Unit-3 Medicinal and Toilet Preparations Act – 1955 (M and TP Act or Excise Duties Act – 1955) and its Rules – 1976

 Introduction

1) Alcohol and Narcotic Drugs are used in the manufacture of various  Medicinal Preparations and alcohol is also used in manufacture of a number of toilet preparations. Therefore alcohol and narcotic drugs are supplied at subsidised prices to such manufacturers by the excise department, but they are likely to be misused for the purpose other than the actual purpose for which they are supplied by the government.
2) Before the implementation of this Act, each state had its own rates of  Excise Duty levied on alcohol and Narcotic Drugs used in the manufacture of medicinal and toilet preparations resulting in difference in the final cost of such products sold in the market leading to inter-state smuggling of such preparations by illicit trafficking. 

Therefore in order to implement stringent rules and also punishment for the  offenders who misuse the alcohol and narcotic drugs supplied at subsidised  prices and also to bring uniformity in the rate of excise duty levied on such products throughout the country, the Medicinal and Toilet Preparations Act was  implemented in the year 1955 and its rules 1976.

Definitions

1) Alcohol – It is defined to include ethyl alcohol [C2H5OH] of any strength and percentage purity.
2) Medicinal Preparations – These are defined to include any medicines used  for diagnosis, prevention, mitigation, treatment and cure of any diseases in human beings and animals and used either internally or externally containing alcohol or narcotic substances.
3) Toilet Preparations – These are defined to include any preparations intended to be used for cleansing the skin, hair or teeth or used in the form of a perfume or for beautification or for improving or altering the complexion including deodorants containing alcohol.

4) Bonded Manufacture (Bonded Laboratory) – It is the licensed manufacturing premises where Medicinal and Toilet Preparations containing alcohol or Narcotic Substances are manufactured on which excise duty is levied or paid only on the finished products (or on which excise duty is not paid until the  finished product has to be removed out of the Bonded Laboratory).
5) Non Bonded Manufacture (Non Bonded Laboratory) – It is the licensed manufacturing premises where Medicinal and Toilet Preparations containing alcohol or Narcotic Substances are manufactured on which excise duty is levied or paid in advance only.
6) Denatured spirit (denatured alcohol) – It is defined to include alcohol of any  
strength which has been rendered unfit for human consumption approved  
by the Central Government. Example: Methyl Alcohol or Methanol [CH3OH].

 

7) Restricted Preparations – These are defined to include medicinal  
preparations containing alcohol or narcotic substances which are likely to  
be abused or misused as alcoholic beverages and listed separately under  
the Act. Examples: Corex Cough Syrup, Phensydyl Syrup.

Conditions (procedure) to be followed for obtaining a licence to  

Manufacture in Bond (Bonded Manufacture in a Bonded Lab)
1) Any person who wishes to manufacture in bond has to submit an application in the prescribed form along with the prescribed fees and necessary documents to the excise commissioner of the state at least  two months prior to the commencement of manufacture.
2) The documents required to be submitted include:-
  A. Proof of ownership of the bonded laboratory or if it is leased  including its plan and layout. 

  B. Whether proprietorship firm or a partnership firm or a company along with related documents.

  C. A copy of the manufacturing licence obtained under drugs and  cosmetics act 1940. 

  D. List of equipments to be installed.

   E. List of expert technical staff appointed including their experience. 

   F. Any other documents and information as required by the licensing authority.
3) The following information should be provided in the application form:-

A. Name and residential address of the applicant.
B. Name and official address of the manufacturing unit (that is bonded laboratory).
C. Names and addresses of the partners in case it is a partnership  firm.
D. Names and addresses of the board of directors in case it is a  company.
E. Names, qualifications and experience of the person in charge of  manufacturing and the person in charge of analysis in the bonded laboratory.
F. Amount of capital proposed to be invested.
G. Full description of all the equipments, vessels, stills and operators proposed to be installed.
H. Names, quantities and details of all the medicinal and toilet preparations proposed to be manufactured.
I. Approximate quantity of alcohol or narcotic drugs required for three months or for six months or for one year.
J. Weather a full time or a part time excise officer required to be in charge of the bonded laboratory.
K. Any other information required by the licensing authority.
4) On receiving the application the licensing authority shall inspect and enquire into the following aspects of the applicant:-
A. Building plan, plant and equipments to be installed in the manufacturing unit.
B. Qualification and experience of the expert technical staff.
C. Financial condition of the applicant and.
D. Suitability of the proposed bonded laboratory.

5) If the licensing authority is satisfied of all the conditions being fulfilled by the applicant, shall inform the applicant to submit a bond on stamp paper that "he shall follow all the conditions of the licence" and then issue a licence in the prescribed form for manufacture in bond in a bonded laboratory.

6) The licensing authority shall depute either a full time or part time excise officer for the bonded laboratory.
7) The proposed bonded laboratory should be constructed separately and not connected with any other sections.
8) The licensee can start the manufacture of medicinal and toilet preparations in his bonded laboratory after obtaining the licence.

Requirements of a bonded laboratory

1) Following requirements have to be fulfilled for manufacturing medicinal and toilet preparations in a bonded laboratory.

The layout plan of the bonded laboratory should have at least 4 to 6 sections.

A. Room for excise officer in charge provided with sufficient furniture.

B. Room for storing alcohol and narcotics substances.

C. Room for manufacturing medicinal preparations containing alcohol or narcotic substances.

D. Separate room for manufacturing toilet preparations containing alcohol.

E. Analytical section or a room for analysing the samples of the preparations manufactured in the bonded lab.

F. A room for keeping or storing the finished products.

2) Each room in the bonded laboratory shall bear a sign board indicating the purpose for which it is provided with serial numbers.

3) There shall be only one entrance to the bonded laboratory and only one door for each room.

4) All the windows provided in the bonded lab should be made of strong, malleable iron rods covered with a mesh.

5) The pipes from wash basins should be connected with the general drainage system.

6) Gas and electric connections should be such that they can be switched off or cut off at the end of the day's work.

7) All the containers and vessels having alcohol or narcotic substances should bear serial numbers with exact quantity of alcohol or narcotic substance present in each such container or vessels.

8) All the rooms and the main door of the bonded laboratory should have excise ticket locks and opened or closed only in the presence of excise officer in charge.

9) Only authorised persons working in the bonded laboratory should be allowed to enter and exit the premises.

10) Strict G.M.P. should be followed in the bonded laboratory.

Manufacture of Medicinal and Toilet preparations in the bonded laboratory 

I. Procedure for obtaining the spirit or narcotic substances from the warehouse.

1) An indent in the prescribed form in three copies should be submitted by the person in charge to the excise officer in charge of the bonded laboratory mentioning the exact quantity of alcohol required or narcotic substances required for one or two months etc. with his signature and seal.

2) The excise officer shall check the indent, put his signature and seal and then return them in the form of permits to the applicant.

3) Applicant shall then send an authorised person with the permits to an authorised distillery or warehouse for procuring alcohol/narcotic substance.

4) Excise officer in charge of the distillery or warehouse shall receive these permits and after verification issue the quantity of alcohol to the person in sealed containers after collecting the price of such alcohol without collecting the excise duty on it.

5) Payment towards the cost of alcohol is normally collected in the form of a bank DD or adjustment in advance amount already paid by the licensee.

6) Officer in charge shall enter the quantity of the alcohol so issued in all the three copies of the permit, put his signature and seal, keep one copy with him and return the remaining two copies to the person who has approached for collecting the alcohol.

7) The person shall then transport such sealed containers of alcohol to the bonded laboratory without opening or tampering the seals or the vessels.

8) On receiving the stock of alcohol, the excise officer in charge of the lab and the person in charge of the manufacturing shall check the seals of the containers and transfer them to the room number 2 of the bonded laboratory meant for storing the alcohol and narcotic substances.

9) They shall enter the exact quantity of stock received in the stock register to be maintained in that room, seal them once again with both parties signature, lock the room and seal it.

10) Excise officer in charge shall keep one copy of the permit with him and hand over the remaining copy to the person in charge after putting his signature and seal.

 II. Procedure for obtaining alcohol from the spirit store for manufacturing medicinal preparations.

1) Person in charge of the manufacturing section shall prepare the "batch formula chart" of the medicinal preparation being manufactured containing alcohol, calculate and mention the exact quantity of alcohol required, prepare an indent in duplicate and hand over the same to the excise officer in charge after keeping all the ingredients and vessels ready for the manufacture.

2) Both the officer and the person in charge shall go to the spirit store and open it, take out the quantity of alcohol required, enter the same in the stock register, close and seal the vessels, come out of the store room, close and seal it.

3) Then the entries are made in the indent about the quantity of alcohol taken out, officer shall keep one copy with him and return the other copy to the person in charge along with the alcohol for manufacture.

4) Person in charge (expert technical staff) shall then mix the alcohol with other ingredients of the preparation and start the manufacturing process immediately.

5) The manufacturing vessels containing alcohol should be labelled with:-

A. Name and batch number of the preparation.

B. Description and the quantity of the alcohol added to the preparation.

C. Date of manufacturing, batch number and date of finished products obtained.

D. Percentage strength of alcohol present in the finished product.

6) The finished products are then transferred to the room meant for storing the finished products after finishing, packing, sealing and labelling including the strength of alcohol present in each preparation and the entries are also made in the stock register of the store room.

 III. Issue of finished products from the bonded laboratory.

1) Person in charge of the bonded laboratory shall prepare an indent in duplicate for the issue of a specific stock of finished products and submit the same to the excise officer in charge of the bonded lab.

2) On receiving the indents the officer and the person shall go to the stock room of finished products, take out the stock of the product as required by the person, make necessary entries in the stock register and take out the stock from the room.

3) The officer shall then calculate the total quantity and strength of alcohol present in the stock of the finished products taken out, calculate the amount of excise duty to be collected and accordingly collect the same by way of a bank DD or adjustment in the amount already remitted by the licensee in the form of a deposit.

4) However if the stock of such finished products taken out are meant to be exported or meant for free of supply in the government hospitals or charitable institutions, the excise duty shall not be collected as they are exempted from the payment of excise duty.

5) The copies of indents are accordingly entered, one copy is retained by the officer, another copy is returned to the person in charge of the bonded lab and the stock of finished products is allowed to be taken out from the bonded laboratory.