TMI Blog2020 (3) TMI 1317X X X X Extracts X X X X X X X X Extracts X X X X ..... will not be Cosmetics in common parlance. In the above view of the matter, contention raised by the petitioners with regard to Tooth Paste which is one of the products, for which clarification is sought for has to fail. Baby soap - HELD THAT:- Rule 23 of the Rules of Interpretation specifically excludes Soaps from the purview of Entry 36. In view of the fact that Soaps stand specifically excluded under Rule 23, we are not called upon to decide the question whether Baby Soap is a toilet article in common parlance or not. The clarification given in Annexure-IV order with regard to Soap also is therefore perfectly sustainable. Mouth Wash - Gift Packs - Ayurvedic Baby Powder - HELD THAT:- The issue with regard to the exigibility of tax at concessional rates under Sub Entry 27 of Entry 36 of the IIIrd Schedule with regard to Baby Powder, Baby Gift Pack and Mouth Wash are issues which require a reconsideration and a reasoned order at the hands of the clarificatory authority. The findings contained in Annexure A4 order of clarification with regard to Baby Soap and Tooth Paste as contained in the impugned order - With respect to other products the matter is remanded to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This entry shall be deemed to have come into force on the 13th day of November, 2009: Provided that the tax, if any, collected during the period from the 13th day of November, 2009 to the 31st day of March, 2012 shall not be refunded.) No HSN code was attached to the said sub entry. 3. Learned counsel for the appellant would contend that since the sub entry itself specifically referred to Ayurvedic Cosmetics containing added medicaments and manufactured under a drug licence granted under the Drugs and Cosmetics Act, 1940, all Ayurvedic products manufactured under a Drug Licence so granted, which contained added medicaments are liable to be included under the said Sub Entry and should be granted concessional rate of tax. Specific contention of the petitioner is that, cosmetics are a genre of which toiletries are a species and that as such, all toiletries and consumer articles produced by the appellant company under a valid licence under the Drugs and Cosmetics Act, which are not drugs per se would come within the definition of cosmetics and would be entitled to concessional rate of tax. Placing reliance on the definition of Cosmetics in the Drugs and Cosmetics Act, it is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Maharashtra S.B.O.S. and H.S. Educational and Another v. Paritosh: (1984 KLT SN 55 (C. No. 94) SC : AIR 1984 SC 1543), learned Senior Counsel would contend that, where under a specific Section or Rule, a particular subject receives special treatment, such special provision will exclude applicability of any general provision which might otherwise cover the said topic. The contention therefore is that, though soaps and other products containing added medicaments are excluded from the scope of Entry 36 by Rule 23 of the Rules of Interpretation, the subsequent introduction of Sub Entry 27 to Entry 36 would have the effect of including Ayurvedic Soaps with added medicaments and manufactured under a Drug Licence issued under the Drugs and Cosmetics Act from the purview of goods taxable at the default rate and would render such articles liable for tax only at the concessional rate. It is contended that, the manufacture of the goods in question under a licence issued under the Drugs and Cosmetics Act, is the deciding factor, since the Sub Entry specifically provides for the same. 8. Learned senior counsel would also rely on the decision of the High Court of Calcutta in Asiatic Oxy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2011 (1) KLT SN 49 (C. No. 66) SC : (2011) 2 SCC 601) and Shree Baidyanath Ayurved Bhavan Ltd. v. Commissioner of Central Excise, Nagpur ((1996) 9 SCC 402), it is contended that the Apex Court has repeatedly held that where there is no HSN Code attached to a product and when the terms used for the identification of the product do not have a definition under the fiscal statutes, the products have to be understood by applying the theory of common parlance. It is therefore contended that the issue with regard to Tooth Paste and Tooth Powder stands covered by decisions of the Apex Court, in as much as those articles have been specifically held to be toiletries in common parlance and not medicines or cosmetics. 11. Relying on the decision of the Apex Court in M/s. Sarin Chemical Laboratory v. Commissioner of Sales Tax, U.P. (1970 KLT OnLine 1242 (SC) : (1970) 2 SCC 403), it is contended that, the Apex Court had considered whether the product 'Sarin Tooth Powder' is a cosmetic or a toilet requisite and relying on the dictionary meanings of the words and the common parlance theory, held that the Tooth Powder is a toiletry article and not a cosmetic. In State of Gujarat v. Prak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is contended by the learned Government Pleader that, Sub-Entry 27 of Entry 36 was necessitated due to the finding of this Court in Sreedharareeyam Ayurvedic Medicines (P) Ltd. v. State of Kerala that, all Ayurvedic products would not be included in Entry 36 in view of the exclusion by Rule 23. It is contended that it was to grant the benefit to specific Ayurvedic Cosmetics which are manufactured under a Drug Licence that the Sub-Entry was included and that the petitioner's products which are not Ayurvedic Cosmetics would not entitled to the benefit of the same. The learned counsel also relies on the fact that the products of the petitioner are claimed to be Ayurvedic Proprietary Medicine and that the appellants themselves do not have a case that the products are cosmetics. 15. We have considered the contentions advanced from either side and have given our anxious attention to the documents on record and the statutory provisions as well as the decisions relied upon by either counsel. As stated above, the issue is with regard to interpretation to be given to Sub Entry 27 of Entry 36 of the IIIrd Schedule. Specific case of the appellant is that, if the definition of Cosmetic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otifications, there is no difficulty since the products and the interpretations on the basis of the HSN Codes would be applicable. However, in the case of Sub Entry 27 to Entry 36, there is no HSN Code provided. Contention of the learned counsel for the appellant that the existence of a licence under the Drugs and Cosmetics Act is crucial in nature and as such, the word Cosmetic in Sub Entry 27 should be given the same meaning as the definition provided under the Drugs and Cosmetics Act, though an attractive proposition, cannot be accepted for reasons more than one. The Drugs and Cosmetics Act is a part of the regulatory regime for regulating the manufacture and trade in such commodities. The definition in the said Act is therefore so wide as to cover all consumable products which could be used as a Cosmetic, in any sense of the word. What we are called upon to interpret is the provision in a taxing statute which grants a concessional rate of tax for certain commodities. In view of the decisions of the Apex Court referred to by the learned Senior Government Pleader for the Revenue, we are of the opinion that, importing of the definition in a statute in the regulatory regime into a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pack also, the clarificatory order does not state any sustainable reasons. In the above view of the matter, the issue with regard to the exigibility of tax at concessional rates under Sub Entry 27 of Entry 36 of the IIIrd Schedule with regard to Baby Powder, Baby Gift Pack and Mouth Wash are issues which require a reconsideration and a reasoned order at the hands of the clarificatory authority. 21. In the result, we uphold the findings contained in Annexure A4 order of clarification with regard to Baby Soap and Tooth Paste as contained in the impugned order. With respect to other products the matter is remanded to the 'Authority for Clarification' for reconsideration and a reasoned order on the exigibility of tax to three other products, i.e., Baby Powder, Mouth Wash and Baby Gift Pack. The Clarificatory Authority shall hear the appellant and pass appropriate reasoned orders considering the contentions advanced on either side, within a period of two months of the date of receipt of a copy of this judgment. 22. In view of disposal of O.T. Appeal 01/2018 as above, the connected Writ Petitions are also disposed of as mentioned below: (i). W.P.(C) 6388 of 2018 is her ..... X X X X Extracts X X X X X X X X Extracts X X X X
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