TMI Blog2016 (7) TMI 1057X X X X Extracts X X X X X X X X Extracts X X X X ..... ely, Mediker and Starch (Revive) after declining to entertain the stance of the assessee that Mediker being a drug Starch (Revive) being not a chemical, are not liable to levy of entry tax under the Madhya Pradesh Entry Tax Act, 1976, (for short the E.T. Act ), has been dislodged and both the products have been held not to be within the ambit of entry tax. 2. The facts giving rise to the present appeal are the respondent is a manufacturer of hair oil, edible oil, Mediker and Starch (Revive) and other products and is a registered dealer under the Madhya Pradesh Commercial Tax Act, 1994, as well as a dealer under the E.T. Act. The Assistant Commissioner, Commissioner Tax Division II, Indore vide order dated 28.04.2003 imposed entry tax on Mediker treating it as a hair shampoo and Revive Instant Starch as a chemical; and as the tax was not paid, interest and penalty were also levied. Being grieved by the aforesaid order the respondent-company preferred Review case No. 80/2003 before the Additional Commissioner, Commercial Tax, Indore. It was contended before the said authority that the entry tax imposed on the assessee on Mediker, which is meant for anti-lice treatment, was il ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the Revive starch is concerned, it is urged by Mr. Singh that it is a chemical covered by Entry 55 of Schedule II and consequently it is chargeable to entry tax. 4. Mr. Bagaria, learned senior counsel appearing for the assessee, in his turn, would argue that Mediker is a product meant for curing hair lice infection in hairs and the product is marketed as Mediker anti-lice treatment . It is urged by him that Mediker anti-lice treatment is manufactured after obtaining the drug licence under the Drugs and Cosmetics Act, 1940 (for short, the 1940 Act ) wherein it has been classified as a drug falling under Section 3(b) of the 1940 Act. It is contended by him that that Mediker anti-lice treatment satisfies the definition of the drug and after due scrutiny, the drug control authorities have granted licence for the said product as a drug. Mr. Bagaria would submit that period of treatment is four weeks and shampooing is only a method to apply the medicine. In essence, the submission of learned senior counsel is that the medium cannot determine the nature of the product. He has commended us to certain authorities of this Court as well as CESTAT which have been approved by this Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the louse is similar to the structure of human nail it has first to be made porous so that the active ingredient can penetrate and enter the louse and paralyse it; that for the purpose of treatment a wetting agent is needed and this wetting agent is the surface active agent used in Mediker; that the surface agent is nothing but a medium to convey the active ingredient on to the louse; and that the period of treatment is four weeks and the product is not used generally for washing the hair. 8. We shall presently consider the authorities cited at the Bar to appreciate the actual background. In G.S. Pai (supra), the Court was considering what meaning is to be placed on Bullion and Specie in the light of the provisions of the Kerala General Sales Tax Act, 1963. In that context, the Court observed that:- Now there is one cardinal rule of interpretation which has always to be borne in mind while interpreting entries in sales tax legislation and it is that the words used in the entries must be construed not in any technical sense nor from the scientific point of view but as understood in common parlance. We must give the words used by the legislature their popular-sense m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in Shree Baidyanath Ayurved Bhavan Ltd.-I (supra). The assessee approached the Board regard being had to the amendment to decide the classification of the product. Thereafter the dispute arose with regard to the classification. Mr. Singh has drawn our attention to paragraph 46 of the decision in Shree Baidyanath Ayurved Bhavan Limited-II (supra) to emphasise on the common parlance test. We think it appropriate to reproduce the entire paragraph:- As a matter of fact, this Court has consistently applied common parlance test as one of the well-recognised tests to find out whether the product falls under Chapter 30 or Chapter 33. In a recent decision in Puma Ayurvedic Herbal (P) Ltd. v. CCE (2006) 3 SCC 266 this Court observed that in order to determine whether a product is a cosmetic or medicament, a twin test (common parlance test being one of them) has found favour with the courts. This is what this Court observed: (SCC pp. 269-70, para 2) 2. In order to determine whether a product is a cosmetic or a medicament a twin test has found favour with the courts. The test has approval of this Court also vide CCE v. Richardson Hindustan Ltd. (2004) 9 SCC 156 There is no disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x extra) FOR EXTERNAL USE ONLY MADE IN INDIA Expiry date 2 years from the date of Mfg. Batch No. 8969 Date of Mfg. 12/88. 11. The tribunal, as the judgment would show, analysed many an aspect and opined that:- 17. Considering the arguments advanced before us, we are convinced that a person infested with lice does not get relief by merely washing his or her hair with water or various types of shampoo which are available in the market. The life and habits of the louse seem to call for more drastic steps in orders to get rid of the lice. On the label it is claimed that if the hair is shampooed with Mediker and left for 3 minutes and the process is repeated, lice are eliminated. The label also shows that Madiker consists of D-Phenothrin and other ingredients. The penetrating power of D-Phenothrin whereby it paralyses the lice was established before us during the course of hearing. The label itself immediately after the name of the product (Mediker) mentions anti-lice treatment . These show that Mediker is a special product made for the treatment of lice. The submissions made by the learned Advocate that the anti-lice treatment is not subsidiary to the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine or substance which treats disease or is a palliative or curative is therapeutic. Licel cures the infection or infestation of lice in human hair. It is thus therapeutic. It is also prophylactic inasmuch as it prevents disease which will follow from infestation of lice. Thus, this is a product which is used for therapeutic and prophylactic purposes. It would thus be a Medicament within the meaning of the term Medicament in Note 2 of Chapter 30. It therefore gets excluded from Chapter 38. 7. This view has also been taken by us in the case of ICPA Health Products (P) Ltd. v. Commissioner of C. Ex., Vadodara reported in 2004 (167) ELT 20. We are also in agreement with the opinion expressed by the Tribunal in Pharmasia s case (supra) wherein in respect of an identical product it has been set out that such product would fall under Chapter 30 under Tariff Heading 30.03. 14. In Puma Ayurvedic Herbal (P) Ltd. (supra) the distinction between medicament and cosmetic was highlighted in the following words:- It will be seen from the above definition of cosmetic that the cosmetic products are meant to improve appearance of a person, that is, they enhance beauty, where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Union of India v. Garware Nylons Ltd. (1996) 10 SCC 413 it has been held that the burden of proof is on the taxing authorities to show that the particular case or item in question is taxable in the manner claimed by them. Elucidating further, the Court has held that there should be material to enter appropriate finding in that regard and the material may be either oral or documents and it is for the taxing authority to lay evidence in that behalf even before the first adjudicating authority. Revive instant starch is used while washing the clothes. In common parlance it is not regarded and treated as a chemical or a bleaching powder. If the very substance or product would have a chemical composition, then only it would make the said substance a chemical within the meaning of Entry 55. Needless to say, the purpose and use are to be taken note of. Common parlance test has to be applied. If the revenue desired to establish it as a chemical, it was obligatory on its part to adduce the evidence. As is manifest, no evidence has been brought on record by the revenue that it is a chemical. Therefore, it can safely be concluded that it is not a chemical. 19. In view of the aforesaid ana ..... 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