MAC LABO RA TORIES (P) LTD. v. COLLECTOR OF CENTRAL EXCISE, BOMBAY NOVEMBER 22, 1994 [R.M. SAHAI AND N.P. SINGH, JJ.] Central Excise Rules, 1944-Rule 8 (1)-Notification No. l 16169-CE dated 3.5.1969 as amended by Notification No. 106180-CE dated 19.6.1980-Word
'Parenteral use'-Meaning and scope-Whether Kemicetine Vaginal Suppositories, a patent and proprietary medicine which C contained antiniotic Chloramphenicol was 'Chloramphenicol and its esters for oral and parenteral use',-Held, Yes, therefore, entitled for total. exemption.
The appellant is a manufacturer of Kemicetine Vaginal Sup- positories, a patent and proprietary medicine which contained the D antiniotic chloramphenicol. These suppositories are introduced in the vagina
by hand. Its wax-like material containing antiniotic chloramphenicol melts at the temperature of the vagina and the melted medicine then gets absorbed into the system through the epitheliums or mucous preparation lining the vagina. The administration of this medicine is not against any topical or local infection but is directed at E the internal infection of vagina resulting from the oral functional system. By absorption into the system its effect is to remove the vaginal infection. It is primarily used to cure vaginal discharge resulting from oral functioning of the system. It acts as oral antibiotic. The appellant was being granted exemption on the suppositories F till notices were issued raising demand. The basis for the notices for short levy of excise duty was that the medicine produced ·by the appellant was neither for oral nor pa~enteral use. It was claimed that 'Kemicetine Vaginal Suppositories' were treated by the Drug Control Authorities as life saving drug. And the produce was classified by the G department for concessional rate of duty at 2-1/l % ad-valorem since it was specified at serial No. 14 of the Schedule. But after the drug became wholly exempt from duty the department erroneously bas taken the view that the medicine which was in tablet form and was meant for parenteral use was not entitled to exemption since it was not administered through oral route. It was administered through oral H c
route. It was claimed that the word 'parenteral' was very wide and it could not be confined to use of injections only. The Assistant Collector confirmed all five notices and the order was maintained by the appellate authority. In further appeal, the Customs, Excise and Gold (Control) Appellate Tribunal also held against the appellant, not agreeing with the claims of the appellant that any medicine which is not administered through mouth would be parenteral. The Tribunal found that 'parenteral' refers to introduction of a medicine by route other than alimentary canal. It also held that parenteral administration of medicine refers to method that involved absorption into the body Iluids and system of the drug by active therapeutic effect. It further held that even though the Drug Control Authority had classified the medicine other than parenteral it was covered in the notification. However, it rejected the claim of the appel- lant.
This appeal has been filed against tht order of the Tribunal. The question for consideration is, whether Kemicetine Vaginal Suppositories which contained the antiniotic chloramphenicol was 'chloramphenicol and its esters for oral and parenteral use within the meaning of the Notification No. 116/69-CE dated 3.5.1969 as amended by the Notification No. 106/80-CE dated 19.6.1980 issued in exercise of powers conferred by sub-rule (1) of rule 8 of Ce~tral Excise Rules, 1944.
Allowing the appeal, this Court HELD 1.1 The ambit of the word 'parenteral' is very wide. Its use in the Notification No. 116/69-CE as amended by the Notification No. 106/80-CE dated 19.6.1980 issued in exercise of powers conferred by sub-rule (1) of rule 8 of Central Excise Rules, 1944, has been in still under sense. The use of the word 'oral' for 'enteral' and 'parenteral' for injections in the Notification is not without purpose. Enteral administration of medicine may be sublingual, that is, 'absorption of drugs by oral mucous membrane producing systemic effects' or oral, one of the most popular routes of administering drugs in the form of tablets, capsules, mixtures, powder, pills, emulsion or rectal of local or topical, that is, the administration · of drugs for systemic actions specially in vomiting, unconsciousness and when intestinal absorption is to be avoided. (630 E, 624 C, 630 E, F)
MAC LABO RA TORIES v. COLLECTOR C. EXCISE 1.2 The Government even though it was aware of the word 'enter- al' decided to use the word 'oral' in the Notification obvinusly so that there may not be any ambiguity. In technical sense sublingual administration may be different from oral but in the common and popular sense a medicine taken sublingually is as much oral as a tablet or capsule or mixture taken by a patient. Similarly, the word 'parenteral' was technically understood for injections whether they are B intra muscular, intravenous or intra-dermal. But in the larger sense it has come to include even inhalers as, 'gaseous and volatile drugs may be inhaled and absorbed through the pulmonary epitheliums and mucous membranes of the respiratory tract.' This widening of the ambit of word 'parenteral' was overlooked by the Tribunal. It was swayed by hyper-technical use of the medicine. Even assuming that it was used to C remove local infection or inflammation it could not be denied that it entered the blood stream. It, therefore, satisfied the broad test of entering the blood stream directly and by-passing the alimentary canal. (630 G, H, 631 A, B)
1.3 The two words 'oral' and 'parenteral' in fact appear to have D been used to extend the benefit to all the medicines produced by the use of chloramphenicol. Reading the Notification narrow!y or technically ;tS has been done by the Tribunal, may result in denying the benefits to those medicines which are produced by use of CAF but used locally. There can be no rationale for it. The Notification the construction of which is involved is an exemption notification. Therefore, the benefit of E it is available only to those who fall under it. To that extent, the notification has to be construed strictly. That is the medicine must be for oral or enteral use. But once it is found that a medicine falls in the category of parenteral medicine then the benefit cannot be denied because it falls in category of those medicines which are applied locally. Topical or medicines used for local absorption appeared to be included F in the word 'parenteral'. In fact, there are only two classifications of the medicines-one, which are known as enteral, that is, which passed through alimentary canal and other parenteral which extends to all other medicines which are not enteral. The subsequent classification of the medicines used locally for convenience cannot take it away from the main and the broader classification of it being parenteral. (631 C, D-E) G CIVIL APPELLATE JURISDICTION: Civil Appeal No. 958of1985.
From the Judgment and other dated 23rd Aug. 1984 of the Custom's and Gold Control Appellate Tribunal, Delhi in Appeal No. ED (SR) A.No 969/83-II. Vimal Dave, Mrs. Neelam Kalra and Lakh Raj for the Appellant. c
Gouri Shanker Murti, S.D. Sharma and V.K. Verma for the Respon- dent. The Judgment of the Court was delivered by R.M. SABAi, J. Whether Kemicetine Vaginal Suppositories (KVS), a patent and proprietory medicine which
contained the antiniotic chloramphenicol (CAF) was 'chloramphenicol and its esters for oral and parenteral use' with in the meaning of Notification No. 116/69 -CE dated 3.5.1969 as amended by tl:e Notification No. 106/80-CE dated 19.6.1980 issued in exercise of powers conferred by sub-rule (1) of rule 8 of Central Excise Rules, 1944 was answered against the appellant by Customs, Excise and Gold (Control) Appellant Tribunal.
The appellant is a manufacturer ofKVS of two different strengths.viz., 0.25 grams and 0.50 grams of chloramphenical antibiotic contents. These suppositories are introduced in the Vagina by hand. Its wax like material containing antiniotic chloramphenicol melts at the temperature of the Vagina and the melted medicine then gets absorbed into the system through the epitheliums or mucous preparation lining the Vagina. The adminis- tration of this medicine is not against any topical or local infection but is directed at the internal infection of Vagina resulting from the oral functional system. By absorption into the system its effect is to remove the vaginal infection. It is primarily used to cure vaginal discharge resulting from oral functioning of the system. It acts like oral antibiotic. The appellant was being granted exemption on the suppositories by the department till five notices were issued on 11th June 1980, 17th June 1980, 9th October 1980, 24th January 1981 and 8th May 1981 raising demand for the period 1st September 1979 to 31st May 1980, 1st January 1979 to 31st August 1979, 1st June 1980 to 31st August 1980, 1st September 1980 to 31st December 1980 and 1st January 1981to30th Appl 1981 respectively. The basis for the notices for short levy was that the medicine produced by the appellant was neither for oral nor parenteral use. In reply it was claimed that, Kemicetine Vaginal Suppositories were treated by the Drug Control authorities as life saving drug. And the produce was classified by the department for confessional rate of duty at 2-112% ad valorem since it was specified at serial no. 14 of the Schedule. But after the drug became wholly exempt from duty the department erroneously has taken the view thal the medicine which was in tablet form and was. meant for parenteral use was not entitled to exemption since it was not administered through oral route. It MAC LABORATORIES v. COLLECTOR C. EXCISE [SAHAI, J.]
was claimed that the word 'parenteral' was very wide and it could not be A confined to use of injections only. The appellant objected to notices so far they were for period beyond six months prior to the date of notice. The Assistant Collector did not find any merit in the objection raised by the appellant and confirmed all the five notices issued by the Superintendent, Central Excise. The order was maintained by the appellate authority. In further appeal to the Tribunal it was not disputed that the medicine B manufactured by the appellant contained chloramphenicol. Nor there was any dispute that in terms of pharmacology parenteral is understood to refer to such medication as is applied in such a manner that it by-passes the ali- mentary canal which has its opening point in the mouth and ends in the anus. The dispute centered round whether use of suppositories through vagina was parenteral use .. The Tribunal after examining affidavits filed on C behalf of both the parties, the text books and various dictionaries and papers on this subject found 'pru-enteral refers to introduction of a medicine by route other than alimentary canal. The Tribunal further held that there were · three methods of administering drugs and medicines one by putting it in mouth and swallowing it; second, by injecting either intramuscularly or intravenously; and third by local application on surface of the body and its D absorption. The Tribunal did not agree with the claim of the appellant that any medicine which is not administered through mouth would be paren- teral. The Tribunal found parenteral administration of medicine refers to method thatinvolved absorption into the body fluids and system of the drug by active therapeutic· effect. It further held that even through the Drug Control Authority had classified the medicine other than parenteral it was E covered in the Notification. However, it rejected the claim of appellant. But it allowed the appeal in part and confined the demand notice to six months before the date of notice.
Notification No.116/69-CE dated 3rd May 1969 was issued in exercise F of powers conferred by sub-rule ( 1) of Rule 8 of the Central Excise Rules, 1944 exempting patent or propritory medicines falling under item 14 of the 1st Schedule of the Central Excises and Salt Act, 1944 (Act l of 1944) and containing one or more oftlie ingredients specified in the Schedule annexed from so such of the duty of excise livable thereon as was in excess of 2- 112% advalorem. In the Schedule serial no.14 read as under: "14. Chloramphenicol and its esters for oral and parenteral use;"
On 19th June 1980 column 2 of the Schedule was amended and the amended entry provided that in the said notification for the words and H figures, 'that from so such of the duty of excise leviable thereon as is in excess of 2-112% ad 'valorem the words, 'from the whole of the duty of excise leviable thereon' shall be substituted. Therefore any patent or proprietory medicine if it fell in item No.14 of the Schedule it became wholly exempt from payment of duty.
For exemption two conditions were required to be satisfied – one, that the patent and proprietory medicine should have been produced out of one or more ingredients specified in the Schedule and that it should have been for oral and parenteral use. Since the ingredient used in production of KVS was chloramphenicol it satisfied the first requirement as provided in the notification of being a patent or a proprietory medicine in manufacture of which one of the ingredients as specified in the Schedule was used. But that alone was not sufficient for exemption as it was further required to satisfy that the medicine was for oral and parenteral use. The appellant did not claim that KVS manufactured by it could be used orally. Therefore, the only question that arises for consideration is whether it was· for parenteral use or not.
as, In Pharmaceutical Handbook edited by A. Wade 'Parenteral' is defined "Not by way of the alimentary tract; administered by a route other than that of the alimentary tract." The Faber Medicine Dictionary explains the word as,
"Outside the intestinal tract; relating to administration of a substance by a way other than that of the alimentary. tract, e.g. by subcutaneous, intramuscular or intravenous injection."
In Black'~ Medical Dictionary by William A.R. Thomson the word is defined as, as, "administration of drugs by any route other than by the mouth or by the bowel." Churchill Livingstone's Pocket Medical Dictionar1 de~med the word "Not via the alimentary tract."
Lewis's Pharmacology by James Crossland explains 'parenteral administration' as under: MAC LABORATORIES v. COLLECTOR C. EXCISE [SAHAI, J.] "The tenn parenteral administration (par-beyond, enteral- A intestinal) implies that the drug is given by a route which takes it directly into the body fluids, by passing the
preliminary process of transport through the intestinal wall or pulmonary alveoli which is necessary when drugs are ingested, inhales or placed in the rectum. With all fonns of parenteral administration, sterile precautions are necessary.'' B In Remington's Pharmaceutical Sciences it is stated as under : "The term parenteral (GK, para enter on= beside the intes- tine) refers to the route of administration of drugs by
injection under or through one or more layers of skin or C mucous membrane." In the same chapter while discussing administration of parenteral preparations it was observed, "drugs can· be administered parenterally when they cannot D be given orally because of the unconscious or unco-
operative state of the patient, or because of inactivation or lack of absorption in the intestinal tract." The author while discussing parenteral products has observed t'tat parenteral preparations could be divided in three factors-one, drug pellet E absorption; two solution absorption; and three, parenteral dispersion absorption. It is explained in 'the Basis of Pharmacology, Second Ed. by Avram Goldstein, Lewis Aronow and Summer M. Kalman' as under: "The possible routes of drug entry into the body may be
divided into two classes – enteral and parenteral. In enteral F administration the drug is placed directly in the gastrointestinal tract by placing it under the tongue (sub lingual), by swallowing it (oral), or by rectal
administration. In parenteral administration the gestrontestinal tract is by-passed. There are many parenteral G routes. The commonest are subcutaneous (s.c.), intramuscular (i.m.), and intravascular: but drugs may also be applied to the skin or injected intradermally, for local effect or to be absorbed percutaneously: they may be
inhaled for direct action on the bronchial tree or to be absorbed into blood at the alveoli: they may be injected into H c .E or near the spinal canal: they may be introduced intravaginally".
[Emphasis supplied] The Tribunal itself found that from the definitions in different dictionaries it was apparent that parenteral refers to introducl:ion of medicines by route other than the alimentary tracts. It further observed, "There can be no doubt whatever from these paragraphs
which have been relied upon the appellant that when speak of vaginal drug delivery by which the drug is absorbed, the drug spoken of is a systemically active steroids hormone, and is said to be effectively absorbed through the vaginal mucosa: The drug being a hormone, its effects will depend
on its systematic absorption, although the administration of the progesterone was by means of a suppository. This route appears to have been explored because progesterone was found to be orally inactive. Even for the contraceptive, the article described the advantage of the continuous infusion when the vaginal route is used, as it can prevent the
possibility of systemic toxicity that can result from the surging and ebbing plasma drug levels. The systemic absorption and action of the drug is beyond doubt. In other words, the
paragraph describes a systemic drug administration through the route of the vagina." Yet it rejected the claim of the appellant as, "none of the authorities who have been presented before us speak of the intravaginal route of administrations parenteral except when the administration is meant to be a systemic
administration, the drug or medicine being systemically absorbed, and penetrates into the body lymph blood or tissues in a more or less complete manner. Whatever the area of application, the aim is the same – to cause the drug to penetrate into the body system, thereto act and to be
physiologically taken up and become integral with the system in such a manner that after a lapse of a period upon the speed and degree of penetration/absorption, rejection whether voluntarily or involuntarily becomes impossible."
MAC LABORATORIES v. COLLECTOR C. EXCISE [SAHAI, J.] The Tribunal did not disbelieve that suppositories were used even for A curing typhoid. But it held that a close study of the material produced before it indicated that CAF are used to treat,
"local infections and inflammations of female genital tract. The absorption aimed at is clearly a local absorption of the drug for the purpose of combating and eradicating B trichomoniasis not only in the mucosa but also in the extra vaginal lacunae to eradicate inflammation and infection;
and it needs to be understood that there is no need, for the drug to operate effectively, to penetrate and be absorbed systemically, because, as we have seen, the infections are all local in the vulva, vagina and cervix region. The paper C indeed does not suggest anywhere that one for the treatment of these maladies, there is any need for systemic absorption of the drug. The reason for this is obvious. The target areas are all superficial – that is – not jnside the system but outside the internal body system, although in a protected/covered
cavity or orifice. Mis Mac Laboratories have not shown any D evidence to satisfy us and to convinc~ us that their Kemicetine vaginal suppositories are parenteral in their activity is to combat infecting organism which lie on the
surface of the body system itself." Medicines used through vaginal route could, thus, be parenteral if its E administration according to Tribunal was for systemic absorption. But since KVS produced by the appellant was for local absorption it could not be held to be parenteral. Whether it approach of the Tribunal is correct or not but this appears to be certain that the word 'Parenteral' is wide enough as bronchial inhalers have come to be included in it even though it is neither F taken orally nor it is injected nor it is meant for local use. In Goodman and Gilman's
The Pharmacological Basis of Therapeutics, 'Topical Application' extends to, drugs applied to the mucous membranes of the conjunctival, nasopharynx, oropharynx, vagina, colon, urethra, and urinary bladder primarily for their local effects. Occasionally, as in the application of antidiuretic hormone to the nasal mucosa, systemic absorption is the G goal. Absorption through mucous membranes occurs readily. Similarly medicines taken through vaginal route meant for systemic absorption are included in it. Therefore, the word 'parenteral' is not confined to the injections. Yet the question is whether suppositories produced by the appellant which on the finding of the Tribunal are used for local absorption can be held to be included in it. The word 'parenteral' is not confined to H c
[1994] SUPP. S S.C.R · injections. But does it include medicines used for local application. For determining this it is necessary once again to understand the distinction between 'enteral' and 'parenteral'. In other words what is the basis on which this classification has been made. Each medicine whether it is taken orally or injected in the body or applied locally enters the blood stream to be effective and efficacious. In enteral administration 'the drugs are absorbed from the small intestine'. Whereas the medicine injected in the body reaches in the blood stream directly. The medicine applied locally or tropically too enters the blood stream through mucou~ membrane or skin. The range of topical application is very wide. But the basic characteristic is that the medicine applied through this method enters the blood stream directly even though slowly. The basis characteristic of administration of drug parenterally is thus satisfied. That is why the parenteral is described by various writers as every medicine which by-passes alimentary canal. Since the medicine either injected by needle or applied locally enter the blood stream directly it was classified as parenteral by Avram Goldstien extracted earlier.
Till now the discussion has been about understanding of the word in Pharmacology;..But the Courts are concerned, primarily, how the Notification granting exemption should be construed and what was the intention in using the w~rd parenteral in the Notification. The exemption claimed by the appellant was refused as the suppositories produced by the appellant were for local absorption. It has been explained that the ambit of the word 'parenteral' is very wide. Its use in the Notification has been in still wider sense. The use of the word 'oral' for 'enteral' and 'parenteral' for injections in the Notification is not without purpose. Enteral administration of medicine may be sublingual, that is, 'absorption of drugs by oral mucous membrane producing systemic effects' or oral, 'one of the most popular, routes of administering drugs in the form of tablets, capsules, mixture, powder, pills, emulsions or rectal' or'local or topical, that is, the administration of drug for systemic actions specially in vomiting, unconsciousness and when intestinal absorption is to be avoided. The Government even though it was aware of the word 'enteral' decided to use the word 'oral' in the Notification obviously so that there may not be any ambiguity. In technical sense sublingual administration may be different from oral but in the common and popular sense a medicine taken sublingually is as much oral as a tablet or capsule or mixture taken by a patient. Similarly the word 'parenteral' was technically understood for injections whether they are intramuscular, intravenous or intra-dermal. But in the larger sense it has come to include even inhalers as, gaseous and volatile drugs may be inhaled and absorbed through the pulmonary MAC LABORATORIES v. COLLECTOR C. EXCISE [SAHAI, J.]
epitheliums and mucous membranes of the respiratory tract' (Goodman and A Gilman). This widening of the ambit of word 'parenteral' was overlooked by the Tribunal.It was swayed by hyper-technical use of the medicine. Even assuming that it was used to remove local infection or inflammation it could not be denied that it entered the blood stream. It, therefore, satisfied the broad test of entering the blood stream directly and by-passing the alimentary canal. The two words 'oral' and 'parenteral' in fact appear to B have been used to extend the benefit to all the medicines produced by the use of chloramphenicol. Reading the notification narrowly or technically as has been done by the Tribunal, may result in denying the benefits to those medicines which are produced by use of CAF but are used locally. There can be no rationale for it. For instance a medicine produced for bilingual use cannot be denied exemption because the word 'orally' is confined C technically to tablets and mixtures. Similarly exempting tablets and injections but excluding ointments would not be harmonious reading. It would result in narrowing down and curtailment of the ambit of the· notification. The Notification the construction of which is involved is an exemption notification. Therefore, the benefit of it is available to only those who fall under it. To that extent the Notification has to be construed strictly. D That is the medicine must be for oral or parenteral use. But once it is found that a medicine falls in the category of parenteral medicine then the benefit cannot be ~enied because it falls in category of those medicines which are applied locally. Topical or medicines used for local absorption appear to be included in the word 'parenteral'. In fact the definitions which have been E extracted earlier do support the claim of the appellant that there are only two classifications of the medicines – one, which are known as enteral, that is which passed through an alimentary canal and other parenteral which extends to all other medicines which are not enteral. The subsequent classi- fication of the medicines used locally for convenience cannot take it away from the main and the broader classification of it being parenteral. In the result this appeal succeeds and is allowed. The question raised by the appellant is decided by saying that the suppositories produced by the appellant were covered in the Notification No. I 06/80-CE dated 19th June 1980 and, therefore, were entitled for total exemption. There shall be no order as to costs.
A.G. Appeal allowed.