Judgment :- This writ petition coming on for hearing on Wednesday the 3rd and 10th days of July 1963, Tuesday the 16th day of July 1963 and Tuesday the 23rd day of July, 1963 upon perusing the petition and the affidavit filed in support thereof the order of the High Court, dated 25-7-1962 and made herein, and counter and reply affidavits filed herein and the records relating to the levy and collection of the excise duty on Eucalyptus oil re packed and sold by the petitioner on the file of the respondent herein and comprised in the return of the Collector of Central Excise, Madras to the writ made by the High Court, and upon hearing the arguments of Mr. S.K.L. Ratan, advocate for the petitioner and of Mr. S. Mohan for the Additional Government Pleader, on behalf of the respondent and having stood over for consideration till this day, (the court made the following order :- The petitioner is the proprietor of the firm T. C. Nagalingappa and Company. He purchases eucalyptus oil in bulk and packs it in small and convenient bottles and sells them. He holds a licence under the Drugs Act. By the Finance Act (No. 2) of 1962 Item 14-E of the First Schedule, to the Central Excises and Salt Act, 1944 was amended as below : An explanation was inserted for the first time to this entry. He holds a licence under the Drugs Act. By the Finance Act (No. 2) of 1962 Item 14-E of the First Schedule, to the Central Excises and Salt Act, 1944 was amended as below : An explanation was inserted for the first time to this entry. It is in these terms : "Patent or proprietary medicines means any drug of medicinal preparation in whatever form, for use in the internal or external treatment of, or for the prevention of ailments in human beings or animals, which bears either on itself or on its container or both, a name which is not specified in a monograph, in a pharmacopoeia, Formulary or other publications notified in this behalf by the Central Government in the official Gazette, or which is a brand name, that is, a name or a registered trade mark under the Trade and Merchandise Marks Act, 1958 (43 of 1958), or any other mark such as symbol, monogram, label, signature or invented words or any writing which is used in relation to that medicine for the purpose of indicating or so as to indicate a connection in the course of trade between the medicine and some person having the right either as proprietor or otherwise to use the name or mark with or without any indication of the identity of that person." * 2.As stated, the petitioner bottles eucalyptus oil in small bottles and sells them in retail. The respondent, the Collector of Central Excise, in the belief that the eucalyptus oil so marketed by the petitioner comes within the purview of the above entry, called upon the petitioner to comply with the requirements of the Central Excises & Salt Act. This demand is resisted by the petitioner. According to him, eucalyptus oil sold by him is not sold under a brand name, nor is any mark, label or invented words used in relation to the oil for the purpose set out in the explanation. It is in fact denied that there is any possibility of any connection in the course of the trade between a person selling the oil and the eucalyptus oil sold, being established at all. The commodity in fact sells because it is eucalyptus oil and not for the reason that it is marketed by any particular person. It is in fact denied that there is any possibility of any connection in the course of the trade between a person selling the oil and the eucalyptus oil sold, being established at all. The commodity in fact sells because it is eucalyptus oil and not for the reason that it is marketed by any particular person. It is alleged that a common product like eucalyptus oil cannot acquire any special feature in the sense that is indicated in the explanation to the entry. It is urged that unless a patent or proprietary right can be claimed by any person, a commodity of this kind cannot be brought within the scope of the explanation. It is contended that the imposition of the duty is on goods manufactured or produced. According to the petitioner, he does not manufacture the eucalyptus oil, for he only buys it in bulk from persons who have already manufactured it. He attacks the validity of the provision in Section 2(f) of the Central Excises and Salt Act, which purports to include re-packing from bulk into retail packets as part of a process of manufacture liable to be brought within the dutiable category. 3.The Collector of Central Excise in his affidavit claims that the petitioner is a manufacturer with a Central Excise licence, which authorises him to pack eucalyptus oil. He relies upon the amended entry 14-E and the explanation thereto, as well as the amended definition of 'manufacture' in Section 2(f) of the Central Excises and Salt Act as justifying the action of the department. According to the counter-affidavit, eucalyptus oil is a medicinal preparation used for the treatment of human ailments. The petitioner has a licence under the Drugs Act as well. He markets the commodity in bottles, labels of which bear the manufacturer's name, brand name and signature label. From these, it is claimed that a connection in the course of trade between the medicine and the petitioner as proprietor or the manufacturer is established, and that these indicia serve to distinguish the petitioner's oil from that of others. It is claimed also that the amendment of Section 2(f) is fully within Entry 84 of List I in the seventh schedule and its validity cannot be attacked. In an additional counter-affidavit, it is urged that since the oil is produced in India, the duty becomes leviable the moment such production takes place. It is claimed also that the amendment of Section 2(f) is fully within Entry 84 of List I in the seventh schedule and its validity cannot be attacked. In an additional counter-affidavit, it is urged that since the oil is produced in India, the duty becomes leviable the moment such production takes place. It is contended that it is open to the Legislature to prescribe the point at which the excise duty shall become leviable depending upon the nature of the commodity and the process of manufacture carried out. It is urged therefore that the levy of excise duty at the point of packing or re-packing is fully justified even without resort to the amended definition of the term 'manufacture'. 4.There is no dispute that eucalyptus oil cannot possibly come within the scope of the main entry item 14-E for it is certainly not a patent or pro prietary medicine. The question is whether it would fall within the mischief of the explanation which purports to enlarge the content of the expression "patent or proprietary medicines" as ordinarily understood. I shall consider each part of this explanation. Eucalyptus oil can certainly be described as a drug or a medicinal preparation. In fact, the earlier part of the explanation which states that "patent or proprietary medicines" means "any drug or medicinal preparation in whatever form for use in internal or external treatment of or for prevention of ailments in human beings or animals" * , bears a close resemblance to the definition of 'drug' as it appears in the Drugs Act, 1940. But that is not sufficient for the purpose of bringing eucalyptus oil within the meaning of the explanation. It is only such drug or medicinal preparation as above described which is further qualified that can be brought within the explanation. It must be a drug or medicinal preparation which bears either on itself or its container or both a name which is not specified in a monograph in a Pharmacopoeia, Formulary or other publications notified in this behalf by the Central Government in the official Gazette. A notification was in fact issued by the Government of India on the 24th of April, 1962, in these terms : "In pursuance of the explanation to item 14-E of the First Schedule to the Central Excises and Salt Act, 1944 .... A notification was in fact issued by the Government of India on the 24th of April, 1962, in these terms : "In pursuance of the explanation to item 14-E of the First Schedule to the Central Excises and Salt Act, 1944 .... the Central Government hereby notifies all editions of the following pharmacopoeia, formularies and other publications for the purposes of the said explanations, namely." * 5.Then follows a list of such publications. It is again common ground that eucalyptus oil is in fact specified in one or other of these publications. It follows then that this part of the explanation also would not apply. Proceeding further with the explanation, the next part is "which bears either on itself or on its container or both a name which is a brand name, that is a name or a registered trade mark under the Trade and Merchandise Marks Act, 1958" * . The name `Eucalyptus oil' is certainly not a brand name of this category. The expression `brand name'is, it will be noticed, qualified to be "a name or a registered trade mark". It is not claimed that this name can be described in that manner. Proceeding further, the next part of the explanation is "which bears either on itself or its container or both - any other mark such as a symbol, monogram, label, signature or invented words, or any writing which is used in relation to that medicine for the purpose of indicating or so as to indicate a connection in the course of trade between the medicine and some person having the right either as proprietor or otherwise to use the name or mark with or without any indication of the identity of the person" * . The further question then is one of fact whether, the bottle in which the eucalyptus oil is contained or the container, if that should be taken to mean the external cardboard container, bears any other mark thereon. At this stage, I may state exactly what it is that the label contains. The label mentions the name of the petitioner "T.C. Nagalingappa & Co.' the quantity contained and the price. Below that are found the letters `T.C.N.' being the initials of the petitioner and the further words `pure eucalyptus oil'. At this stage, I may state exactly what it is that the label contains. The label mentions the name of the petitioner "T.C. Nagalingappa & Co.' the quantity contained and the price. Below that are found the letters `T.C.N.' being the initials of the petitioner and the further words `pure eucalyptus oil'. Across the cork, a strip of paper is pasted upon which again the name of the petitioner firm `T.C. Nagalingappa and Co.' is appended. In another bottle, virtually the same writings are found with slight differences. The words `Eucalyptus oil I.P.' (meaning Indian Pharmacopoeia) followed by the manufacturing licence of the petitioner are printed. The word `Nilagiri Thailam' in Tamil and other languages also appear. At the bottom, the name of the company and its address find place. The paper pasted over the cork is of the same description as on the other bottle. The question is whether any one or more of these words amount to a symbol, monogram, label, signature or invented words or any writing which is used in relation to that medicine. I find it difficult to convince myself that the mere name of eucalyptus oil or the name of the petitioner as the merchant marketing that commodity can be taken to mean that that writing is used in relation to that medicine. What the explanation further requires is that it should be so used in relation to that medicine for a specific purpose, the purpose being" * of indicating or so as to indicate a connection in the course of trade between the medicine and some person ". When the eucalyptus oil as produced by A, B or C is no different and can be no different from each other, does the use of dealer's name on the label establish a connection such as contemplated in the explanation? The connection should be one in the course of trade. It is not an ordinary specious connection. What is obviously required is that when the name of the dealer is mentioned, it should get associated with the commodity. To expand the idea, does it mean that if eucalyptus oil is mentioned, the name of T.C. Nagalingappa and Co., would spring to the mind of a person as one closely associated with the marketing of eucalyptus oil; or conversely, when the dealers name is mentioned, does it immediately draw one's attention to Eucalyptus oil. To expand the idea, does it mean that if eucalyptus oil is mentioned, the name of T.C. Nagalingappa and Co., would spring to the mind of a person as one closely associated with the marketing of eucalyptus oil; or conversely, when the dealers name is mentioned, does it immediately draw one's attention to Eucalyptus oil. What is required is that a connection in the course of trade between the medicine and the dealer should be established. It is true that there is a connection on the label; but that does not appear to be sufficient to lead to the inference that that connection exists in the course of trade. 6.The explanation does not stop there. The nature of the connection is further indicated in the following words :" * ..indicating or so as to indicate a connection in the course of trade between the medicine and some person having the right either as proprietor or otherwise to use the name or mark "What seems to be contemplated is that there should be a distinctive mark, name or symbol which has become associated with a particular dealer and the product in the course of trade, the right to use which mark has become as it were, the property of the person in question. Apart from the words 'eucalyptus oil' in which no person can by any stretch of imagination claim a proprietary right, or a right as a trade mark and the name of the dealer, that is, 'T.C. Nagalingappa & Co.' there does not appear to be any symbol, monogram, label, signature or invented words of the qualified nature set out in this explanation. 7.The next question is whether the name 'T. C. Nagalingappa and Co.' in running characters more or less in the form of a signature printed on a slip of a paper and pasted across the cork leads to the inference of the use of a signature. It may no doubt be called a signature. But even that signature must be of the nature indicated, that is to say, used in relation to the medicine indicating a connection between the medicine and the person in the course of trade. It seems to me that the explanation clearly required something more than the mere use of a signature pasted upon the bottle of medicine. But even that signature must be of the nature indicated, that is to say, used in relation to the medicine indicating a connection between the medicine and the person in the course of trade. It seems to me that the explanation clearly required something more than the mere use of a signature pasted upon the bottle of medicine. 8.On behalf of the department, reference has been made to the Budget Instruction of 1962, and what is styled as 'A note on some of the existing commodities in the case of which important changes have been made' has been produced before me. This note cannot obviously be relied upon for the purpose of interpreting a taxing provision. But it is nevertheless in structive as revealing how the department understood the changes in the law. The following extracts are useful :" * Item 14-E: The existing definition is linked with the provisions of the Drugs Act and is not considered fully adequate for carrying out the underlying intentions of the levy. Thus a large number of preparations such as 'Aspro', 'Cibazol' which are, in fact, proprietary preparations, are escaping the duty for the mere reason that they conform to a mono graph in an authorised Pharmacopoeia.....In order to remove this lacunae, the definition has been amended so as to make it "self-contained". Further on, after setting out the scope of the new definition, it is stated that any drug or medicinal preparation which is marketed containing any name or a trade mark, registered or not, by a symbol, monogram, in vented words or signature or other distinctive mark of the manufacturer'other than the mere name and address of the manufacturer'will be liable to duty. "In other words all non-pharmacopoeial preparations.... as well as pharmacopaeial preparations marketed under brand names or marks including manufacturers special marks, symbols, etc., have been made liable to duty." * If this Budget Instruction is any guide, it seems to me that it was not in tended to tax a preparation as the one I am concerned with which contains no special mark of the manufacturer but only his name and address. 9.On behalf of the respondents, the learned Addl. Government Pleader, purported to contend that the container by which he meant the card board carton, contains monogram. 9.On behalf of the respondents, the learned Addl. Government Pleader, purported to contend that the container by which he meant the card board carton, contains monogram. Now, the only monogram that I can find here are the initials 'T.C.N.' on the top and at the bottom of the packet. There is a picture of Mahatma Gandhi on one side and another picture, presumably of the dealer, on the other, which are contended may be regarded as symbols. Even conceding so much, the question nevertheless remains whether the use of these symbols and monograms is in relation to that medi cine for the purpose of establishing the necessary connection in the course of trade. I am unable to agree with this contention.10.The expression "for the purpose of indicating or so as to indicate a connection in the course of trade" * is taken from the Trade and Merchandise Marks Act, 1958 from the definition of 'trade mark'. Section 2(1)(v) of this Act defines 'trade mark' to mean "a registered trade mark or a mark used in relation to goods for the purpose of indicating or so as to indicate a con nection in the course of trade between the goods and some person having the right as proprietor to use the mark" * . Section 2(1) (v) (ii) also defines 'trade mark' in relation to certain other provisions of that Act to mean "a mark used or proposed to be used in relation to goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods and some person having the right either as proprietor or as registered user to use the marks, whether with or without any indication of the identity of that person" * . Having read these definitions as well as the explanation I fail to see how any mark can be said to be used at all on the medicine in question which will attract the explanation. The underlying implication is that in so far as any particular mark is concerned, the person using it has acquired a species of right therein or that the mark serves to establish a connection between the dealer and the goods. The function of the mark must be to indicate the trade origin of the goods. The underlying implication is that in so far as any particular mark is concerned, the person using it has acquired a species of right therein or that the mark serves to establish a connection between the dealer and the goods. The function of the mark must be to indicate the trade origin of the goods. The expression 'a connection in the course of trade' has been left undefined even in the Trade and Merchandise Marks Act. But it is clear that the service which the mark performs must be to enable a customer to identify the goods of a particular dealer from that of others. That result is not achieved in this case where only the name of the dealer is used. It follows that the explanation cannot apply.The petition is allowed. The rule is made absolute. There will however be no order as to costs.