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2023 (8) TMI 179 - HC - VAT and Sales TaxClassification of commodities - rate of tax - Clohex - Clohex Plus - to be treated as medicament and taxable at 5% or not - Senquel-AD Mouthwashes - taxable at the rate of 14.5% by virtue of entry No.92(6) of SRO 82/2006 or not - HELD THAT:- On a reading of the principles emerging from the decisions in Heinz India Limited v. The State of Kerala [2023 (5) TMI 290 - SUPREME COURT] and Puma Ayurvedic Herbal Private Ltd. v. Collector of Central Excise [2006 (3) TMI 141 - SUPREME COURT], it can be seen that when a product contains pharmaceutical ingredients that have therapeutic or prophylactic or curative properties, the proportion of such ingredients is not invariably decisive, and what is of importance is the curative attributes of such ingredients that render the product 'medicament' and not a cosmetic. Although a product is sold without a medical practitioner's prescription and is available over the counter, it does not lead to the conclusion that they are cosmetics - A product used mainly in curing or treating ailments or diseases and containing curative ingredients, even in small quantities, is to be branded as a medicament. The dominant use to which the product is being used certainly has a bearing. It is also to be seen that whenever a product has curative or prophylactic value as well, but the revenue still wants the said product to be brought under a different Chapter, the onus is on the revenue to show that it is not a medicament; the revenue will have to demonstrate that curative or prophylactic value is only subsidiary in nature or that the description covers the product under the Chapter wherein it is sought to be excluded. The product in the instant case normally should have come under Chapter 30 but for the specific exclusion under Note to Chapter 30 - it is also found that if a product is registered as a medicament by the Drugs Controller, that would be a strong factor to consider it as having curative or prophylactic value as a medicament. The department also did not discharge its onus of proving that the product cannot be classified as a medicament, though it certainly has attributes of a medicament - it is also found that the clarification order accepts the classification accorded to the other products Clohex and Clohex Plus by the assessee, as medicament based on the fact that they were manufactured under a drug licence. However, there is no reason discernible from the clarification order as to why Senquel-AD Mouthwash which is presented in a similar form cannot also be classified as a medicament more so when the Central Excise authorities had accepted the said classification during the relevant period. Since the clarificatory authority did not consider these aspects, it is deemed appropriate to remit it to the same authority to consider all the above aspects in the first instance. Accordingly, the impugned order (Order No. C3/26631/13/CT) of the authority for clarification dated 09.01.2015 set aside and matter remitted to the said authority for fresh consideration. Appeal allowed by way of remand.
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