Judgment Sankar Prasad Mitra, C.J. This is an appeal against a judgment of Sabyasachi Mukharji J., delivered on December 1, 1972 on an application under Article 226 of the Constitution. 2. The appellant is engaged in manufacture and sale of medical preparations containing alcohol. Two medicines which the appellant manufactures have been specially mentioned before us. One is "BISMOZYME"-a gastrointestinal regulariser and the other is "BROMO RAULFIN" for giving relief to patients suffering from hypertension. The formula of "Bismozyme" is as follows: "Contains in 5 ml. : Bismuth and Ammonium Citrate 80 mg. Aluminium Citrate 120 mg. Papain 20 mg. Tinct. Zingiberis Fort. 0.13 ml. Tinct. Belladonna 0.004 ml. Tinct. Nux Vomica 0.17 ml. O1. Anethi 0.004 ml. Alcohol 4% v/v." The formula of 'Bromo Raulfin' is : "Total extract 0.3 ml. Rauwolfia resin 1.00 mg. Alkaloids 1.65 mg. Additives Mist. Pot Brom. et Valeriana 3 ml. Ext. Trifala Liq. 0.3 ml." 3. The appellant contends that for the manufacture of these medicinal preparations it has to consume heavy quantities of alcohol in the form of rectified spirit which is used in different stages. In the primary stage the crushed medicinal herbs and other drugs are put in liquid alcohol to extract active principles present in these herbs. By this process the appellant gets Tincture Zingiberies Fort, Tincture Belladona and Tincture Nux Vomica which are used for preparation of 'Bismozyme'. By the same process extract of Rauwolfia, it is stated before us, is also obtained for manufacture of 'Bromo Raulfin. We are also told that the appellant uses spirit chloroform for its medicinal preparations which is similarly produced. According to the appellant the processes by which the above tinctures and extracts are produced are intermediate stages and the products so obtained are not "medicinal preparations" as defined in sub-s. (g) of S.2 of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. 4. Sub-section (g) of S. 2 of the said Act defines "medicinal preparations". It says: "'Medicinal preparation' includes all drugs which are a remedy or prescription prepared for internal or external use of human beings or animals and all substances intended to be used for or in the treatment, mitigation or prevention of desease in human beings or animals." 5. 4. Sub-section (g) of S. 2 of the said Act defines "medicinal preparations". It says: "'Medicinal preparation' includes all drugs which are a remedy or prescription prepared for internal or external use of human beings or animals and all substances intended to be used for or in the treatment, mitigation or prevention of desease in human beings or animals." 5. According to this definition, therefore, a medicinal preparation includes a drug which is used as a remedy or prescription prepared for external or internal use of human beings and animals for (a) the treatment, (b) the mitigation, and (c) the prevention, of a desease. 6. The appellant's case is that the products we have referred to above are added to and mixed up in solutions with other chemicals to make final medicinal preparations which are sold in the market under different proproprietory names. The appellant has been holding L-2 licence of the State Government and another L-1 licence for manufacture of medicinal preparations containing alcohol and stored in the bonded warehouse. 7. On the strength of these licences the appellant purchases rectified spirit from different distilleries and warehouses. The State Government has collected certain excise duties on "medicinal preparations" containing alcohol manufactured in the appellant's factory with the said alcohol. The appellant contends that the levy and realisation of these duties on these medicinal preparations are illegal and without any jurisdiction being contrary to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. 8. The main grievance of the appellant is that a sum of Rs.70,360.30 has been illegally realised from the appellant for intermediate products in violation of the said Act. The appellant's claim is for refund of this sum. 9. The appellant's second grievance is that for the purpose of propaganda and publicity of the medicinal preparations containing alcohol the same are distributed by salesmen free of cost. These do not have any market value, nor are these capable of being sold in the market. On this account the appellant has been forced to pay a total sum of Rs.16,150.80 up to the 28th March 1969. The appellant has asked for refund of this sum as well. 10. These do not have any market value, nor are these capable of being sold in the market. On this account the appellant has been forced to pay a total sum of Rs.16,150.80 up to the 28th March 1969. The appellant has asked for refund of this sum as well. 10. In this appeal, therefore, we have to consider two points, namely, (1) whether Tincture Zingiberis Fort., Tincture Belladona, Tincture Nux Vomica, Spirit Chloroform and Extract Rauwolfia Serpentina, which are used, by the appellant in the preparation of appellant's drugs and other proprietory medicines can be said to be "medicinal preparations' within the meaning of S. 2(g) of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 and (2) whether duty was payable on what the appellant described as 'physicians' sampales'. 11. Mr. Sanjay Bhattacharjee appearing for the appellant has drawn our attention principally to Ss. 2(g) and 3 of the Act. We have already noted the provisions of S. 2(g) of the Act. Section 3 is in the Chapter on "Levy and collection of duties". It provides as follows :- "3(1) There shall be levied duties of excise, at the rates specified in the Schedule, on all dutiable goods manufactured in India. (2) The duties aforesaid shall be leviable- (a) Where the dutiable goods are manufactured in bond, in the State in which such goods are released from a bonded warehouse for home consumption, whether such State is the State of manufacture or not; (b) Where the dutiable goods are not manufactured in bond, in the State in which such goods are manufactured. (3) Subject to the other provisions contained in this Act, the duties aforesaid shall be collected in such manner as may be prescribed. Explanation.-Dutiable goods are said to be manufactured in bond within the meaning of this section if they are allowed to be manufactured without payment of any duty of excise leviable under any law for the time being in force in respect of alcohol opium, Indian hemp or other narcotic drug or narcotic which is to be used as an ingredient in the manufacture of such goods". 12. Mr. Bhattacherjee has urged that one of the intermediate products we have mentioned above namely, Tincture Zingiberis, Tincture Nux Vomica Spirit Chloroform, Tincture Belladona or extract Rauwolfia Serpentina is a medicinal preparation as defined by S. 2(g) of the Act. 12. Mr. Bhattacherjee has urged that one of the intermediate products we have mentioned above namely, Tincture Zingiberis, Tincture Nux Vomica Spirit Chloroform, Tincture Belladona or extract Rauwolfia Serpentina is a medicinal preparation as defined by S. 2(g) of the Act. Until the appellant's drugs are finally made they are not medicines which can be prescribed either for treatment or for mitigation or for prevention of disease. The above alcoholic products as such are not medicines. They are ingredients of medicines which the appellant manufactures. 13. We have consulted quite a few authorities to find out whether the above products as such are or can be used for treatment, mitigation or prevention of disease. We have looked into the "British Pharmaceutical Code" 1949; Martindale - The Extra Pharmacopoeia, "26th Edition and "Pharmacology Materia Medica and Therapeutics" by Birendra Nath Ghosh, 16th Edition. We have also consulted the "Pharmacopoeia of India" First Edition published by the Ministry of Health, Government of India. We have found that each of the products abovementioned is a medicine or medicinal preparation for treatment, mitigation or prevention of disease. We will give only a few examples. In Ghose's book Tincture Zingiberis Fortis has been referred to at page 561 and Tinctura Zingiberis Mitis has been referred to amongst the official preparations. It is stated, inter alia, that this tincture is chiefly used as a stomachic, carminative and flavouring agent. The same statement appears in British Pharmaceutical Codex -1949 at page 960 Tinctura Zingiberis Fortis has been included as a drug in Pharmacopoeia of India at page 695. 14. Let us take Tincture Nux Vomica. In the British Pharmaceutical Codex 1949, it is stated at pages 555-556 that Tincture Nux Vomica internally acts as a bitter, reflexly increasing the gastric secretion and the appetite. There are similar observations in the other authorities we have referred to. Tincture Nux Vomica is also included in the Pharmacopoeia of India at page 690. 15. The third one is spirit chloroform. This is used both externally and internally. In Ghosh's book at page 148 we find that internally in diluted solution it has a warm sweetish taste and acts as a pleasant carminative and stomachic. There are similar observations in the other authorities. Spirit chloroform has been discussed in Pharmacopoeia of India at page 581. 16. The fourth one is Tincture Belladona. In Ghosh's book at page 148 we find that internally in diluted solution it has a warm sweetish taste and acts as a pleasant carminative and stomachic. There are similar observations in the other authorities. Spirit chloroform has been discussed in Pharmacopoeia of India at page 581. 16. The fourth one is Tincture Belladona. In Ghosh's book at page 246 it is inter alia, stated that to ms. of the tincture every four hours to young children may be prescribed for whooping cough and 30 to 40 ms. of the tincture everyone or two hours during an attack of renal colic; British Pharmaceutical Codex, 1949 says at page 136 that it acts as a powerful antispasmodic in intestinal colic and, given with purgatives, it allays griping, By relaxing the muscle of the bronchioles, it is valuable in relieving spasmodic asthma, and, being well tolerated by children, is given in appropriate full doses in the treatment of whooping cough. It is also used in the treatment of urinary incontinence and for the relief of spasm associated with biliary and renal colic. 17. More or less the same observations have been made in Martindale-The Extra Pharmacopoeia, 26th Edition at page 282. 18. The fifth item is Extract Rauwolfia Serpentina. In Ghosh's book we are told at page 730 that crude alcoholic extracts are also used to reduce blood pressure in hyperpiesis. Extract Rauwolfia Serpentina has been included in the pharmacopoeia of India at page 227. 19. From what we have stated above it is clear that recognised authorities have uniformly pointed out that Tincture Zingiberis, Tincture Nux Vomica, Spirit Chloroform, Tincture Belladona and Extract Rauwolfia Serpentina are all used as remedies either externally or internally for treatment, mitigation or prevention of diseases in human beings. We are, therefore, unable to accept the appellant's contention that these are merely ingredients and do not come within the definition of 'medicinal preparation in S. 2(g) of the said Act. The impositions of excise duty on these products do not appear to us to be unjustified and the objections of the appellant in this regard are overruled. 20. We would next deal with the question whether 'physicians' samples can be excluded from the operation of the Act. Mr. Bhattacharjee drew our attention to the schedule to the Act. Generally speaking the schedule imposes duty at a certain percentage on ad valorem basis. Mr. 20. We would next deal with the question whether 'physicians' samples can be excluded from the operation of the Act. Mr. Bhattacharjee drew our attention to the schedule to the Act. Generally speaking the schedule imposes duty at a certain percentage on ad valorem basis. Mr. Bhattacharjee submits to us that a 'physicians' sample' has no value. It has no price. No rate of duty can therefore be imposed on a 'physicians' sample'. Learned Counsel has told us that under the Finance Act of 1964 certain provisions of the Central Excise and Salt Act, 1944 have been adopted for the purposes of the Medicinal Toilet Preparations (Excise Duties) Act, 1955. He has also relied on a few decisions to which we shall presently refer. In A.K. Roy and another v. Voltas Limited, AIR 1973 SC 225 the court was considering S. 4 of the Central Excise and Salt Act, 1944. In paragraph 21 at page 230-31 it has been held that S. 4 of the Act provides that the real value should be found after deducting the selling cost and selling profit and that the real value can include only the manufacturing cost and the manufacturing profit. 21. Mr. Bhattachrrjee says that since a 'physicians' sample' is not sold at all there cannot be any question of manufacturing cost or manufacturing profit. 22 In Atic Industries Ltd. v. H.H. Dave, Asst. Collector of Central Excise & others, AIR 1975 SC 960 the Supreme Court has observed that in the usual course of business the wholesale cash price which a manufacturer charges in the wholesale dealer less trade discount represents this value of the goods for the purpose of assessment of excise. The value of the goods for the purpose of excise must take into account, says the Supreme Court, only the manufacturing cost and the manufacturing profit and it must not be loaded with post manufacturing profit arising from post-manufacturing operation. 23. Here again learned Counsel make the same comment; a 'physicians' sample' has no wholesale cash price and unless there is a sale the price or value cannot be determined. 24. The principles laid down in these two Supreme Court judgments have been followed in the certain other judgments of the Calcutta, Karnataka and Allahabad 'High Courts. 25. 23. Here again learned Counsel make the same comment; a 'physicians' sample' has no wholesale cash price and unless there is a sale the price or value cannot be determined. 24. The principles laid down in these two Supreme Court judgments have been followed in the certain other judgments of the Calcutta, Karnataka and Allahabad 'High Courts. 25. We are not concerned in the present appeal with determination of whole-sale price and the principles of determination thereof which arose before the Supreme Court. The point for our consideration is whether the State Excise Authorities on the facts and in the circumstances of this case, were justified in imposing excise duty on 'physicians' samples' which are distributed free. In Explanation II of the Schedule to the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 it is provided:- "Where any article is chargeable with duty at a rate dependent on the value of the article, such value shall be deemed to be the value as determined in accordance with the provisions of S. 4 of the Central Excise and Salt Act, 1944." 25. Let us quote the provisions of S. 4 of the Central Excise and Salt Act, 1944 which are as follows :- "4. Determination of value for the purposes of duty.-Where under this Act, any article is chargeable with duty at a rate dependent on the value of the article, such value be deemed to be – (a) the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or• production, or if a wholesale market does not exists for such article at such place, at the nearest place where such market exists, or (b) where such price is not ascertainable, the price at which an article of the like kind and quality is sold or is capable of being sold by the manufacturer or producer, or his agent, at the time of the removal of the article chargeable with duty from such factory or other premises for delivery at the place of manufacture or production or if such article is not sold or if not capable of being sold at such place, at any other place nearest thereto. Explanation.-In determining the price of any article under this section, no abatement or deduction shall be allowed except in respect of trade discount and the amount of duty payable at the time of the removal of the article chargeable with duty from the factory or other premises aforesaid." 26. In the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, there appears to be no provision at all which enables the State Excise Authorities to exempt 'physicians' samples' from excise duties. On the contrary, in the Central Excise Traiff, Item 14E sub-clause (6) there is some provision. Item 14E applies in "Patent or proprietary medicines not containing alcohol, opium, Indian hemp or other narcotics other than those medicines which are exclusively Ayurvedic, Unani, Sidha or Homoeopathic." Under sub-clause (6) of Item 14E an exemption is granted to "clinical samples issued by any manufacturer and limited to a quantity not exceeding five per cent by value of the total duty paid clearances during the preceding month of all types of patent or proprietary medicines and intended for free supply to Hospitals, Nursing Homes or Medical Practitioners or for test in a Laboratory for purposes of quality control in the premises of the factory of manufacture or in any other premises approved by Collector or for use by the Central Excise or Drug Control Authorities, and packed in a form distinctly different from regular trade packing and each smallest packing being clearly and conspicuously marked physician's sample-not to be sold." 27. The provision aforesaid has not been mace in respect of the products containing alcohol. The appellant, therefore, cannot derive any benefit from this provision. The only benefit, the appellant is entitled to appears to us to be this that in levying the excise duty, as the Supreme Court has pointed out, one has to take into consideration (a) the manufacturing cost and (b) the manufacturing profit. The wholesale prices of the appellant's drugs can be ascertained from the appellant's catalogue. The appellant is entitled to satisfy the authorities concerned as to the extent the wholesale price includes the manufacturing profit. In that event the authorities being satisfied as to the quantum of manufacturing profit may grant exemption from excise duty in respect of that profit since the profit is not being earned at all so far as physicians' free samples are concerned. 28. In that event the authorities being satisfied as to the quantum of manufacturing profit may grant exemption from excise duty in respect of that profit since the profit is not being earned at all so far as physicians' free samples are concerned. 28. The learned trial Judge has rejected both the claims of the appellant. His Lordship's specific attention was not drawn to this question of manufacturing profit. We are of the opinion that excise duty can be levied on physicians samples except that the manufacturing profit as established by the appellant is to be excluded in computing the value on which such duty would be levied. 29. We, therefore, allow the appeal in part. We direct the issue of a writ in the nature of Manadmus commanding the respondents to impose excise duty on physicians' samples of the appellant's products which are distributed free by the appellant by excluding from wholesale price thereof the manufacturing profit which the appellant would have earned if those samples had been sold in the wholesale market. We also direct the respondents to consider all the claims of the appellant for refund, if any, including the refund due on Physicians' samples and dispose of such claims within three months from date in accordance with law. There will be no order as to costs. S.K. Datta, J.: I agree. Appeal allowed in part with directions.