9911796707
TMI Blog2008 (5) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... thority did not accept this claim of the revisionist and held that both "bubble gum" and "Swad" tablets were unclassified items and were taxable as such. In respect of sale of "painjon", the claim of the dealer was that it contains part of "paracetamol" waste. The claim of the assessee was not accepted by the assessing authority in this regard also and all the three items were assessed to tax at the rate of 10 per cent. The dealer filed first appeal before the Deputy Commissioner (Appeal), Trade Tax. The Deputy Commissioner concurred with the claim of the revisionist and allowed the appeal. The tax liability was reduced accordingly. The department felt aggrieved and filed second appeal before the Trade Tax Tribunal, Ghaziabad. The Trade Tax Tribunal by the impugned judgment and order dated May 14, 2001, partly allowed the appeal. The Tribunal agreed with the finding of the first appellate authority that "painjon" was medicine of the Schedule and was taxable at the rate of 7.5 per cent (with additional tax). So far as taxability of "Swad" tablets and "bubble gum" is concerned, the Tribunal held that "Swad" tablet was not confectionery item and it was an unclassified item liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department. Since no application under section 5 of the Indian Limitation Act was filed along with the memo of appeal by the department before the Tribunal, the applicant filed objection in regard to delay in filing the appeal before the Tribunal categorically stating that the first appeal was decided long back, i.e., on May 15, 1998 and copy of the judgment in the said appeal was served upon the departmental authorities on July 25, 1998 and an endorsement to this effect was made. Therefore, it was wrongly stated before the Tribunal that the true copy of the judgment of the first appellate authority was received by the office of the respondent-authority on August 25, 1998. Though Sri B.K. Pandey, learned Standing Counsel, has stated that he is not aware of the correct facts but it is argued that there is no affidavit in support of such allegation and besides this the copy of the judgment filed with the memo of revision shows that Second Appeal No. 357 of 1999 was decided by the Tribunal. This clearly shows that even if defective Appeal No. 31 of 1998 was registered the defect was subsequently removed and regular Appeal No. 357 of 1999 was registered. There is substance in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent of the Tribunal. The decision given by the one Bench of the Tribunal is decision of the Tribunal constituted under section 10 of the Act. It is expedient that different Benches should not take different views on the same question of law otherwise there would be an occasion of judicial anarchy. At least subordinate authorities would be confronted with difficulty as to which of the decisions of the Tribunal should be followed. It may be pointed out that sub-section (9) of section 10 of the Act provides that the members of the Tribunal shall sit in such Benches of one, two or more members, as may be constituted from time to time, and do such work of the Tribunal as may, subject to sub-section (10) and the Rules, be allotted to them, by order or in accordance with the directions of the President of the Tribunal. Sub-clause (d)(i) of sub-section (10) of section 10 of the Act provides that the President may, if he so thinks fit direct an appeal to be heard and decided by a larger Bench. In view of these provisions of law if the Trade Tax Tribunal in question did not agree with the view taken by another Bench of the Tribunal as already pointed out above it would have been proper for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. While considering the notification under which exemption was claimed the honourable Supreme Court held that "it is true that dictionary meaning of the word 'sweetmeat' is very wide and any food which is sweet and rich in sugar can be described as 'sweetmeat'. Toffee is a confection of sugar and other materials and being rich in sugar would be 'sweetmeat' in its wider sense. But for deciding whether toffee is 'sweetmeat' as contemplated by the exemption notification, what is required to be considered is the object of the notification and the context in which that word is used in the notification. A close reading of the notification discloses that the State intended to give benefit of exemption or reduction in rate to those new industrial units and existing units undertaking expansion, diversification or modernisation which were to make substantial capital investment . . . Entry 18 of annexure II is also suggestive of the same intention. The items mentioned therein, viz., 'sweetmeat', 'namkin', 'reori' and 'gazak' are usually prepared by shopkeepers and restaurants for selling them to their consumer/customers. They are not manufactured in factories having plants and machinery. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -coated. Thus, the Central Excise Tariff Act treats the "chewing gum" as confectionery and the said Act being the Central Act would be applicable to the State of U.P. In my view, therefore, though "chewing gum and bubble gum" cannot be treated to be "sweetmeat" but it is certainly an item of confectionery and is to be taxed as such. Undisputedly the rate of tax on confectionery is 7.5 per cent (with additional tax). Another ground on which the Tribunal took the view that "bubble gum or chewing gum" is not "sweetmeat" or confectionery is that the Commissioner of Sales Tax in a decision given under section 35 in the case of Newtrine Chewing Gum Products Company Pvt. Limited [1985] STI 21 held that "in chewing gum sugar is an almost insignificant . . . over it is not eatable. Its use is entirely different. Children use it just for a fun and athletes for controlling the breath. In common parlance also nobody treats it as an item of confectionery. I, therefore, hold that chewing gum is an unclassified item". This decision of the Commissioner, U.P. Trade Tax Act under section 35 could not hold good in view of the decision of the Tribunal in Gum India Limited [1996] STD 124 (Trib.-Kanpur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these systems of medicines and specified in the First Schedule of the Drugs and Cosmetics Act, 1940. 'Ayurvedic formullary of India' has stated in its preface, introductory chapter and the 'legal notice' chapter that the ayurvedic products should be prepared strictly as per formulae given in the authoritative text books or as per formulae given in it. The petitioner has not pointed out the formula of 'Bhav Prakash' which has been adopted for manufacturing 'Swad'. It is not manufactured strictly in accordance with the formula given in it. . . . . 10.. The true character of a preparation cannot be ascertained from the description of the product in the advertisement or label as an ayurvedic medicinal preparation. To decide this, one shall have to look to the character of the constituents and the use of the product [Dandwala v. State of Gujarat [1993] 88 STC 459 (Guj)]. It is usual for a manufacturer who sells his products to exaggerate the virtues of his product but it is not safe to rely on all these claims. Mere obtaining licence under certain Acts and getting clearance under certain other Acts cannot entitle a person to obtain benefits under an Act which has nothing to do with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stituents of the "Swad" tablets and it is pointed out according to the observation of the Tribunal that the ingredients of the commodities in question are "black salt", "senddha salt", "nambuka namak", "kali much", "jeera", "ajwain", "sonth" "peppermint", sugar, etc. True it is that the above ingredients of the "Swad" tablets are mentioned in the order of the Tribunal but that would not make it an ayurvedic medicine unless it is shown that it is prescribed by the physician in a particular ailment or it is beneficial in certain types of ailments. Sometimes confectionery items are produced by mixing various ingredients in order to give a special taste to the preparation. I am, therefore, of the view that the Tribunal has wrongly held that "Swad" tablet is a non-Schedule medicine and taxable at the rate of 7.5 per cent (10 per cent with additional tax). Having considered the arguments advanced by the learned counsel for the parties, I am of the view that the revision deserves to be allowed. The revision is hereby allowed. The order of the Tribunal is set aside and that of the first appellate authority is restored. Excess tax, if any, deposited by the revisionist shall be refunded to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the category of a sweet. This court in the case of Pappu Sweets and Biscuits v. Commissioner of Trade Tax, U.P., Lucknow [1998] 7 SCC 228 See [1998] 111 STC 425 (SC)., observed thus: "12 See para 11 at page 432 of [1998] 111 STC.. '. . . there is no doubt that a toffee is a sweetmeat, as understood by the people where toffee originated' and that 'toffee and other things of that nature are of foreign origin and are sweets or sweetmeat according to those people and their nature cannot be changed simply because their origin is different from what is usually conveyed by the word "mithai" in this part of the country', the High Court preferred to decide the issue by relying upon how toffee is understood by the people of the country where it originated rather than by considering how 'toffee' is understood in India and more particularly in the State of U.P. As held by this court in Collector of Central Excise v. Parle Exports (P) Ltd. [1989] 1 SCC 345 See [1989] 75 STC 105 (SC). at page 357, para 17 See at page 116 of [1989] 75 STC.: 'The words used in the provision, imposing taxes or granting exemption should be understood in the same way for which they are understood in ordinary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mithai). In fact, bubble gum is not an item for eating. It is kept in the mouth and after chewing the same is thrown out. The bubble gum while kept in the mouth by the children is also inflated as a balloon. In fact, it is used as a "mouth freshener ". It is not made only of sugar. It contains gum base, vexes, etc., along with sugar. According to Wikipedia, the encyclopedia, bubble gum is a type of chewing gum especially designed for blowing bubbles. The Commissioner, Sales Tax, U.P., has relied on the judgment in Nutrine Chewing Gum Products Co. P. Ltd., Arya Nagar, Lucknow [1985] STI 21 and observed that: "In chewing gum, sugar is an almost insignificant . . . over it is not eatable. Its use is entirely different. Children use it just for a fun and athletes for controlling the breath. In common parlance also nobody treats it as an item of confectionery. I, therefore, hold that chewing gum is an unclassified item." Thus, it is clear that chewing gum and bubble gum do not fall in the category of sweetmeat (mithai). The learned appellate court has relied on the judgment dated April 4, 1998 delivered by the Sales Tax Tribunal in Second Appeal No. 449 of 1992 titled Gum Products P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s preferred this appeal. The dispute is confined to the assessment year 1994-95. According to the respondent, bubble gum was covered by the specific entry at Sl. No. 48 of notification dated September 7, 1981 as amended by notification dated March 31, 1992. The said entry No. 48 reads as under: "Sweetmeats, namkins, cooked food, rewari, gajak, biscuits, bread, cakes, pastries, buns, rusks and sugar products, except any of the aforesaid goods which are exempt under any other notifications issued under Uttar Pradesh Sales Tax Act. " The learned counsel for the respondent made serious efforts to demonstrate that the bubble gum should be classified in the category of "sweetmeat". He frankly conceded that the High Court gave a specific finding that the bubble gum cannot be treated as sweetmeat and that finding was not challenged by the respondent. The learned counsel for the respondent submitted that the bubble gum contains 60 per cent sucrose by weight and it being a product of sugar, it should come in the category of sweetmeat. The respondent submitted that the expression "sugar products" has not been defined. It would mean and cover any product which is very rich in sugar. A pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
