TMI Blog2018 (2) TMI 1816X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration in this revision is answered against the revenue and in favour of the assessee - revision dismissed. - SALES/TRADE TAX REVISION No. - 411 of 2017 - - - Dated:- 19-2-2018 - Mr. Ashwani Kumar Mishra, J. For The Applicant : Bipin Kumar Pandey For The Opposite Party : Nishant Mishra ORDER Hon'ble Ashwani Kumar Mishra,J. 1. Revenue is before this Court in revision against an order of the Commercial Tax Tribunal, Ghaziabad dated 5th May, 2017 passed in Second Appeal No.1674 of 2014. Proceedings relate to assessment year 2009-2010 (UP) under Section 28(2) of the U.P. VAT Act. Tribunal by its order has allowed the second appeal of the assessee. Issue raised in this revision is confined to classification of two products i.e. (i) Chlormint with Herbasol and (ii) Happydent White. Tribunal has accepted claim of assessee that 'Chlormint with Herbasol' and 'Happydent White' are ayurvedic medicines manufactured pursuant to drug licence issued under the Drugs and Cosmetics Act, 1940 (hereinafter referred to as 'Act of 1940') and are thus liable to be taxed @ 4% in view of Item 41 of Part 'A' in Schedule-II to U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -(1) of section-4 of the Uttar Pradesh Value Added Tax Act, 2008} List of goods taxed at 12.5% S.No. Name and description of goods 1 2 1 All goods except goods mentioned or described in Schedule-I, Schedule-II, Schedule-III and Schedule-IV of this Act. 3. In the context of the issue raised, the following question is framed for consideration in the present revision:- Whether on the facts and in the circumstances of the case the Commercial Tax Tribunal was legally justified in holding that chlormint herbasol and happydent white as medicine and not an unclassified commodity? 4. Sri A.C. Tripathi, learned Standing Counsel for the Revenue has taken the Court through the order of the Tribunal, as also the orders passed by the first appellate authority and the assessing authority in respect of the products in question. Learned Standing Counsel submits that the two products are actually mouth freshener and are similar to Chewing gum/Bubble gum, which are confectionery items liable to be taxed under the residuary ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the authoritative books of Ayurveda, Siddha or Unani Tibb systems of medicine specified in the First Schedule, but does not include a medicine which is administered by parental route and also a formulation included in the authoritative books as specified in Clause (a). ( ii) in relation to any other systems of medicine. . . 9. In Commissioner, Trade Tax/Commercial Tax Vs. Perfetti Van Melle (India) Pvt. Ltd. (supra), the Division Bench of Uttarakhand High Court examined relevant literature in order to ascertain as to whether the product in question is drug and medicine. Paragraphs 9 to 12 of the judgment throws light on the issue and are reproduced hereunder:- 9. Authoritative books of ayurvedic and Siddha systems, are mentioned in Schedule A of the First Schedule of the Drugs and Cosmetic Act, 1940. Said list includes book titled 'Bhav Prakash'. Shri Sudhanshu Dhulia, learned Counsel for the respondent referred before us, item Nos. 70 and 73 of Schedule I of book titled 'Bhavprakashnighantu', written by Ganga Sahaye Pandey and Krishnachandra Chunekar. The entries in the Schedule of the said book describe qualities of peppermint and pudeena (spearm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. It is not disputed that even those products containing formulae of constituents prescribed by authorised books of medicines, which are not prescribed by doctors and not required to be purchased necessarily from the approved chemists are also medicines, provided the same are manufactured under the drug licence issued under the Drugs and Cosmetics Act, 1940. In the present case, the items-'Chlormint' and 'Happydent' are manufactured by the assessee/respondent under the drug licence issued to it by the Directorate of Ayurvedic Medicines of State of Haryana. As to the formulations, the quantity of 'Chlormint with herbasole' and 'Happydent' are also mentioned in the covers they are sold (as is apparent from annexures filed with counter-affidavit). As to the utility of 'Chlormint with herbasole' as mouth fresheners and that of 'Happydent' (white baking soda with mint flavour) to keep the teeth clean, are also not disputed. Only for the reasons these items are also purchased by some customers for taste also, does not make them confectionary items particularly when the same are manufactured under a valid drug licence. As such, having heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not by itself lead to the conclusion that it is not a medicament and that merely because the percentage of medicament in a product is less, does not also ipso facto mean that the product is not a medicament. This Court further held as under:- It is settled law that the onus or burden to show that a product fall within a particular Tariff Item is always on the revenue. Mere fact that a product is sold across the counters and not under a Doctors 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 also ipso fact 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 cold 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Drug Controller. It is also not disputed that revenue has not placed any contra evidence in the matter. The fact that product is manufactured under a drug licence and that authorities under the Act of 1940 have treated it to be a medicament is a relevant factor. 17. In CCE Vs. Hindustan Lever Ltd. (supra), the Apex Court was examining whether Vaseline Incentive Care Heel Guard is a skin care preparation or is a medicament. The product was manufactured upon a licence issued by the Drug Controller. In this context, following observations were made in para 10 of the judgment:- 10. The aforesaid case draws and delineates a clear distinction between a 'cosmetic' and a 'drug'. It further lays down that essential character of the product in question is to be kept in mind for ascertaining whether it would be a cosmetic or a drug. Another relevant consideration, which is highlighted, is to see whether in common and commercial parlance the product is known as medicine or cosmetic/skin care product. If the product is registered as medicament by the Drug Controller, that would be a strong factor to consider it as having curative or prophylactic value and it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urved Bhawan (supra), the Apex Court was examining two competing entries occurring in Chapter 30. Chapter 30 specified Pharmaceutical Products. Vide Note 1 (d) preparations of Chapter 33 were excluded even if the product had any therapeutic or prophylactic properties. Sub-heading 3306 provided for preparation for oral or dental hygiene, including dentifrices etc. It was in this context that 'common parlance test' was applied by the Apex Court to determine under which of the two competing entries the product itself would fall. Relying upon Puma Ayurvedic (supra) the Apex Court observed as under in para 42:- 42. There is no doubt that a specific entry must prevail over a general entry. This is reflected from Rule 3(a) of the general Rules of interpretation that states that heading which provides the most specific description shall be preferred to headings providing a more general description. DML is a tooth powder which has not been held to be Ayurvedic Medicine in common parlance in Baidyanath I1. We have already observed that common parlance test continues to be one of the determinative tests for classification of a product whether medicament or cosmetic. There being ..... X X X X Extracts X X X X X X X X Extracts X X X X
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