Description
Medicinal and Toilet Preparation Act-1955
•Alcohol has always been a fascinating friend of the mankind.
•Drinking alcohol for pleasure’s sake is an abuse.
•Use of alcohol for preparation of medicines is necessity.
•Alcohol used either for drinking or manufacture of
perfumes is subjected to higher duties than that of used in medicine preparation.
•Affordability of alcohol is to be controlled.
•This is the reason to take thisAct in existence. Act was passed in 1955 and rules were passed in 1956 To provide collection of levy and collection of duties on medicinal and the toilet preparations containing alcohol , narcotic drugs or narcotics.
Came to force on 1st April, 1957.
An excise or excise tax is a tax on production or sale
of various goods especially luxuries, tobacco, alcohol etc.
In common terminology (but not necessarily in law), an excise is distinguished from a sales tax in three ways:
(i)an excise typically applies to a narrower range of products;
(ii)an excise is typically heavier, accounting for a higher fractionof the retail price of the targeted products; and
(iii)an excise is typically a per unit tax, costing a specific amountfor a volume or unit of the item purchased.
Definitions
Alcohol- means ethyl alcohol of any strength and purity having chemical composition C2H 5OH.
Dutiable goods-means the medicinal and toilet preparations specified in the Schedule as being subject to the duties of excise levied under this act .
Excise Officer- means the officer of the Excise Department of any State and any person empowered to exercise all or
any of the powers of the excise officer under thisAct. manufactured only under the authority of a license.
License for this purpose can be issued only if the person has license for the manufacture of drugs under drugs and cosmetics act and rules.
Procedure for obtaining license.-
Application for the license or for its renewal is made to the licensing authority who is
(i)the Excise Commissioner in the case of a bonded manufactory or warehouse;
(ii) in other cases, such officer as the State Government may authorize in this behalf. A person desiring to obtain a license to establish a bonded or non-bonded manufactory shall in his application for license furnish the following particular:
On receipt of an applica
Supply of rectified spirit for manufacture of medicinal and toilet Preparation:
Manufacture in bond
➢Alcohol on which duty has not been paid is to be used
under excise supervision
Layout of in bond laboratories:
➢There shall be only one entrance to the bonded manufactory and one door to the each of the compartments.
All these doors should be secured with excise ticket locks
during the absence of officer in-charge.
A bonded manufactory has provisions for the following:
MANUFACTURE OF ALCOHOLIC PREPARATION:
Procurement of rectified spirit:
Storage of finished products:
•Medicinal and toilet preparations are to be stored in the jars or bottles each containing not less than 80 fluid ounce
volume.
•Every container of the finished preparation should bear a
label showing its name, batch number, alcoholic strength and the name of the manufacturer.
•The containers should be arranged in suitable racks that it allows the ready identification of each batch.
•Issue of alcoholic preparations from the bonded
laboratory:
•Alcoholic preparations from a bonded laboratory can be taken out by
a manufacturer by making an application to the excise officer in the
prescribed form after paying duty on it.
•EO after checking the entries and releasing the duty payable, allows the required quantities to be removed after issuing a permit.
•Dutiable goods cannot be delivered from a bonded manufactory or a bonded warehouse before 6 am and after 6 pm
nor at any hour on Sundays or other holidays.Disposal of sub-standard preparations.
Establishment of bonded warehouses.-
The manufacturers or dealers in dutiable goods may establish bonded warehouses anywhere in India. No duty paid goods and no goods other than dutiable goods shall be deposited in such bonded warehouses. The Excise Commissioner shall license
- Subject:- pharmaceutical Jurisprudence
- Course:- B.pharm (pharmacy),
- Semester:- 4th sem , sem :- 4
Medicinal and Toilet
Preparation Act-1955
www.remixeducation.in
•Alcohol has always been a fascinating friend of the
mankind.
•Drinking alcohol for pleasure’s sake is an abuse.
•Use of alcohol for preparation of medicines is
necessity.
•Alcohol used either for drinking or manufacture of
perfumes is subjected to higher duties than that of
used in medicine preparation. www.remixeducation.in
•Affordability of alcohol is to be controlled.
•This is the reason to take this Act in existence. 2
Prior to the enactment of ‘Medicinal and toilet preparation
act’, each state had different set of rules for the spirituous
medicinal preparations.
Same item had different excise duty in different states,
leading to inter-state smuggling of such preparations.
This is the reason to take this Act in existence.
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Act was passed in 1955 and rules were
passed in 1956
To provide collection of levy and collection of duties
on medicinal and the toilet preparations containing
alcohol , narcotic drugs or narcotics.
Came to force on 1st April, 1957.
www.remixeducation.in 4
An excise or excise tax is a tax on production or sale
of various goods especially luxuries, tobacco, alcohol
etc.
In common terminology (but not necessarily in law),
an excise is distinguished from a sales tax in three
ways:
(i)an excise typically applies to a narrower range of products;
(ii)an excise is typically heavier, accounting for a higher fraction of
the retail price of the targeted products; and
(iii)an excise is typically a per unit tax, costing a specific amount for
a volume or unit of the item purchased. www.remixeducation.in 5
Definitions
Alcohol- means ethyl alcohol of any strength and purity
having chemical composition C2H 5OH.
Dutiable goods-means the medicinal and toilet preparations
specified in the Schedule as being subject to the duties of
excise levied under this act .
Excise Officer- means the officer of the Excise Department
of any State and any person empowered to exercise all or
any of the powers of the excise officer under thisAct.
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Medicinal Preparation- includes all drugs which are 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 diseases in human
beings or animals.
Toilet preparation- means any preparation which is intended
for use in the toilet of the human body or in perfuming apparel
of any description, or any substance intended to cleanse,
improve, or alter the complexion, hair, skin or teeth and
includes deodorants and perfumes.
Absolute alcohol- means alcohol confirming to the British
Pharmacopoeial specification for dehydrated alcohol
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Bonded manufactory- means the premises or any part of the
premises approved and licensed for the manufacture and
storage of medicinal and toilet preparations containing
alcohol, opium, Indian hemp and other narcotic drugs or
narcotics on which duty has not been paid.
Non-bonded manufactory-means the premises or any part of
the premises approved and licensed for the manufacture and
storage of medicinal and toilet preparations containing
alcohol, opium Indian hemp and other narcotic drugs or
narcotics on which duty has been paid. www.remixeducation.in 8
“Denatured spirit� or “ Denatured alcohol� means
alcohol of any strength which has been rendered unfit for
human consumption by the addition of substances
approved by the Central Government or by the State
Government with the approval of the Central Government.
finished store- means that portion of a non bonded or
bonded manufactory which is set apart for the storage of its
finished preparations
“laboratory�
“
means that part of a non-bonded or bonded
manufactory in which the actual manufacture of dutiable
goods takes place.
rectified spirit� means plain un-denatured alcohol of a
strength not less than 50.0° over proof and includes
absolute alcohol. www.remixeducation.in 9
Restricted preparation� means every medicinal
preparation specified in the schedule and includes every
preparation declared by the Central Government as
restricted preparation.
“Unrestricted preparation� means any medicinal
preparation containing alcohol but other than a restricted
preparation or a spurious preparation;
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“spirit store� means that portion of the bonded or non-
bonded manufactory which is set apart for the storage of
alcohol, opium, Indian hemp and other narcotic drugs or
narcotics purchased free of duty or at prescribed rates of duty
specified in the schedule to theAct.
Sub-standard preparation- is --
(a)a pharmaceutical preparation in which the amount of any
of the various ingredients is below the minimum that the
pharmacopoeial composition would require , or
(b)a proprietary medicine which does not conform to the
formula or the list of ingredients disclosed on the label on the
container or on the container www.remixeducation.in 11
Standard preparation- means a preparation other than a “
sub-standards preparation.
Warehouse-means any place or premises licensed under
rule 70.
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manufactured only under the authority of a license.
License for this purpose can be issued only if the person has
license for the manufacture of drugs under drugs and cosmetics
act and rules.
Procedure for obtaining license.-
Application for the license or for its renewal is made to the
licensing authority who is
(i)the Excise Commissioner in the case of a bonded manufactory or
warehouse;
(ii) in other cases, such officer as the State Government may
authorize in this behalf. www.remixeducation.in
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(2)If any person desires to have more than one kind of license
he shall submit a separate application for every such license.
(3)Where the applicant has more than one place of business he
shall obtain a separate license in respect of each such place of
business.
â–ªApplication should be submitted in the prescribed form
accompanied with prescribed fee, at least two months before
the proposed date of commencement of the manufacture.
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A person desiring to obtain a license to establish a bonded
or non-bonded manufactory shall in his application for
license furnish the following particular:
(i) the name, and the address of the person; place and site on
which the manufactory is situated or to be constructed;.
• If the applicant is a firm, the name and address of every
partner of the firm;
• and if a company, its registered name and address, and the
names and address of its Directors, Managers and
Managing Agents, should be specified.
(ii) the amount of capital proposed to be invested in the
venture; www.remixeducation.in 15
(iv)the approximate date from which the applicant desires to
commence working the manufactory in case the required
license is granted;
(v)the number and full description of the vats, stills and other
permanent apparatus and machinery which the
applicant wishes to set up.
(vi)the maximum quantities of alcohol and alcoholic content
in unfinished and finished preparations and the maximum
quantities by weight of opium, Indian hemp or other narcotic
drugs and their content in unfinished and finished
preparations.
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(vii)whether the proposed bonded manufactory will require
the service of a whole-time or part-time Excise Officer;
(viii)The site and elevation plans of the manufactory/building
and also similar plans for the quarters of the excise officer.
(viii) the kind and number of each license under the Drugs and
CosmeticsAct held by the applicant; and
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(ix) a list of all preparations which the licensee proposes to
manufacture in his manufactory showing the percentage or
proportion of alcohol contained in each such preparation
containing alcohol, or of opium, Indian hemp or other narcotic
drug or a narcotic, in terms of weight in preparations
containing those substances, quoting the authority
(pharmacopoeia) under which such preparations are proposed
to be manufactured
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On receipt of an application, licensing authority may
enquire into the following:
(I ) the qualifications and previous experience of technical
personnel engaged in the manufacturing operation;
(ii)the equipment of the bonded and non-bonded
manufactory;
(iii)soundness of the applicant’s financial position ;
(iv)suitability of the proposed building for the establishment
of manufactory.
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✓ not transferable and cannot be sold.
✓ exhibited in the licensed premises.
✓In case of transfer, the purchaser has to obtain fresh license but
residue of period covered by the license is issued free of cost.
✓A licensee can enter into partnership after the prior sanction of
the licensing authority and his license is then suitably amended.
✓If licensee desires to transfer his business to new premises by
getting into the notice of LA at least 15 days in advance
specifying the address of the premises and getting his license
suitably amended.
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✓License can be suspended or revoked by LA if the licensee
or any of his employee has committed a breach of the
prescribed condition of the ACT or Rules or has convicted
an offense under the Indian Penal Code 1860.
✓ License is valid for a period of 1 year and can be renewed
thereafter.
✓Any corrections in the license is valid only if it is ordered
and attested by the LA
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Supply of rectified spirit for manufacture of medicinal
and toilet Preparation:
Supplied to a manufacturer from a distillery or a spirit
warehouse of the State in which the manufactory is situated,
or outside the state.
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Mode of manufacture.-
In the case of manufacture in bond ( bonded=on which
duty has not been paid), alcohol shall be used under excise
supervision;
and in the case of manufacture outside bond(non-
bonded=on which duty has already been paid), only
alcohol shall be used.
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Manufacture in bond
➢Alcohol on which duty has not been paid is to be used
under excise supervision
Layout of in bond laboratories:
➢There shall be only one entrance to the bonded
manufactory and one door to the each of the compartments.
All these doors should be secured with excise ticket locks
during the absence of officer in-charge.
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➢A bonded manufactory has provisions for
the following:
i.one plain spirit store unless the manufactory is attached to a
distillery or a rectified spirit warehouse from which rectified
spirit is made available as and when necessary.
ii.at least one large room for manufacturing medicinal
preparations.
iii.one or more rooms for storing finished medicinal
preparations.
iv.separate arrangement for manufacture of toilet
preparations.
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v. the storage of finished toilet preparations. vi.accommodation
with necessary furniture in the bonded
premises for the officer-in-charge
vii.malleable iron rods not less than ¾� in thickness, setnot
more than 4� apart, embodied in brick work up to a depth of at
least 2 inches and covered on the inside with strong wire
netting or expanded metal of a mesh not exceeding 1inch in
diameter or length in every window of the bonded premises.
viii.a board on which the name of the room and a serial
number, if any, are legibly painted in oil colour on the outside
of every such room in the manufactory.
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ix.all pipes from sinks or wash-basins inside manufactory
premises discharging into drains forming part of the general
drainage system of the premises.
x.all gas and electric connections within the licensed
premises so fixed as to admit of the supply of gas or
electricity being cut off and all the regulators or switches
being securely locked at the end of the day’s work.
Prior permission of the Excise Commissioner is a must for
making alterations or additions in the bonded premises.
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MANUFACTURE OF ALCOHOLIC PREPARATION:
Procurement of rectified spirit:
•Rectified spirit required for manufacturing medicinal and
toilet preparations shall be obtained on an indent
countersigned by the officer-in-charge, from any distillery or
spirit warehouse.
•If the distillery or warehouse officer has received the duplicate
of the indent from the officer-in-charge of the bonded
manufactory, he shall issue the spirit required, in duly sealed
containers and send an advice of the consignment to the officer
in-charge.
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Verification of rectified Spirit received.- Consignments of
rectified spirit received under bond shall be verified in
volume and strength and the amount entered in register
maintained for the purpose.
Then the spirit is stored in spirit store.
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Storage of rectified spirit.-
(1)After the rectified spirit received has been verified, it
shall be stored in one or more vessels in the spirit store.
(2)If, in any particular case, it is proved to the satisfaction of
the Excise Commissioner that the loss is bonafied and not
due to negligence or connivance on the part of the
manufacturer, the duty payable in respect of such loss may
be waived in full in part according to the merits of the case.
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•Rectified spirit shall be issued on a requisition of the licensee, to
the officer in-charge.
•The manufacturer should keep all ingredients of the preparation ready
and mix the alcohol immediately in the presence of officer in-charge.
•Every time percolator or any vessel intended for alcohol is being
charged, a label should be attached showing the following
particulars:
• Name and batch no of preparation.
• Description and quantity of alcohol placed in it.
• The date of removal of such preparation and quantity removed.
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After completion of manufacture, preparation is transferred to
• finished goods stores where it is measured and stored in the
vessels provided for the purpose and accounted for in a register.
• Licensee is permitted to take the free samples required for
analysis as the officer in charge considers necessary for analysis
and declaration of the strength of alcohol and medicaments.
• Any quantity left over after analysis should be mixed with the
main bulk of the batch before it is measured and stored.
Quantity used by licensee should be accounted separately.
• All the samples for analysis should be supplied free of cost by
the licensee
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Storage of finished products:
•Medicinal and toilet preparations are to be stored in the jars
or bottles each containing not less than 80 fluid ounce
volume.
•Every container of the finished preparation should bear a
label showing its name, batch number, alcoholic strength
and the name of the manufacturer.
•The containers should be arranged in suitable racks that it
allows the ready identification of each batch.
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•A record of all deficiencies in bulk content of finished
preparation should be kept by the officer –in-charge and
reported to the Excise Commissioner quarterly.
•If EC is satisfied that the deficiency was due to natural or
unavoidable reasons and that alcoholic preparation has not
gone into consumption he may remit the duty payable.
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•Issue of alcoholic preparations from the bonded
laboratory:
•Alcoholic preparations from a bonded laboratory can be taken out by
a manufacturer by making an application to the excise officer in the
prescribed form after paying duty on it.
•EO after checking the entries and releasing the duty
payable, allows the required quantities to be removed after
issuing a permit.
•Dutiable goods cannot be delivered from a bonded
manufactory or a bonded warehouse before 6 am and after 6 pm
nor at any hour on Sundays or other holidays.
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Disposal of sub-standard preparations.—
(1) A finished medicinal or toilet preparation which is or is
suspected to have deteriorated in quality, may be destroyed
by the manufacturer with the permission of the Excise
Commissioner and relevant entries made in the register .
(2)The Excise Commissioner may allow the manufacturer to re-
process a sub-standard preparation.
(3)Excise duty shall not be levied on the preparation so
destroyed provided the Excise Commissioner is satisfied that
the deterioration of the preparation or its improper manufacture
was due to reasons beyond the control of the licensee.
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Disposal of recovered alcohol.---
•Alcohol recovered in the course of production of a medicinal
or toilet preparation or distilled separately from the mark of
such preparation may be used for subsequent production of
the same preparation provided such alcohol is collected
separately and accounted for separately.
•In cases where the alcohol recovered from a preparation
liable to duty at the lower rate is sought to be used in the
manufacture of a preparation subject to higher rate of duty,
the duty on the preparation so manufactured shall be collected
or made leviable on determination of the spirit strength of the
preparation. www.remixeducation.in 39
(3)An account of recovered alcohol in a recovered alcohol vat
shall be maintained by the officer-in-charge
(4)Recovered alcohol declared by the licensee to unfit for use
shall be destroyed by him in the presence of the officer-in-
charge on submission of written application.
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•The State Government may, from time to time, fix the percentage
of wastage in the production of a particular medicinal or toilet
preparation .
•Any wastage that exceeds the allowable limit and is not properly
accounted, shall be charged with the duty together with such penalty
not exceeding the duty leviable thereon as the Excise Commissioner
may deem fit.
•If the alcohol in strength of a preparation is found by the Chemicals
Examiner to exceed the highest allowable limit by more
than 3 proof degrees or to be below the lowest allowable limit, its
issue from the bonded manufactory, shall be withheld.
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Remission of duty in case of loss due to accident.—
•In case of any accidental loss of alcohol In a bonded
manufactory, the officer in-charge shall institute necessary
enquiries without delay to ascertain the cause of such loss.
•If such loss is found to be beyond the control of the licensee
the duty on the alcohol so lost shall be remitted with the
approval of the Excise Commissioner or may Exercise office
subordinate to, the Excise Commissioner specially
empowered by him in this behalf.
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Manufacture outside the bond
•Manufacture and sale in non-bonded manufactory is
conducted between sunrise and sunset and on such days and
hours fixed by the Excise Commissioner.
•There should be a spirit store, a laboratory, a finished store,
each having one door and only one entrance to the non bonded
laboratory.
•Construction of premises is same as bonded manufactory.
•Any alteration in the arrangements of the buildings should be
made with prior permission of Excise Officer.
•Permanent vessels , macerators and percolators or carboys
and filled bottles should be labeled properly.
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Obtaining duty paid spirit :
•obtained from spirit warehouse on an indent prepared in
triplicate.
•Original copy sent to the distiller or spirit warehouse keeper,
the duplicate to the officer-in-charge of the distillery or spirit
warehouse and triplicate with licensee
•Duty is paid to the Govt Treasurer and challan in token of
such payment should be enclosed along with the duplicate
copy of the indent which is being sent to the officer in charge
of the distillery who shall issue spirit along with the permit
covering the issue.
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•The spirit brought should be immediately transferred to
spirit store and necessary account written up in the
prescribed register.
•Manufacturer cannot seal the spirit issued to him and at any
cost the spirit in possession with manufacturer should not
exceed the limit fix by licensing authority.
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Manufacture , storage and sale:
•Carried out in licensed premises only.
•Each preparation should be registered and bear a batch
number.
•All the finished preparation should be stored in finished
store and arranged such that checking of stock of every batch
of preparation from register is facilitated.
•The quantities taken out from time to time should be entered
in stock and maintained for the purpose.
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Samples to be taken by the Excise Officer at least once a
month for analysis.—
1)The Excise Officer, in which jurisdiction the manufactory is situated
, shall , without previous notice to the manufacturer , take samples of not
less than 10 per cent and not more than 15 per cent (save in
exceptional circumstances) of the total number of the medicinal and toilet
preparations containing alcohol from the finished stocks at least once
every month and forward them to the Chemical Examiner for analysis and
report whether the alcoholic contents thereof tally with the percentage of
alcohol shown on the labels affixed to the bottles.
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2) If the proof strength reported by the Chemical Examiner is more
than 3 percent proof spirit than the strength declared by the
manufacturer on the labels pasted on such bottles, the manufacturer
is liable to a penalty at the rate of 10 items the difference in duty in
the quantity so manufactured but not exceeding Rs. 2,000
•If such differences are found to occur frequently , the Excise
Commissioner may order the cancellation of the licence held by the
manufacturer.
•All samples are to be taken by excise officer only in presence
of manufacturer or his authorized agent.
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•The cork of every bottle in which sample is kept shall be
fixed with the officer’s personal seal or the official seal and
the name of the preparations and batch number shall be stated
on label of each such bottle.
•The label of the bottle shall be signed by the officer taking
the sample
•The manufacturer, if he so desires, shall be allowed to affix
his own seal and sign the labels.
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Employees.—(i) The manufacturer shall furnish to the
Excise Commissioner a list containing the names of the
manager or assistant manager employed by him and of all
other employees working under non bonded manufactory.
(ii)He shall promptly inform the Excise Commissioner and
the proper officer of any changes which he may choose to
make in the list from time to time.
(iii)No person other than the person whose name is
contained in the list shall enter the manufactory without the
special permission of the proper officer.
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Inspection. –
(1)The non-bonded manufactory shall at all reasonable
times be open for inspection by the Excise Commissioner
and other Excise Officer having jurisdiction over the area in
which the manufactory is situated.
(2)The proper officer shall inspect the non-bonded
manufactory at least once every month.
(3)The State Government may authorize any officer of the
prohibition, land revenue , medical and public health
department to inspect the non-bonded manufactory.
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Types of preparations- Asavas and Aristas are the
principal types of Ayurvedic preparations in which
alcoholic contents is self-generated and not added to
such.
Until a standard Ayurvedic pharmacopoeia has been
evolved by the Central Government, the
pharmacopoeias that are in the various States shall
be recognized as standard Ayurvedic
pharmacopoeias
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•No duty shall be levied on Ayurvedic preparations containing
self-generated alcohol in which the alcoholic content does not
exceed 2 percent proof spirit.
•Preparations containing more than 2% alcohol but are not
.
suitable to be consumption are also exempted from the duty.
•But preparation that can be consumed are liable to a duty of
Rs 1 per L. P. liter.
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Homeopathic preparations: containing alcohol are classified
as being consumed as ordinary alcoholic beverages and
attract duties prescribed for such class of preparation falling
under the category of restricted preparations.
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Establishment of bonded warehouses.-
The manufacturers or dealers in dutiable goods
may establish bonded warehouses anywhere in
India. No duty paid goods and no goods other
than dutiable goods shall be deposited in such
bonded warehouses.
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The Excise Commissioner shall license a private
warehouse for the storage of dutiable goods on which duty has not
been paid and may direct in what manner and on what terms such
goods shall be stored and how and in what manner such
warehouse shall be secured by locks or fastenings.
.
•Licensee to enter into a bond.- excise commisioner require the
licensee to furnish a bond with security, in such amount and under such
conditions, as the Excise Commissioner approves binding the licensee to
pay duty on the goods deposited therein and for the due and safe removal
of such goods to another warehouse and for the due observance of the terms,
conditions and requirements of theAct
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