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Medicinal and Toilet Preparations Act, 1955 – Excise Duty Regulations on Alcohol-Based Products
- 1. Medicinal and Toilet PreparationAct – 1955 (Excise Duty)
- 2. Alcohol isan important industrial solvent excellent preservative, and a therapeutic agent. It is, however, likely to be misused and it could be a drug of addiction (euphoric drink). Before enactment of this Act, there was chaotic condition prevailing in the country in relation to price structure of alcohol as a raw material and formulations containing alcohol. Some states were rich in production of alcohol, while others were utilizing this as raw material in manufacture of formulations.
- 3. In theabsence of uniform excise policy, the price structure of alcohol containing medicines was varying from state to state within the country. In order to overcome this difficulty and to ensure that uniform structure of excise duty for alcohol products exists, this Act was enacted. It is an Act with provision for levy and collection of Excise duties on medicinal and toilet preparations containing alcohol, opium, Indian hemp (cannabis) or other narcotic drugs. The Act is effectively implemented throughout India from 15 April, 1957. The Act has11 Chapters and 21 Sections.
- 4. Narcotic: It meanscoca leaf and its derivatives or opium and its derivative or Indian hemp and any other substance capable of causing or producing in human being dependence, tolerance and withdrawal syndromes. Toilet Preparation: It means any preparation used in the toilet of the human body or in perfuming apparel of any description. It also covers substances used to cleanse, improve or alter the complexation, teeth, skin or hair and includes perfumes and Deodorants.
- 5. Absolute Alcohol: Itis alcohol conforming to the British Pharmacopoeial specification for dehydrated alcohol. Bonded Manufactory or Laboratory: It is the premises approved and licensed for manufacturing and storage of medicinal and toilet preparations containing alcohol, opium and Indian hemp and other narcotic drugs on which duty has not been paid. Non-Bonded Manufactory or Laboratory: It is the premises approved and licensed for manufacture and storage of preparations containing
- 6. Denatured Spirit orDenatured Alcohol: Means alcohol of any strength which has been rendered unfit for human consumption by addition of substances, approved by central government or by State Government with the approval of Central Government. Excise Commissioner: Head of the Excise Commission of a state and includes a Prohibition Commissioner or an officer designated in any state for the purpose. Finished Store: It is portion of non-bonded or bonded laboratory which is set apart for the storage of finished
- 7. MANUFACTURING IN BOND The license is issued from office of the Excise Commissioner of the State for alcohol. Application should be made two months in advance prior to date of manufacturing along with requisite fee as indicated. The application should include: 1. Name, Address and site of Bonded laboratory if it is a firm name and address of every partner of the firm; if it is a company, its registered name, address of the Managing Director. 2. Capital to be invested for bonded preparation. 3. Number and description of apparatus, machinery
- 8. 4. Approximate dateof starting manufacturing; requirement of excise officer, either whole time or part-time. 5. List of preparations containing alcohol; license number issued by Licensing Authority under DCA. 6. Elevation plan, plan of different rooms, details of doors and windows, and quarter: for excise staff are to be provided. 7. In case of firm, partnership deal and in case of companies, list of association and latest balanced sheet of the company. The Licensing Authority shall enquire into the purpose of manufacturing of such formulations containing
- 9. The LicensingAuthority shall also look into the equipment, requirement of alcohol and fix an amount of security. After satisfying all conditions, the Licensing Authority issues license for one year relating to the premises approved after inspection and for manufacturing of product containing alcohol or narcotic drug. Separate license is issued for each premises and the license is not transferable. The license issued should be displayed properly in the premises. Licensing Authority may amend or alter the conditions of license.
- 10. Renewal oflicense should be done before one month of expiry or else 25% extra fee is charged. Conviction of violation of provision of the Act is possible under sections 109 or 116 of Indian Penal Code. Before cancelling or suspending the license, sufficient opportunity is given to the licensee to explain his/her position. Structures of the Bonded Manufactory: A separate plain spirit store is required to be provided in the bonded premises. There should be only one entrance to the laboratory, only one door for each of its compartments, a separate room for manufacturing of medicinal preparations, one or more rooms for storage, a separate room for manufacturing of toilet preparations and their storage, and a room for excise officer incharge near the entrance with furniture.
- 11. The bondedlaboratory should be opened and closed in presence of excise officer incharge and secured with excise ticket locks. Every window in the bonded laboratory should be provided with iron rods not less than 19 mm in thickness set apart at a distance of not more than 102 mm. The iron rods should be embodied in brick construction to a depth of 51 mm at each end. The windows should be covered from inside with strong wire netting, the aperture of which should not exceed 25 mm in diameter. Each room in bonded laboratory should have a board indicating name and a serial number of the room and the purpose for which it is used, painted in oil colour. The pipes from sinks in the laboratory should be connected to closed drainage ultimately, forming part of general drainage
- 12. The gasand electric supply should be arranged in such a way that they are cut off at the end of day's work from one place. All the regulators or switches should be securely locked. Permanent vessels in bonded laboratory should bear the serial number and statement of full capacity of the vessel. The spirit should be obtained from the spirit warehouse approved by the Excise Commissioner. The indent should be sent in duplicate in prescribed form counter-signed by the officer in charge of the laboratory. Alcohol is issued in duly sealed containers and under intimation to the Excise Officer concerned. No wastage during transshipment is permissible and for any loss due to negligence of the manufacturer, excise duty has to be paid
- 13. Verification and Storageof Alcohol On its arrival in bonded laboratory, alcohol is measured in volume and strength. Entries are made in register and stored in spirit store room under excise lock with perfect coordination between excise officer incharge and officer of manufacturing unit. The alcohol is issued from spirit store from time to time in accordance with the procedure laid down under Rules. Issue of Alcohol from Store The manufacturer should calculate requirement of alcohol and hand it over to the excise officer. All ingredients should be kept ready and on receipt of alcohol, the solvent should be mixed immediately in presence of excise officer.
- 14. Up to200 ml from each batch is permitted to be withdrawn without payment of duty for determination of alcoholic strength of preparation. Any amount of preparation left after analysis should be returned and mixed with the main batch. All entries must be initialled by the excise officer incharge. The excise officer may also withdraw two samples from each batch (not more than 150 ml) for sending one sample to the chemical examiner and retaining other sample until the report is received. Bulk storage of preparations is done in jars or bottle of not less than 2.25 litres in volume. The container is labelled with batch number, content, strength of alcohol, etc.
- 15. Issue from BondedLaboratories The manufacturer makes application to excise officer and pays excise duty or it can be adjusted against any advance duty payed by him. Only on payment of calculated duty, the goods containing alcohol and narcotic drugs are permitted to be taken out of bonded laboratory by the excise officer. Exemptions: The preparations supplied to Government hospitals, dispensaries and charitable hospitals, and institutions which supply medicines to poor as certified by the district medical officer are exempted from payment of excise duties.
- 16. 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: 1) 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. 2) The iron bars in windows should be not less than 19 mm in thickness, set not more than 102 mm apart and fixed in brick construction to the depth of not less than diameter 51 mm. 3) A separate spirit store for rectified spirit purchased at the specified duty.
- 17. MANUFACTURING OUTSIDE BOND(Non-bonded Manufactory) 5) All electric and gas connections should be well secured with one cut-off switch. 6) The State Government may relax conditions of requirements of infrastructure if alcohol consumption is less. Alcohol is procured by the manufacturer after payment of excise duty. 7) 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. 8) The duty for alcohol purchased is to be paid to Government treasury and challan enclosed. Thereafter, the treasury officer sends an advice to officer incharge. Sealed containers are required to be used for procurement and storage of alcohol. The alcohol purchased cannot be resold.
- 18. Manufacturing, storageand sale of preparations should be carried out only in licensed premises. Batch number should be given and separate finished store is provided for alcoholic products. All necessary entries of operations carried out are maintained in stock register and the same should be made available for inspection by the excise officer and drug control authority. Excise officer may take upto 10% of the preparation for analysis and the same is sent to the chemical examiner. If the chemical examiner of government gives the report that alcohol content is more than what is claimed, the penalty charged is 10 times or maximum of Rs. 2000/- per batch. If this is frequently done by manufacturer, license may be
- 19. Returns: The manufacturershould maintain up to date and proper accounts of the transactions of business in his industry and deliver them to proper officer on the 5th of each month. Inspection: The non-bonded laboratory shall be open to inspection by the Excise Officer of the jurisdiction. It shall be inspected at least once in a month. The State Government may authorize inspection of a non- bonded establishment by any officer of prohibition, land revenue or medical and public health departments.
- 20. Ayurvedic Preparations andHomeopathic Preparations Ayurvedic preparations are of two types: Self-generated alcohol containing preparations like Asavas and Aristas. Prepared by distillation or addition of alcohol. Self generating preparation containing alcohol were earlier exempted from excise duty. However, now all such reparations are chargeable with 4% ad valorem excise duty. Those preparations with more than 2% self-generated alcohol and being capable of consumed as a beverage are charged duty of 4% ad valorem. Ayurvedic practitioners are exempted for license from excise
- 21. Penalties: For contraventionof 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 up to six months with or without fine. 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.
- 22. Penalties: Malicious informationimprisonment upto 2 years or with fine which may extend upto Rs. 2000 or both. Disorderly keeping of stocks and accounts to fine upto Rs. 2000. Sale of Dutiable goods (Except in prescribed containers bearing Labels ) to a fine which may extend upto Rs. 1000. Failure of Excise Officer to do duty — liable to imprisonment which may extend to 3 months or to a fine upto 3 months pay or both. Obstruction to officers and giving false information liable to a fine which may extend to Rs. 5000. Disclosure of information by Excise Officers: Liable to fine which may extend upto Rs. 1000.