
Stored in bulk in jars & bottles of capacity NLT 2,273 ml. along with alcoholic
content per lit & strength & date of storage.
Preparation ready for issue filled in containers of capacity NLT 57 ml
Every container should labeled & it contain: name of preparation, batch no.,
alcohol strength & manufacturer name.
Arranged on rack in such a way can be easily identified.
Permission of excise commissioner is required for storage of finished
preparation upto 3 years or more than that.
Issue of alcoholic preparations from bonded laboratory:
Licensee should applied in prescribed form to officer-in-charge after checking he
releases the required quantity.

18. Manufacturing Outside Bond (Non-bonded Manufactory) :
The manufacturing and sale operations are restricted only between sunrise
and sunset and days and hours as fixed by the Excise Commissioner.
Essential requirements of Manufactory are:
• Separate portion from other portions in lab.
• Separate laboratory spirit store and finished store.
• Only one entrance to non-bonded manufactory and one door each to
laboratory, spirit store and finished store.
• The windows should have malleable iron bars of specific dimensions &
wire netting which is not exceeding 25 mm in diameter.
• A separate spirit store for rectified spirit purchased at the specified duty.
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19. Continue……
vi. All pipes from wash basins and sinks are connected to closed drainage forming
part of general drainage system.
vii. All electric and gas connections should be well secured with one cut off switch.
The State Government may relax conditions of requirements of infrastructure if alcohol
consumption is less than 500 lit. per year.
Alcohol is procured by the manufacturer after payment of excise duty.
The form for payment of duty is filled up in triplicate, one copy is to be given to spirit
warehouse keeper, second to officer in charge and third to be retained by the licensee.
The duty for alcohol purchased is to be paid to Government treasury and challan
enclosed.
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20. 20
Obtaining The Rectified Spirit-Duty Paid:
Obtained by indent along with treasury challan in prescribed form to the
officer-in-charge of spirit store / distillery.
Cost of rectified spirit paid to spirit store keeper.
Manufacture And Storage Of The Preparation:
Manufacture carried out at only licensed premises.
Each preparation registered and given distinctive batch no. & transferred to
finished store.

21. 21
1. Hospitals & Dispensaries under
government
2. Charitable hospitals &
dispensaries of under local
bodies.
3. Medical store of t government.
4.Any institution certified by district
medical officer supplying
medicines to poor people.
Exemption From
Duty:

22. 22
Classification Of Medicinal & Toilet
Preparation Congaing Alcohol:
1. Allopathic preparation
a) Official Allopathic
preparations.
b) Unofficial Allopathic
preparation.
2. Homeopathic preparation.
3. Ayurvedic preparation.
a) Restricted preparations.
b) Unrestricted preparations.

23. 23
Warehousing Of Alcoholic Preparations:
Manufactures & dealers are allowed to establish bonded warehouse
any place in India.
Apply in prescribed form & fee to the excise commissioner of the
state.
Surety & security checked by EC to pay duty on goods to another
warehouse.
Transportation of all such goods to the warehouses is permitted by
officer-in-charge.
Before entry in warehouse all goods are weighed & assessed to
duty & recorded in register.
Goods not removed from any warehouse without paying duty except
to other warehouse or export.
Goods deposited for 3 years of more in warehouse.

24. 24
Export Of
Medicinal &
Toilet
Preparations
(Alcoholic
Preparation)
There are of two types
Duty paid goods:
Claim for rebate of duty
Owner gives notice of 48 to officer to observe goods to be
exported.
Chemical examination of goods for alcoholic content apply in
duplicate to EC.
Details on packet- name & address of consignee, total qn of
packet wit goods wt & description also alcoholic content.
Officer in charge seal packages & return duplicate to consignee.
Goods without payment of duty:
For bonded warehouse, application in triplet, statement of type of
transport.
Goods marked by ink or oil like sr. no. owner name, sp mark & qn.
Details on packet- name & address of consignee, total qn of packet
wit goods wt & description also alcoholic content.
1. Interstate movement
2.Movement from one warehouse to another

25. 25
Entry Search & Seizure:
Officers authorized by E.C. free access to premises, equipment, stocks, acc.
Of manufactures of dutiable goods.
Excise officer of state stop & detain any person carrying dutiable goods
without permit & necessary document.
 he has power as like sub-inspector to stop seize any container, vessel & also
rooms of manufactory 0r storage for dutiable goods wit respect to criminal
procedure code.

26. 26
Offences & Penalties:
For contravention of provisions of the Act or evasion of excise duties or failure to
supply required information, the punishment is imprisonment for six months with
or without fine.
• The court may order seizure of dutiable goods and handing it over to the
Government.
• The owner of the land should inform the magistrate, excise officer or police or
land revenue officer of any illegal manufacturing taking place in his/her place,
otherwise, he/she is liable for imprisonment upto six months with or without fine.
• Any officer without reasonable ground detaining the goods with an intention of
harassment or torture may be fined upto rupees two thousand.

27. 27
• Any officer who refuses to perform duties unless he has obtained permission to
withdraw shall be punishable with three months imprisonment with or without
fine.
• The Central Government may order that from a specified date no person shall
engage in production of dutiable goods or part there of.
• Any officer authorized by the Excise Commissioner shall have free access at all
reasonable times to any licensed premises for thorough inspection.
• If obstructed to discharge of duties of the officer, there is provision for penalty of
rupees five hundred.
• Any authorized excise officer may arrest any person whom he/she has reason to
believe that the person has violated provisions of the Act and is liable to be
punished under this Act.