9911796707
TMI Blog2007 (11) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... the U.P. Trade Tax Act. For the assessment year 1996-97, an assessment order dated February 2, 1999 was passed under rule 41(8) of the U.P. Trade Tax Rules, 1948 whereby some of the goods of the assessee, namely, Himani Boroplus Antiseptic Cream, Himani Gold Turmeric Cream, Himani Navratan Oil and Himani Boroplus Prikly-heat Powder as well as Himani Naturally Fair Cream and Himani Naturally Fair Lotion were treated as cosmetics. The case of the assessee was that these products do not come within the purview of cosmetics but ought to be classified as "ayurvedic medicines" as the ingredients of these products are mainly "ayurvedic " ingredients. Feeling aggrieved by the assessment order dated February 2, 1999, the assessee filed an appeal under section 9 of the Act before the Deputy Commissioner (Appeals). When the assessee filed appeal before the first appellate authority, the assessee filed certain evidences, which were filed in its reply before the assessing authority. The evidences, which were filed in the shape of 13 documents, are detailed hereinbelow: (1) Photocopy of drug licence dated August 9, 1992 showing productionwise details of ayurvedic medicines: (2) Cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee were not medicines but were cosmetics. Being aggrieved by the appellate order, the assessee-dealer preferred second appeal under section 10 of the Act before the Trade Tax Tribunal, Kanpur, who passed a common order on October 21, 1999 which is the impugned order in the present revision. The Tribunal has set aside the order of the first appellate authority by holding that the products of the assessee including Himani Naturally Fairness Cream and Himani Naturally Fairness Lotion were medicines and not cosmetics. Being aggrieved by the second appellate order, the State has filed the present revision. The questions of law sought to be referred in the revision are as below: Whether the Trade Tax Tribunal had properly and correctly applied the test of the user and common parlance as prevalent in the commercial world while deciding the taxability of the goods in question? Whether the Trade Tax Tribunal was legally justified in placing the reliance upon only literature furnished by the dealer in respect of the goods in question? The other question was raised for reference by way of amendment application, which reads as under: Whether the Trade Tax Tribunal was legally ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were medicines as the evidence was given from every conceivable quarter. The evidence so given has not been disputed by any of the authorities at any stage but rather the evidence produced before the authority was accepted at every stage. He further argued that the Revenue led no evidence of any sort to rebut the evidence led by the assessee. He further argued that the burden of showing correct classification lies on the Revenue alone but the Revenue failed to discharge this burden. In order to substantiate this argument, learned counsel for the assessee has relied on three decisions of the honourable Supreme Court, namely, Puma Ayurvedic Herbal (P.) Ltd. v. Commissioner, Central Excise reported in [2006] 145 STC 200; [2006] 3 SCC 266 and has relied on paras 19 and 20 of this decision. "19. The word 'medicament' is not defined anywhere while the word 'cosmetic' is defined in the Drugs and Cosmetics Act, 1940 as under: '3. (aaa) A "cosmetic" means any article intended to be rubbed, poured, sprinkled or sprayed on, or introduced into, or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir Cream and Naturally Fair Lotion as medicines, is not recorded on the basis of any reason or after any discussion of the evidences, which were there. The second appellate order simply records that the evidence had been seen. No doubt the evidence may have been seen by the second appellate authority but it has failed to record even a single instance of the appreciation of any of the evidences. The second appellate authority has in one portion of its order recorded that the assessee had a licence under the Drugs and Cosmetics Act to produce these products. However that itself could not be said to be conclusive proof that the product was a medicine and not a cosmetic or vice versa. The holding of a drug licence could at most be a contributory factor and a factor or worthy of consideration but it could not form the sole basis for consideration of classification of items for the purpose of the chargeability of tax. The other conclusions as drawn by the Tribunal in the impugned order are also not supported by any discussion or not by any reason for coming to the conclusion reached by it in favour of the assessee that product was ayurvedic medicine and not cosmetic. In so far as the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t will not be an item of common use. A user will use it only for treating a particular ailment and will stop its use after the ailment is cured. The approach of the consumer towards the products is very material. One may buy any of the ordinary soaps available in the market. But if one has a skin problem, he may have to buy a medicated soap. Such a soap will not be an ordinary cosmetic. It will be medicament falling in Chapter 30 of the Tariff Act. (ii) Are the ingredients used in the product mentioned in the authoritative textbooks on ayurveda." The honourable Supreme Court in the case of Puma Ayurvedic Herbal (P.) Ltd. [2006] 145 STC 200; [2006] 3 SCC 266 has laid down the method under which the twin test has to be satisfied. Paras 7 and 8 of the Report are reproduced below: "7. This opinion coming from a competent and authorised source, is of great relevance so far as the case in hand is concerned. Besides this the evidence produced by the appellant before the authorities in the shape of letters from consumers, from doctors and from ayurvedic physicians satisfies the common parlance test. 8.. On the other hand, the Revenue led no evidence of any sort to rebut the evidence le ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
