TMI Blog2017 (1) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... because it is available in a tea stall or a betel shop or other various places where confectionery items are sold, does not change the character of an item. There is no evidence on record or authoritative material put on record by the AO so that it can be said to be a confectionery item and not a drug. The burden was on the Assessing Officer if according to the AO it was a confectionery item, and it did not lead any evidence or produced any material or evidence to discharge the onus. The Tax Board is just and proper and has rightly held that it is a Ayurvedic medicine with the rate applicable of 6% - petition dismissed - decided against the Revenue and in favor of the assessee. - S.B. Sales Tax Revision Petition No. 149, 151, 155, 156, 158/2005 - - - Dated:- 25-11-2016 - Jainendra Kumar Ranka, J. For the Petitioner : Meenal Ghiya For the Respondent : Alkesh Sharma ORDER 1. These petitions are directed against order dt 29.12.2004 passed by the Rajasthan Tax Board, Ajmer, where while the appeals filed by assessee were allowed, the appeals by revenue were dismissed. Since common issue is raised in the instant petitions, the same are decided by this common ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a candy and people have it just for the sake of fun, or as a mouth freshener, or for change of taste, and the ingredients mixed for preparation of Swad cannot be said to be Ayurved preparation. Thus, contended that both, the AO as well as the DC(A) had correctly applied the rate of 10% and the Tax Board was not justified in coming to its own conclusion, and submitted that the order of Tax Board is required to be reversed and that of the AO be upheld. 6. Per contra, learned counsel for the assessee contended that it is a Ayurvedic medicine and majority of the people, who suffer from stomach ailment does take it as a medicine and it cannot be said to be a confectionery item. If a consumer buys a candy, the shopkeeper will provide various kinds of toffee but will not give Swad . Learned counsel also contended that it does not make any difference about whether it is freely available in betel shop or any other tea stall but ultimately after taking into consideration the formula for preparation of the said medicine, the Tax Board has correctly applied that it is a Ayurvedic medicine where only a rate of 6% is applicable, and relied upon CCE, Chennai v. Hindustan Lever Ltd 2015 (24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts which is covered under the entry of confectionery would not make the assessee further liable to pay interest according to provisions of Section 11B(f) of the Rajasthan Sales Tax Act ? 9. It would be appropriate to quote the definition of Ayurvedic, Siddha or Unani drug, as given in Section 3(a) (b) of the Drugs and Cosmetics Act, 1940 :- (a) Ayurvedic, Siddha or Unani drug includes all medicines intended for internal or external use for or in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, and manufactured exclusively in accordance with the formulae described in, the authoritative books of Ayurvedic, Siddha and Unani Tibb systems of medicine, specified in the First Schedule; (aa) xxx xxx xxx xxx xxx (aaa) xxx xxx xxx xxx xxx (b) drug includes- (i) all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatment, mitigation or prevention of any disease or disorder in human beings or animals, including preparations applied on human body for the purpose of repelling insects like mosquitoes; (ii) such substances (oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he properties of the drug and in general practice there is no need to mention about the preservatives and binding agents, and before the High Court two opinions of the Divisional Officer, Ayurved, Indore Division, who was declared as an expert and according to him the medicine used in the product is Ayurvedic medicines, and as per the said opinion, the addition of and proportion of sugar and liquid glucose would not change the quality of the active agents in the product. It would also be appropriate to quote the relevant paras of the judgment, which reads ad infra :- 32. The Divisional Director, Bharatiya Chikitsa Padhati, has been declared as an Expert by the State Government, vide Gazette Notification dated 20th April, 1985 in exercise of the powers under Rule 154(2) of the Drug and Cosmetic Rules, 1945 and the other expert Dr. Sharma has also been so declared as an Expert. According to Dr. Sharma also liquid glucose is used in Ayurvedic medicines as preservative material and binding agent and the increase or decrease in the quantity of the binding agent or preservative does not change the nature of the medicine. In both the Expert opinions it has been said that the product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the field is available. It cannot be brushed aside lightly only because there is an averment that it is a confectionery. The deviations in the preparation as pointed out by the Central Excise Authorities were dealt with and considered by the Controller of Foods and Drugs, Government of M.P. and there is no contrary opinion of any Ayurvedic Expert to hold that the product is simply a confectionery and not a Ayurvedic product. Even in the Warner Hindustan Ltd's case (supra) decided by the CEGAT, on which much reliance is placed by the learned counsel for the Central Excise, the Authority has considered the Expert opinion and thereafter gave a finding that the expert opinion is of no avail to the manufacture in that case because the opinion of Dr. Rao was a second hand information and the qualifications of Dr. Rao were also not known to ascertain whether he was an Expert or not, coupled with the fact that there was no clinical test of the product. In the instant case the clinical test was made of the aforesaid product and after considering the result of the clinical test and the opinion of the Experts the finding of the product being an Ayurvedic product has been given. It has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as discussed above before the classification. Therefore, the extended period of five years of limitation under Section 11A is not available to the Collector, Customs and Central Excise. The notice Annexure P-19 in M.P. No. 1297 of 1989, is therefore, without jurisdiction and as such this Court could very well entertain a petition in a case where the notice is without jurisdiction. The notice Annexure P-19 is, therefore, quashed. The notices Ex. P-6, P-7 and P-8 issued by the authorities are as a sequel of the notice issued in M.P. No. 1297 of 1989 and in view of the finding given by us that the product is an Ayurvedic medicine, these notices also cannot be allowed to stand which were issued during the pendency of the first petition. Accordingly these notices also deserve to be quashed and are accordingly quashed. 12. The apex court did not entertain the SLP preferred by the Union of India and dismissed SLP (C) No.nil/1993 on 18.4.1994. 13. The burden was on the Assessing Officer if according to the AO it was a confectionery item, and it did not lead any evidence or produced any material or evidence to discharge the onus. Even the High Court of Karnataka in the case of Uni ..... X X X X Extracts X X X X X X X X Extracts X X X X
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