TMI Blog2005 (12) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... of Maharashtra. 3.. On December 1, 1990, the assessee made an application to the Commissioner of Sales Tax, Bombay, under section 52 of the BST Act seeking determination of the question as to whether the sale of saffron in the State is exempt from the payment of sales tax. The determination sought was with reference to the sale bill No. 69055 dated November 23, 1990 annexed to the said application. The said sale bill pertained to the sale of 10 boxes of saffron by the assessee to Puranchand Sons, Kirana Merchants, Nanapet, Pune-2. According to the assessee, the saffron is an ayurvedic medicine in the natural form covered under entry No. 214 of the exemption notification issued under section 41 of the BST Act, attracting sales tax at 4 per cent. 4.. The Deputy Commissioner of Sales Tax to whom the said application was assigned, heard the matter and by his order dated August 20, 1991 held that saffron is not an ayurvedic medicine and as such, it is not covered by the scope of entry No. 214 of the notification issued by the Government and that the saffron would be covered under entry No. 78 of Schedule C, Part II as "culinary and flavouring essences". Accordingly, the Deputy Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction between the substances which are medicines themselves and substances which have medicinal properties. The fact that kesar has medicinal properties does not make it to be an ayurvedic medicine in the natural form covered under entry No. 214 of the exemption notification issued under section 41 of the BST Act. The adjudicating authority has also quoted from the book written by Chopra which reads as under: "In European medicines 'saffron' is used to a very limited extent. If at all, it is used mainly in cookery as a colouring and flavour material." Counsel submitted that even in India saffron is mainly used in cookery as a colouring and flavouring material in the manufacture of kesarbhaat, shrikand and other sweets. Therefore, for the purposes of sales tax saffron was included with spices under entry C-II-13. He submitted that on deletion from entry C-II-13, the saffron would be appropriately classifiable under entry C-II-78 and the Tribunal was in error in holding that saffron would be covered under exemption entry 214 as an ayurvedic medicine in the natural form. 9.. Mr. Badheka, learned counsel appearing on behalf of the assessee, submitted that it is well-settled in la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emption entry No. 214 of notification issued under section 41 of the BST Act. She submitted that like ayurvedic and unani drugs, kesar cannot be used by itself by swallowing it or eating it. Therefore, most of the ayurvedic drugs which are potent in the natural form are used either after powdering, grinding and taken along with honey, milk, water, ghee, butter, etc. Accordingly, she submitted that kesar which is used in preparations like kesari jeevan and other similar ayurvedic preparations is an ayurvedic medicine covered under exemption entry No. 214 issued under section 41 of the BST Act. Even if kesar is a colouring and flavouring agent, entry C-II-78 pertains to flavouring essences and not to flavouring agents and, therefore, kesar cannot be said to be covered under entry C-II-78. 12.. Relying upon the decision of the apex Court in the case of Kamala Ganapathy Subramaniam v. Controller of Estate Duty reported in [2002] 253 ITR 692, counsel for the assessee submitted that in a reference it is not open to this Court to re-appreciate the evidence and, therefore, the decision of the Tribunal which is based on cogent evidence adduced by the assessee is liable to be confirmed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to time reads as follows: 13. Spices of all kinds including pepper, saffron but excluding those covered by entry 10 in Schedule A. 6% 6% 1-7-1981 to 31-8-1990 13. Spices of all kinds "including pepper but excluding saffron" and those covered by entry 10 of Schedule A. 6% 6% 1-9-1990 to 30-4-1992 13. (1) Dhania, Methi and Suva when sold in powder form in sealed container and under a registered trade mark. 2% 2% 1-5-1992 to 8-9-1992 (2) "Spices of all kinds including pepper but excluding saffron, spices covered by sub-entry (1) and those covered by entry 10 of Schedule A. 6% 6% 1-5-1992 to 8-9-1992 13. Spices of all kinds including pepper, but excluding saffron and those covered by entry 10 of Schedule A. 6% 6% 9-9-1992 to 31-3-1994 13. (1) Dhania, methi and suva when sold in powder form in sealed container and under a registered trade mark. 2% 2%' 1-4-1994 to 30-9-1995 (2) Spices of all kinds including pepper but excluding spices, covered by sub-entry (1) and tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l ayurvedic medicines in the natural form were exempted from payment of sales tax/purchase tax in excess of 4 per cent from June 25, 1985. 15.. It is pertinent to note that even after exemption entry 214 was issued on June 25, 1985, the assessee continued to pay tax on sale or purchase of saffron at the rate prescribed under entry C-II-13 and it is only on deletion of saffron from entry C-II-13 with effect from September 1, 1990, the assessee sought to contend that sale or purchase of saffron is covered under entry 214 of the exemption notification issued under the BST Act and the same has been accepted by the Tribunal. 16.. The contention of the assessee that after saffron was excluded from entry C-II-13 from September 1, 1990, the same would be covered under exemption entry 214 from September 1, 1990 is without any merit. If at all saffron was an ayurvedic medicine in the natural form, then, as per notification entry 214 the tax payable on sale or purchase of saffron from June 25, 1985 would be 4 per cent and not the rate specified in entry C-II-13. The very purpose of issuing the notification entry 214 on June 25, 1985 was to give relief on sale or purchase of all ayurvedic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not used in food preparations and sweets as an ayurvedic medicine. There is no material on record to show that saffron has only therapeutical value. Even the books/notifications relied upon by the assessee which are referred to in the order of the Tribunal do not set out therapeutical value of saffron as an ayurvedic medicine. Therefore, merely because, saffron finds place in some of the books the Tribunal ought not to have held that saffron is an ayurvedic medicine in the natural form. Similarly, the fact that saffron is now a days increasingly used in the ayurvedic preparations would not qualify saffron for being considered to be an ayurvedic medicine in the natural form. In our opinion, the decision of the Tribunal in holding that saffron is an ayurvedic medicine in the natural form even though it does not have any therapeutical value is patently erroneous and cannot be sustained. 21.. Strong reliance was placed by the counsel for the assessee on the decision of the apex Court in the case of Vicco Laboratories [1993] 68 ELT A-47. In our opinion, that decision is wholly distinguishable on facts. Firstly, the decision of the apex Court in the case of Vicco Laboratories [1993] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the saffron sold in the market cannot be consumed directly and is used in small quantities in food preparations. Therefore, saffron is nothing but a colouring and flavouring essence. Hence, no fault could be found with the decision of the adjudicating authority in classifying saffron under entry C-II-78. 23.. It is pertinent to note that in the present case it is not the case of the assessee that after September 1, 1990 saffron falls in some entry other than entry C-II-78. The contention of the assessee is that on being deleted from entry C-II-13, saffron would be covered under exemption entry 214 issued under section 41 of the BST Act. There is no merit in this contention. By the exemption notification tax payable on ayurvedic medicines in the natural form, covered under different entries in the Schedule to the BST Act is restricted to 4 per cent. Therefore, to claim benefit under exemption 214, it must be shown that saffron is an ayurvedic medicine in the natural form and that the tax payable on saffron under the Schedule to the BST is more than 4 per cent. Only then, the benefit of the exemption notification entry 214 can be availed. In the present case, the assessee has fai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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