JUDGMENT Hon’ble Sudhanshu Dhulia, J. 1. Heard Mr. P.R. Mullick, Advocate for the petitioner and Mr. B.D. Kandpal, Deputy Advocate General for the State of Uttarakhand. 2. The petitioner is a public limited company, incorporated under the Companies Act, 1956 and is engaged in the business of manufacturing and marketing of Pharmaceutical products since 2001 under a license issued by the Drug Controlling and Licensing Authority of Uttarakhand. The petitioner also claims to be registered under the Central Excise Act, 1944. The petitioner manufactures cough syrups of different brand names such as Xenocof-D, Instacodin, Codistar Cough Syrup, Wilecod Syrup. In all these cough syrups an essential ingredient is “Codeine Phosphate”. Admittedly “Codeine Phosphate” is nothing but a derivative of “Opium” and can also be called “morphine”. The petitioner is being charged excise duties on the aforesaid products, as according to the State authorities in Uttarakhand, the products being manufactured by the petitioner contain a narcotic or narcotic drugs in the form of “Codeine Phosphate” chargeable to excise duties Toilet Preparations (Excise hereinafter referred to as petitioner states in the writ and hence that product is under the Medicinal and Duties) Act, 1955 (from the “Act”). Although the petition that he has been paying this excise duty to the State authorities but the same is being paid under protest, the accounts of which he has maintained, and has filed the present writ petition before this Court, inter alia, seeking a writ, order or direction in the nature of Mandamus directing respondent no. 2 i.e. the Commissioner (State Excise), State of Uttarakhand, Secretariat, Dehradun not to collect this excise duty under Section 2(b) of the Act from the petitioner on the products containing “Codeine Phosphate”, as the products manufactured by the petitioner and which admittedly contain “Codeine Phosphate” contain the same within the permissible limits and hence cannot be defined as “narcotic” or “narcotic drugs”. 3. Under Section 2 (g) of the Act, “medicinal preparation” is defined as under : “2. Definitions. – In this Act, unless the context otherwise requires, - (a) … (b) … (c) … (d) … (e) … (f) … (g) “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 disease in human beings or animals; 4. “Narcotic drug” or “narcotic” is defined under Section 2(h) of the Act, which reads as under : “2. Definitions. – In this Act, unless the context otherwise requires, - (a) … (b) … (c) … (d) … (e) … (f) … (g) … (h) “narcotic drug” or “narcotic” means a substance which is coca leaf, or coca derivative, or opium, or derivative of opium, or Indian hemp and shall include any other substance, capable of causing or producing in human beings dependence, tolerance and withdrawal syndromes and which the Central Government may, by notification in the Official Gazette, declare to be a narcotic drug or narcotic;] 5. In other words, a “narcotic drug” or a “narcotic” would mean coca leaf and its derivatives, opium or derivatives of opium, etc., which the Central Government may by notification declares to be a “narcotic drug” or “narcotic”. 6. There is a notification by the Central Government No. G.S.R. 762, dated 7.8.1981 issued in pursuance of clause (b) of Section 2 of the Act wherein at Serial No. 35 “Codeine Phosphate” has been declared to be a narcotic product. The relevant portion of the notification issued by the Central Government, more particularly its item no. 35 reads as under :- “35. Methyl morphine (commonly known as ‘Codeine’) and Ethyl morphine and their salts (including Dionine), all dilutions and preparations except those which are compounded with one or more other ingredients and containing not more than 100 milligrams of the drug per dosage unit and with a concentration of not more than 2.5 % in undivided preparations and which have been established in Therapeutic practice.” 7. The contention of the petitioner is that although Codeine is a derivative of Opium but since it is being used under permissible limits in combination with other substances in a medicine, where the concentration is less than 2.5 per cent (it is 0.2 %) and the dosage per unit is much less than 100 milligrams (i.e. only 10 milligrams in the instant case), which is much below the prescribed limits, the drugs being manufactured by the petitioner cannot be classified as narcotic or narcotic drugs. 8. Under the Act, “dutiable goods” is defined under Section 2 (c), which reads as under : 2. Definitions. 8. Under the Act, “dutiable goods” is defined under Section 2 (c), which reads as under : 2. Definitions. – In this Act, unless the context otherwise requires, - (a) … (b) … (c) “ dutiable goods” means the medicinal and toilet preparations specified in the schedule as being subject to the duties of excise levied under this Act;” 9. Consequently a schedule has been mentioned under the Act which prescribes the rates on particular preparations, which reads as under : “THE SCHEDULE (See section 3) Item Description of dutiable goods Rate of duty No. Medicinal Preparation 1. Allopathic Medicinal Preparations – (i) Medicinal preparations containing alcohol which are not capable of being consumed as ordinary alcohol beverages - (a) Patent of proprietary medicines. [Sixteen per cent advalorem] (b) Others [Sixteen per cent advalorem] (ii) Medicinal preparations containing alcohol which are capable of being consumed as ordinary alcoholic beverages - (a) Medicinal preprations which contain [Sixteen per cent advalorem] known active ingredients in thera- peutic quantities. (b) Others [Sixteen per cent advalorem] (iii) Medicinal preparations not containing [Sixteen per cent advalorem] alcoholo but containing narcotic narcotic drug or narcotic 2. Medicinal preparations in Ayurvedic, Unani or other indigenous system of medicine - (i) Medicinal preparations containing self- Nil generated alcohol which are not capable of being consumed as ordinary alcoholic beverages. (ii) Medicinal preprations containing [Four per cent advalorem] self-generated alcohol which are capable of being consumed as ordinary alcoholic beverages. (iii) All others containing alcohol which [Six per cent advalorem] are prepared by distillation or to which alcohol has been added. (iv) Medicinal preparations not containing [Sixteen per cent advalorem] alcohol but containing narcotic drug or narcotic. 10. However, counsel for the petitioner would argue that Codeine Phosphate though admittedly is narcotic or narcotic drug, the petitioner is not selling pure codeine phosphate but it is compounded with one or more other ingredients and contains 10 milligrams of codeine phosphate per dose and a concentration of 0.2 % per dose which is much less than the prescribed limit of 100 milligrams and 0.25 % concentration respectively, as per the said notification of the Central Government. Consequently, it is not a narcotic or a narcotic drug and hence though it is contained in the cough syrups, yet since the doses are much less than the prescribed limit it is not a narcotic drug and hence not chargeable under the Act. Consequently, it is not a narcotic or a narcotic drug and hence though it is contained in the cough syrups, yet since the doses are much less than the prescribed limit it is not a narcotic drug and hence not chargeable under the Act. 11. On behalf of the State, the learned Deputy Advocate General Mr. B.D. Kandpal had argued that excise duty is liable to be levied under the Act if the product contains a narcotic or narcotic drug and since admittedly Codeine Phosphate is a narcotic or narcotic drug, the products which are being manufactured and sold by the petitioner in the form of cough syrups is liable to be charged excise duty. 12. This contention of the learned Deputy Advocate General Mr. B.D. Kandpal appears to be wrong inasmuch as it is not a fact that the cough syrups manufactured by the petitioner contain Codeine Phosphate but in order to make it a narcotic or narcotic drug Codeine Phosphate must be more than the prescribed limit. 13. There is a specific contention of the petitioner that the quantity of codeine phosphate used by the petitioner is much below the prescribed limit – a fact which has not been controverted by the State Government in its counter affidavit. In order to substantiate his argument, the learned counsel for the petitioner Mr. P.R. Mullick has placed two judgments before this Court. One by the Division Bench of Bombay High Court in M/s. USV Limited and another v. State of Maharashtra and others (Writ Petition No. 2348 of 1999) where the issue before the Bombay High Court was whether the Dexovon Capsules which contain 70 mg of “Dextropropoxyphene-HCl” (for short DXC) per dosages per unit and is less than the prescribed limit of 135 mg of per dosage can be classified as narcotic or narcotic drug and hence would be liable to pay State Excise Duty under the Act. The Division Bench came to the conclusion that Excise Duty cannot be charged on the said product because the dosages of narcotic in the products are much less the prescribed limit. In the said judgment, the Division Bench had stated as under : “13. The Division Bench came to the conclusion that Excise Duty cannot be charged on the said product because the dosages of narcotic in the products are much less the prescribed limit. In the said judgment, the Division Bench had stated as under : “13. Plain reading of the Notification dated 12th June 1986 would disclose that any medicinal preparations containing Dextropropoxyphene base per dosage unit not more than 135 mg are excluded from being classified as narcotic drug or narcotic within the meaning of the said expression under Section 2 (h) of the said Act. Once the product of the petitioners discloses Dextropropoxyphene-HCL which in terms contains Dextropropoxyphene base to the extent of 70 mg, which fact has not been disputed by the respondents at any stage of the proceedings, even in the affidavit in reply filed by them, obviously such a product would stand exempted in terms of the said notification and would not be classifiable as narcotic drug or narcotic under the said Act. 14. It is also not in dispute that the excise duty at the rate of 20 % is sought to be levied in terms of clause 1 (iii) of the Schedule to the said Act. The said clause relates to medicinal preparations not containing alcohol but containing narcotic drug or narcotic. Once it is not in dispute that the medicinal preparations of the petitioners cannot be said to contain narcotic drug or narcotic for the reasons stated above, the question of bringing the said product within the ambit of clause 1 (iii) of the Schedule of the said Act does not arise at all. Neither the impugned order nor any materials placed before us even remotely suggest that the product of the petitioners contain Dextropropoxyphene base per dosage unit of 135 mg. Besides, the impugned order exfacie discloses that the authorities have proceeded to classify the product of the petitioners as narcotic drug merely because it contains some quantity of Dextropropoxyphene, while confirming the fact that each dose unit does not contain 135 mg of Dextropropoxyphene base. Besides, the impugned order exfacie discloses that the authorities have proceeded to classify the product of the petitioners as narcotic drug merely because it contains some quantity of Dextropropoxyphene, while confirming the fact that each dose unit does not contain 135 mg of Dextropropoxyphene base. In such circumstances, therefore, the petitioners are justified in contending that there was no occasion for the respondents to classify the product of the petitioners being one as specified under clause 1 (iii) of the Schedule of the said Act and, for the same reason it could not have been subjected to the licence under the said Act or to the State Excise duty in terms of the said Act.” 14. Another judgment relied upon by the petitioner is Amrik Singh v. The State of Punjab reported in 2002 Drug Cases 511, where also the Codeine Phosphate was being used for preparation of cough syrups in the proportion of 9.5 mg per 5 ml, i.e. per dosage unit and the Court held that the preparation in question falls within the ambit of the exception as contained in the item at Serial No. 35 of the Notification issued by the Central Government. 15. In view of the above, writ petition succeeds and is hereby allowed. A mandamus is issued to respondent no. 2 i.e. the Commissioner (State Excise), State of Uttarakhand, Secretariat, Dehradun not to charge excise duty on the cough syrups being prepared and sold by the petitioner under the brand names of Xenocof-D, Instacodin, Codistar Cough Syrup, Wilecod Syrup if it contains Codeine Phosphate less than the prescribed limits. 16. However, it is made clear that the excise duty already paid by the petitioner, though under protest, will not be refunded to the petitioner and this order will only operate prospectively, for reasons that otherwise it would give unjust enrichment to the petitioner as it will be presumed that the petitioner has already passed on his additional liabilities, to its consumers. 17. No order as to costs.