TMI Blog2005 (10) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... c item. He submitted that on the basis that it is used for protection of skin, Tribunal has illegally held it as medicine. He submitted that Himani boroplus has been held as Cosmetics by this Court in the case of M/s. Balaji Agency, Gorakhpur v. CST, reported in 1994 UPTC 184 as cosmetics. Learned counsel for the dealer opposite party (hereinafter referred to as the dealer ) submitted that in the manufacturing of boroplus drug licence is required. He submitted that it is used to avoid dryness and fishers of skin and Tribunal has rightly held as medicines. In support of his contention he relied upon the various decisions namely Union of India and others v. G.D. Pharmaceuticals Limited and another reported in 118 STC 19, Commissisoner of Commercial Taxes, West Bengal and another v. West Bengal Commercial Taxes Tribunal reported in 89 STC 355, G.D. Pharmaceuticals Ltd v. State of West Bengal and others reported in 1998 UPTC 1205, Commissioner of Commercial Taxes, Madhya Pradesh v. Dawar Brothers, Indore reported in 1998 UPTC 1211 and United Trading Agency v. Additional Commissioner of Commercial Taxes, Zone II, Bangalore reported in 104 STC 182. It is useful to refer the relevant not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance. The World Book Encyclopedia Volume 4 Cosmetics are substances applied to a person s body to cleanse, promote attractiveness, or alter the appearance. Cosmetics include underarm deodorants, face powder, lipstick, nail polish, perfume, skin creams, most shampoos and some toothpastes. The New Shorter Oxford English Dictionary The art of adorning or beautifying the body. A preparation for use in beautifying the face, skin, or hair. Intended merely to improve appearances; superficial. The Law Lexicon Dictionary Cosmetic. A preparation to be applied to human body for the purpose of beautifying, preserving or cleansing. The New Encyclopaedia Britannica Cosmetic, any of several preparation (excluding soap) that are applied to the human body for beautifying, preserving, or altering the appearance or for cleansing, colouring, conditioning, or protecting the skin, hair, nails, lips eyes, or teeth. Some of these products are of great antiquity, others areofrecent development. Words and Phrases Permanent Edition Cosmetic. Is any external application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlance. In the case of Collector of Customs, Bombay v. Swastic Woollen (P) Ltd., reported in 1988 (37) E.L.T. 474 (S.C.) = AIR 1988 SC 2176. Hon ble Apex Court held in para 4 We are of the opinion that when no statutory definition is provided in respect of an item in this Customs Act or the Central Excise Act, this trade understanding, meaning thereby the understanding in the opinion of those who deal with the goods in question is the safest guide. 9. In the case of Commissioner of Sales Tax v. Sarin Chemical Laboratories reported in 24 STC 406, the question was whether the toothpaste and tooth powder was medicine or toilet requisite or medicine. The Division Bench of this Court held that it is a matter of common knowledge that toothpaste or tooth powder is an essential item of toiletry in the modern life. The Division Bench held as follows : It is a matter of common knowledge that tooth paste and tooth power is an essential item of toiletry in modern life. The manufacturers of dentifrices like tooth paste, tooth powder invariably claim medicinal property for their products and some of them do possess prophylactic and remedial properties but whether they do or do not posses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... medicine. Disease means an impairment or the normal state or the living animal that interrupts or modifies the performance of the vital functions being a response to environmental factors (as malnutrition, industrial hazards, or climate) or to specific infective agents (as worms, bacteria, or viruses) or to inherent defects of the organism (as various genetic anomalies) or to combinations of these factors. The process of shaving does not cause any kind of impairment of the normal state of a person, it does not in any manner interrupt or modify the performance of any vital functions of the human body. 12. In the case of Shree Baidyanath Ayurved Bhawan Pvt. Ltd. v. Collector of Central Excise reported in 1991 (51) E.L.T. 502, the Apex Court held that Lal Dant Manjan which is being used for cleaning teeth only, is not a drug or ayurvedic medicine. The relevant portion is quoted below : Cleaning teeth being an Act of daily toilet, dentifrices produced in the form of tooth powder used for cleaning teeth would be an article of Toilet as held by the Bombay High Court in the case of Commissioner of Sales Tax v. Vicco Laboratories, 22 STC 169. Madras High Court in the case of V.P. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd sold by a person dealing in medicines and according to a process more complex than used in the manufacture of ordinary hair oil. The object of all hair oils is to tidy the hair, to promote luxuriant growth of hair and to prevent dandruff and falling hair and it cannot be denied that if a hair oil produce the effects proclaimed and claimed in regard to it, then the appearance of the person using it is undoubtedly improved. We have no doubt that the hair oil manufactured by the assessee is a toilet article and falls also within the meaning of the term cosmetics . 14. In the case of Commissioner of Sales Tax v. Raj and Co., reported in 1985 UPTC 503 the Single Judge of this Court has held that merely because hair oil was manufactured out for several herbs having medicine properties it cannot be said the oil was in the nature of medicine. Learned Single Judge has relied upon the judgment of Madhya Pradesh High Court in the case of Commissioner of Sales Tax v. Shri Sadhna Aushdhalaya, reported in 14 STC 813 (supra) and in D.K. Sandu Bros. v. The State of M.P., reported in 4 STC 397 (supra). This court has observed as follows : whether the oil manufactured by the assessee is o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but as understood in common parlance, vide Ramavatar Budhai Prasad v. Assistant Sales Tax Officer. The word medicine appearing in Entry-13, Schedule-C, will therefore, have to interpreted not in a technical sense but as understood in common parlance. In its popular sense, medicine is a remedial agent, a substance which may be sold in various forms such as liquid, tablets, capsules or powder, which is administered in the treatment of disease and which has the property of curing or remedying disease. This meaning also accords with the dictionary meaning to which we have just referred above. If this is the true meaning of medicine in popular parlance, many articles which may not be medicine technically or strictly so called would be covered by the wide ambit of the word medicine and we see no reason why Nycil powder, with its special qualities and attributes, its character and composition and its recommended or intended use as advertised by the manufacturers would not be covered within the meaning of the word medicine as understood in popular parlance . 17. In the case of Commissioner of Sales Tax v. S.S. Balsara Hygiene Products Ltd., reported in 1986 UPTC 367, Odomos ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, medicines. Every cosmetic usually has some medicinal properties for the care of the skin, teeth, hair etc. and simply because they have some medicinal properties, they cannot be treated as medicines. Whether a thing is cosmetic or medicine has to depend on its general use and such creams are generally used for skin care and not for treatment of any disease of skin. I, therefore, do not find any force in the contention that the Tribunal, was in error in holding these items to be cosmetics. 20. Much reliance has been placed on the decision of the Apex Court in the case of Union of India and others v. G.D. Pharmaceuticals Limited and another reported in 118 STC 19 in which Boroline has been treated as medicine and not as cosmetic or a toilet preparation under the Central Excise Tariff Act, 1985. In the said case, the Apex Court observed, the contextual facts reveal that the product in question contains Boric acid with Zinc oxide which cannot possibly be termed to be a cosmetic item. In any event, the learned Trial Judge has gone into the matter very carefully and detailed out the reason for his conclusion that Boroline cannot but be termed to be a medicine and not a cosmetic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o read the opinion of the majority Bench and the minority opinion of the Technical Member. It is a settled law that the onus or burden to show that a product falls within a particular tariff item is always on the Revenue. The mere fact that a product is sold across the counters and not under a doctor s prescription, does not by itself lead to the conclusion that it is not a medicament. We are also in agreement with the submission of Mr. Lakshmikumaran that merely because the percentage of medicament in a product is less, does not ipso facto mean that the product is not a medicament. Generally the percentage or dosage of the medicament will be such as can be absorbed by the human body. The medicament would necessarily be covered by fillers/vehicles in order to make the product usable. It could not be denied that all the ingredients used in Banphool oil are those which are set out in the Ayurveda text books. Of course, the formula may not be as per the text books but a medicament can also be under a patented or proprietary formula. The main criteria for determining classification is normally the use it is put to by the customers who use it. The burden of proving that Banphool oil is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard to Keo Karpin hair vitaliser, is concerned, it was found that it is used to prevent untimely fall of hair and to remove dandruff. 26. On the question of classification of product in the rival entries, Chapters 30 and 33 of the Central Excise Tariff Act, 1985, the Supreme Court in the case of Alpine Industries v. Collector of Central Excise reported in 2003 (152) E.L.T. 16 (S.C.) laid down the principles of classification after going through the Pharmaceutical and Medical Literature produced before it in respect of a product namely, Lip Salve . They are- (a) The certificate issued by the user (In that case the Army authorities) and the chemical ingredients of the product are not decisives on the question of classification of the product for levy of excise duty, (b) Commercial parlance has to be applied, (c) The mere fact that the product has some curative effect is not enough to classify the product as a medicament, (d) Rules of interpretation and chapter notes are the guides to determine classification of a product, (e) Preparation of chapter 33 even if they have therapeutic values are excluded from Chapter 30 [Note 1(d) to Chapter 30)] (f) Medicaments are defined in Note ..... X X X X Extracts X X X X X X X X Extracts X X X X
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