Nicholas Piramal India Limited, one of the top ten pharmaceutical companies of India, has been served a show-cause notice by the Customs and Central Excise Department for intentional evasion of customs duty and countervailing duty (CVD) on the imports of propofol, an intravenous sedative-hypnotic anaesthetic.

The show-cause notice sent to NPIL by the Additional Customs Commissioner, Mumbai has asked the company to explain the reason, if any, for the said duty evasion or to pay a fine of Rs 2 crore immediately.

According to informed sources at the office of the Additional Customs Commissioner, Mumbai, the company, for the last few years, has been misusing the provision of duty exemption allowed on the import of IV fat emulsion with misleading invoice, hiding the fact that the bottle contained the drug-propofol along with IV fat emulsion.

Currently, import of propofol attracts import duty at the rate of 20 per cent and CVD of 16.32 per cent. NPIL, which markets the drug in the Indian market with the brand name Critifol, has been importing this product.

Critifol, a 1 per cent propofol ampoules of 20 ml, is sold in the country at a price range of Rs 22-35 per ampoule that is supposedly including import duty and CVD. However, the company, by evading these duties, was making an extra profit on the brand during these years, it is learnt.

The Customs officials informed that though the company has admitted that it has been evading duty on these imports, they have so far not replied to the notice served on them. The total quantity of imports and the amount of evaded duty over the period is still to be estimated, the customs officials informed.

However, when contacted, NPIL sources informed that the company is aware of the matter after the Mumbai Customs put this into its notice recently. "But, we have not yet received the show cause notice," the company official said.

The company source added that as per the company's estimate the liability on account of the said duty evasion would be to the tune of Rs 25 to 30 lakh. When asked about the wrong declaration made by the company to the Customs while importing the drug, the sources said that the company would contest the view of the Customs Department in this regard. However, the company official, who estimated the duty liability, said that he does not know the price of the company's brand Critifol.

Propofol (Diprivan) is a popular intravenous sedative-hypnotic anaesthetic widely used because of its rapid onset of action and recovery. It is structurally unrelated to other hypnotic agents, but has additive or synergistic effects with many of these compounds. The initial development of propofol began in the 1970's, and it was introduced into clinical practice in 1989 with its approval by the Food and Drug Administration. Since then, it has become the anaesthetic of choice in many cases. Because of its rapid induction and recovery from anaesthesia, propofol has created a niche for itself in the ambulatory anaesthesia field.

Similarly, propofol has become a popular neuroanaesthesia agent because of the early ability to assess post-operative neurological outcome. Propofol has also been used for cardiac anaesthesia, sedation in the intensive care unit, and it has been used selectively in the emergency department for procedures requiring sedation. Propofol has also been used for sedation for endoscopy, ocular surgery, and dental procedures, with expanding new uses being proposed regularly.