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TMI Blog2014 (5) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... classification, SC pointed out that the extent of a small percentage of ingredients having therapeutic or prophylactic value and use of the product for beautification, would not, ipso facto, make a product a cosmetic preparation - The Apex Court pointed out that the common parlance test is not be all and end all of the matter and merely because a product could be put to cosmetic use, that would not, by itself, make it a cosmetic product - The claim that it is an ayurvedic product must be substantiated on factual basis. Entry 1(ii) of Part F of the I Schedule deals with hair oils, hair creams, hair dyes, etc., and the Explanation to the said entry stated that any of the items, even if medicated, or as defined under Section 3 of the Drugs and Cosmetics Act, or manufactured on the licence issued under the said Act, will fall under this item - Thus, if an item has to fall under Part F Entry 1, even going by the Explanation, a medicated oil has to be a hair oil simpliciter - However, if medicated oil is not sold just as a hair oil, but, as already pointed out in the preceding paragraqph and as certified by the Director of Ayurveda that it has multifarious functions and one of which h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch expression shall include adhestive Plasters, adhesive Plaster if paris and eangages, velrocoop Eangages, elastro crape handages, zauze, Wadding gauz, lint and cotton woll poultices And similar articles impregated or coated with Pharmaxetidal substances put up informs or packings for surgical purposes which have been sterlised and confirm to the accepted Standard of the medical profession. v) Pharmaceutical and surgical products of plastic and rubber including gloves aprons caps. (B) Instruments and appliances used in medical, surgical, dental, veterinary sciemes, including scientific apparatus other electromedical apparatus and sight testing instruments including opthalmoscopoe, Otoscope, Laryago Scope, rationscopoe, Binoular loupe, parts and Accessories thereor (Other than those specified Elsewhere in this schedule) (i) Heart Pacemaker (Pulsde generator) (ii) Intra-ocular lenses) Sl.No. Description of the Goods Point of levy Rate of Tax Item No. in the Pre.Sch. 1 2 3 4 5 1. (1) Scents and perfumes in any form At the point 16% 51 excluding doop and agarpathis but of first sale including aragaja jab javvadu and in the State punuupu. (ii) Hair oils, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring pointed out that the item in question would fall under Entry 20 of Part C of the First Schedule. Thus the appeal was allowed. Aggrieved by the same, the Revenue is on appeal before us. 4. Learned Special Government Pleader appearing for the Revenue placed reliance on an unreported decision in Tax Case (Revision) Nos. 742 of 2006 and 301 of 2011 (State of Tamil Nadu Vs. Tvl.Glaxo India Limited) dated 1.3.2012 and submitted that as in the case of Nycil Prickly Heat Powder attracting levy of tax at 16% as falling under Entry 1(iii) of Part F of the First Schedule, Ramthirth Brahmi Oil is essentially a hair oil and even if medicated it is only a hair oil, by reason of Explanation to Part F of Schedule I and the item in question is liable to be taxed at 16% only. 5. Countering the said submission of the Revenue, learned counsel appearing for the respondent assessee pointed out to various orders passed by different States in dealing with the same item, holding that what is marketed by the assessee was not a hair oil simpliciter but a medicinal preparation useful for the prevention and cure of several disorders like disorder of scalp, skin, muscle as well as certain diseases of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and is entitled to exemption under Notification No.75/94 dated 29.3.1994 as amended. In the face of these voluminous materials as available, rightly the Tribunal came to the conclusion that the item in question is not a hair oil simpliciter or scented hair oil with medication attracting Explanation to Entry 1(ii) of Part F of First Schedule. 7. We have perused the order of this Court made in T.C.(R) Nos. 742 of 2006 and 301 of 2011. A reading of the said decision would point out that what has been considered therein was Nycil Prickly Heat Powder, which is a medicated preparation for care of skin and it has application on the body. This Court pointed out that Nycil Prickly Heat Powder is used only to absorb sweat and moisture from the body and to keep away rashes in the human beings and it could only be considered as a talcum powder. Thus applying the Explanation to Entry 1 of Part F of the First Schedule, this Court held that the item in question viz., Nycil Prickly Heat Powder, would attract 16% rate of tax falling under Entry 1(iii) of Part F of the First Schedule. As already pointed out, as far as the sale of Ramtirth Brahmi Oil is concerned, there is no material placed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od by the users and not by the scientific or technical meaning. Referring to the decision reported in 14 STC 813 (MP) ( Commissioner of Sales Tax Vs. Shri Sadhna Aushadhalaya) dealing with the question as to whether Maha Bhringaraj Oil is a toilet article or a medicinal preparation, in the decision reported in (2003) 5 SCC 60 (Commissioner of Central Excise Vs. Sharma Chemical Works), the Apex Court pointed out: 12. It is settled law that the onus or burden to show that a product falls within a particular tariff item is always on the Revenue. Mere fact that a product is sold across the counters and not under a doctor's 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 ipso facto 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 main criterion for determining classification is normally the use it is put to by the customers who use it. The burden of proving the Banphool Oil is understood by the custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. The Apex Court pointed out that the common parlance test is not be all and end all of the matter and merely because a product could be put to cosmetic use, that would not, by itself, make it a cosmetic product. The claim that it is an ayurvedic product must be substantiated on factual basis. However, the minuscule percentage use of medicinal element in the product is not a deciding factor and it does not change the nature of the product from medicament to cosmetic product. 14. Going by the above-said decisions, as far as the present case is concerned, in the matter of understanding a product as falling under medicinal preparation or as an item of toiletry, the same has to be decided by the application of the product, the preparation of the product and the use to which it is put to by the customers. Ultimately, the burden of proving that Ramtirth Brahmi Oil is understood by the customers as a hair oil, rests on the Revenue. 15. The consistent case of the assessee herein is that Ramtirth Brahmi Oil is not just plain hair oil/medicated hair oil, but it is an oil which has multifarious applications over the body. 16. The assessee placed before the authorities concerned, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue sought to treat the items in question either as toilet preparation or as cosmetic. Thus, even with the difference in the entries, if a product could be classified only as a medicament or a medical product, it cannot lose its character as such merely because the entries under the sales tax enactment are differently worded. As far as the present case is concerned, Entry 1(ii) of Part F of the I Schedule deals with hair oils, hair creams, hair dyes, etc., and the Explanation to the said entry stated that any of the items, even if medicated, or as defined under Section 3 of the Drugs and Cosmetics Act, or manufactured on the licence issued under the said Act, will fall under this item. Thus, if an item has to fall under Part F Entry 1, even going by the Explanation, a medicated oil has to be a hair oil simpliciter. However, if medicated oil is not sold just as a hair oil, but, as already pointed out in the preceding paragraqph and as certified by the Director of Ayurveda that it has multifarious functions and one of which happens to be for the scalp or for the hair, it would not make the oil sold by the assessee, a pure and simple hair oil. The Revenue placed heavy reliance on th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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