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TMI Blog2005 (10) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals before the Tribunal, which have also been rejected. Heard Sri Ashok Kumar , learned counsel for the applicant and Sri U.K. Pandey, learned Standing Counsel. Learned counsel for the applicant submitted that the Tribunal illegally relied upon the decision of this court in the case of Balaji Agency, Gorakhpur v. Commissioner of Sales Tax reported in [1994] UPTC 184. He submitted that in the case of Balaji Agency, Gorakhpur v. Commissioner of Sales Tax reported in [1994] UPTC 184, Notification No. ST-II-1233/X10(1)-1974 dated April 14, 1974 was considered in which in the entry "cosmetics and toilet requisites. . . . ." Vaseline was included while for the assessment year in dispute Notification No. S.T.-2-5784/X-10(1)-80-U.P. Act 15/48-Order 81, dated September 7, 1981 is relevant in which Vaseline is not specifically included. He further submitted that it is medicine because it is used to heel up cuts and fissures of skin and not for beautification of body. In support of his contention he relied upon various decisions, namely, Deys Medical Stores Limited v. Commissioner, Trade Tax reported in [2004] 134 STC 1 (All), Union of India v. G.D. Pharmaceuticals Limited reported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. All kinds of cosmetics and toilet preparations for beautification or care of the face, skin, hair, nails, eyes or brows, but not including soaps, safety razor blades, hair combs, tooth pastes, tooth powders, and other dentifrices, tooth brushes and kumkum. M or I 12% " The words "cosmetic and medicines" have not been defined in the statute. Therefore, it is necessary to look into the dictionary meaning of the aforesaid two words. "Cosmetic" has been defined as follows: Collins Advanced Learners Dictionary "Cosmetic are substances such as lipstick or powder, which people put on their face to make themselves look more attractive". The Concise Oxford Dictionary "Intended to beautify hair, skin or complexion, etc.,; imitating or restoring normal appearance; intended to improve appearances". The Encyclopedia Americana International Edition "Cosmetics are primarily manufactured preparations for beautifying the wearer, they are articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body or any part thereof for cleansing, beautifyin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dictionary by Nancy Roper "Science or art of healing, specially as distinguished from surgery and obstetrics. A therapeutic. " Webster's Third International Dictionary, Vol. II "A substance or preparation used in treating disease American Indian give control over natural, or magical forces to Act as protective or healing charm". Chamber Dictionary "Medicine N. any substance used (esp. internally) for the treatment or prevention of disease; a drug. Medicinal used in medicine curative, relating to Medicine." Oxford Dictionary "Medicine, substance esp. one taken internally, used in medicine in the art of restoring and preserving health esp. by means of remedial substances and regulation diet, etc., as opposed to surgery and obstetrics." Now let us examine various decisions of the apex Court and the various High Courts in which the principles of classification of goods have been laid down and the words "cosmetic and toilet preparation and medicine" have been considered with reference to the product. The honourable Supreme Court in the case of Ramavatar Budhaiprasad v. Assistant Sales Tax Officer [1961] 12 ST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iterated its earlier view taken in the case of Sarin Chemical Laboratory v. Commissioner of Sales Tax [1970] 26 STC 339, and held tooth-paste as toilet requisite. In the case of State of Goa v. Colfax Laboratories Ltd. reported in AIR 2004 SC 45, the case of the assessee was that after shave lotion comes within the ambit of medicinal preparation and is not toilet preparation. The distinction between medicinal preparation and toilet preparation was pointed out by the court, taking into consideration the scheme of the Medicinal and Toilet Preparation (Excise Duty) Act, 1955 and the nature of product involved. The court came to the conclusion that after shave lotions are toilet preparations and not "medicinal preparations". The relevant part of the judgment is quoted below: ". . . . . Therefore, in order to come within the ambit of 'medicinal preparations' the intended use of the article must be for treatment, mitigation or prevention of disease. The article must be used for the purpose of either curing or mitigating the disease after its symptoms have appeared or in prevention of any disease. If the intended use of the article is not for any one of the aforesaid purposes, it cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perfume, and the question whether it has a sweet fragrance or a disagreeable odors is in no way determinative of its character as a hair-oil. Every hair-oil, whether it is manufactured scientifically with ingredients containing some medicinal properties of crudely, is intended as a hair-tonic, for the prevention of dandruff, falling hair and baldness and for beautifying ultimately the hair and the appearance of the person using it. A hair-oil may cool the brain or improve the system and induce sound sleep, but nonetheless it does not because of these qualities become a medicinal preparation. Now, the word 'cosmetic' has been defined in Webster's International Dictionary as meaning 'any external application intended to beautify and improve the complexion, skin or hair'. Other dictionaries also give the same meaning. The meaning of the word 'toilet', as given in Webster's International Dictionary, is 'act or process of dressing, especially, formerly of dressing hair, now usually cleansing and grooming of one's person'. A 'toilet preparation' is any preparation which is intended to affect, and conceivably to improve the bodily appearance. The words 'cosmetics' and 'toilet', being w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Commercial Taxes, Zone-II, Bangalore reported in [1997] 104 STC 182, the Karnataka High Court held that Vicco Vajradanti is not taxable as toothpaste being an ayurvedic medicine. In that case, on the basis of the material placed by the assessee, it has been held that goods were manufactured as drugs and marketed as drugs. In the case of B. P.L. Pharmaceuticals Ltd. v. Collector of Central Excise reported in [1997] 104 STC 164, the Supreme Court was concerned with "selsun" anti-dandruff preparation containing 2.5 per cent of selenium sulphide, which is the full therapeutic limit permissible under the pharmacopoeia. The said product was manufactured under the drug licence as a medicine, put up as a medicine, used under doctor's advice and sold through chemist's shops on a doctor's prescription. It was held medicine as it was understood in common parlance as medicine. In the case of B. Shah Co. v. State of Gujarat reported in [1971] 28 STC 5, the Gujarat High Court held nycil-medicated powder as a medicine. The honourable Gujarat High Court on a consideration of definition of word "medicines" held as follows: "It is thus clear that the word 'medicine' is su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is used like a medicine. It has been contended by the department that Odomos is available even in general stores merchandise shops and is not sold at the chemist shop exclusively. In my opinion the mere fact that Odomos is available even in general merchandise shops will not detract the substance from being used as a preventive measure or as a preventive medicine. It is the use of a commodity which normally should be determining factor for interpreting whether the said commodity is covered under a particular item. It is well-settled that common parlance meaning has to be applied while interpreting entries under the fiscal statute and the courts have said time and again that it is not safe to be always guided by the dictionary or technical meanings. It is, therefore, not necessary to deal with various authorities cited by the learned counsel for the assessee on the point. Since in common parlance Odomos is used as a medicine and is known as a medicine, in my opinion, the Tribunal was fully justified in holding that Odomos was covered under the notification dated 7th September, 1981." Special leave petition against the aforesaid judgment has been dismissed by the honourable Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition of the Boroline and is of no help to the assessee in the present case. West Bengal Taxation Tribunal while dealing with the entry of cosmetic under the West Bengal Sales Tax Act held Boroline is a chemical and not drug or proprietary medicine. However, the aforesaid decision of the West Bengal Taxation Tribunal has not been upheld by the apex Court in the case of G.D. Pharmaceuticals Ltd. v. State of West Bengal reported in [1998] UPTC 1205, in view of the decision of the apex Court dated September 15, 1997 in SLP(C) No. 17949 of 1997 (CC. 5883/97), Union of India v. G. D. Pharmaceuticals Limited [2000] 118 STC 19 (SC). As stated earlier, the decision is of no help to the assessee in the present case because in the case of Union of India v. G.D. Pharmaceuticals Limited [2000] 118 STC 19, the apex Court held that Borolene is a medicine on the basis of its composition. Reliance is also placed on the decision in the case of Commissioner of Commercial Taxes, Madhya Pradesh v. Dawar Brothers, Indore reported in [1998] 111 STC 319; [1998] UPTC 1211, in which the Madhya Pradesh High Court has held that Vicco Vajradanti paste and powder as drug and medicine following the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ug licence. Another aspect to be kept in mind is that the Revenue is bound by the circulars issued by the Board. The Board Circular dated December 5, 1991, clearly stipulates that in case of doubt the matter should be referred to the Drug Controller. The matter was referred to the Drug Controller who, as stated above, has opined that it is an Ayurvedic medicament. If the Department was still entertaining any doubts, they could have referred the matter to the Adviser, Ayurveda/ Sub-Commissioner in the office of Drug Controller, Director General of Health Services, New Delhi. This was not done." The aforesaid decision is also of no help to the assessee as in that case, the Drug Controller opined that it is an Ayurvedic medicament and it was found that the oil can be used for treatment of headache, eye problem, night blindness, reeling head, weak memory , hysteria, amnesia, blood pressure, insomnia, etc. The dosages required are also set out on the label. The product was registered with Drug Controller and was being manufactured under a drug licence. It was further found that the main criteria for determining classification is normally the use it is put to by the customers who u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove following aspect are relevant for the classification of product under the entry "cosmetic or toilet preparation" and medicine: (i) How product is known in common parlance and in commercial sense. (ii) Mere fact that the product has some curative effect is not enough to classify the product as a medicament. (iii) Mere fact that the product is being manufactured under the drug licence is not enough to classify the product. (iv) Language of the entry has to be given effect. (v) How the product is known in scientific sense or technical sense is not much relevant. (vi) Dictionary meaning is a good guide but not conclusive. (vii) For being a medicine a product must have a effect either to cure the disease or to prevent and intend use must be for treatment, mitigation or prevention of disease and in common parlance and commercial sense known as medicine. (viii) Cosmetic and toilet preparations are products which are used for beautification or care of face, skin, hair, nails, eyes or brow and are known as cosmetic and toilet preparation in common parlance and commercial sense. (ix) Onus lies on the Revenue to prove that product falls under particular entry. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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