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TMI Blog2000 (9) TMI 1022X X X X Extracts X X X X X X X X Extracts X X X X ..... f the First Schedule to the Act or at 8 per cent under entry 42 of the said Schedule. The assessee contended that the bulk drugs and pharmaceutical preparation sold by it are drugs liable to tax at 6 per cent under entry 116 of the First Schedule to the Act. The assessing authority did not accept the said contention and assessed the said turnover at 8 per cent as chemicals under entry 42 of the First Schedule. In appeal by the assessee the Appellate Assistant Commissioner accepted the contention of the assessee and directed the assessing authority to assess the turnover at 6 per cent. The department took up the matter in appeal before the Tribunal. The Tribunal set aside the finding of the appellate authority and restored the order of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate of Tamil Nadu [1993] 89 STC 352. He accordingly submitted that the Tribunal was fully justified in holding that the two items dealt with by the assessee are only fine chemicals liable to be assessed at 8 per cent under entry 42 of the First Schedule. 4.. In order to test the merit of the rival contentions, it is necessary to refer to the relevant entries. Entry 116 of the First Schedule to the Act, as it stood at the relevant time reads as follows: ---------------------------------------------------------------------------- "SI Description of goods Point of levy Rate of tax No. tax (Per cent) 1 2 3 4 ---------------------------------------------------------------------------- 116 Medicine (i) Allopathic medicines At t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i, Fyza Drugs, T.C. Pharma, etc. The Tribunal has held that these two items are not medicines for the reason that they are not applied to human beings or to animals as drugs or medicines and that they were sold only to pharmaceuticals for preparation of drugs and medicines. 6.. In this context, it is relevant to note that the assessee is selling these items under a licence issued under the Drugs and Cosmetics Act, 1940. Section 3(b) defines "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 purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... At the higher concentration sold by the appellant the chemicals in question cannot be normally used as medicine directly. Buyers in appellant's case are mainly pharmaceutical companies which used the commodity purchased as raw materials for the preparations of medicines. So in the commercial sense the fine chemicals sold by the appellant under the head bulk drugs and pharmaceutical formulations are not medicines. In the common parlance also the chemical sold by the assessee are not known as medicine. The finding of the appellate authority is therefore not correct. I hold that the item sold by the assessee can only be treated as chemicals and not as drugs." 8.. The Tribunal has stated that in commercial sense the fine chemicals sold by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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