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TMI Blog2024 (7) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... e said finding thus stands answered in the negative affirming the finding given by the STAT. Himani Boroplus Antiseptic Cream - HELD THAT:- The said cream under no circumstances can be brought or treated as a cosmetic. It can only be used for the medicinal value that it has and it cannot be used as an ordinary facial or a body cream except for the purpose for which it has been manufactured and sold. It also is not a product which is otherwise capable of being used as a cosmetic or a toiletry product. Neither can it be brought within the purview of medicated goods as the medicated goods are those which are used otherwise than as medicines with its added incidental medicinal properties, for example medicated shampoo, soap, hand wash etc. etc. - the finding given by the STAT is a well-reasoned finding which does not warrant interference as no substantial material could be brought on record either before the authorities concerned or before this Court so as to disprove the findings given by the STAT. Himani Boroplus Prickly Heat Powder - HELD THAT:- This product, unlike Nycil Prickly Heat Powder has predominant medicinal elements which has a soothing and protective effect on the skin, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o as STAT ) in T.A. No. 1124 of 2000, T.A. No. 1125 of 2000, T.A. No. 1301 of 2001, T.A. No. 1305 of 2001, T.A. No. 503 of 2003, T.A. No. 504 of 2003, T.A. No. 505 of 2003 and T.A. No. 506 of 2003 decided on 31.03.2004. 2. Heard Mr. Lakshmi Kumaran, learned counsel along with Mr. Narendra Dave, Mr. Sumanth Chanda and Ms. Anushka Rastogi, learned counsel for the petitioner/assessee and Mr. Swaroop Oorilla, learned Standing Counsel for Commercial Taxes, appearing for the respondent/Department. 3. These Tax Revision Cases pertains to sister companies known as M/s. Himani Limited and M/s. Emami Limited. Of these eleven Tax Revision Cases, three each have been filed by two assessees. Tax Revision Case Nos.193, 188 and 187 of 2004 have been filed by M/s. Himami Limited for the assessment years 1996-1997, 1997-1998 and 1998-1999. There are two Tax Revision Cases in respect of the company where the challenge has been made by the Department i.e. Tax Revision Case Nos.211 and 155 of 2004 challenging the order for the assessment years 1997-1998 and 1998-1999. Likewise, there are three Tax Revision Cases filed by M/s. Emami Limited i.e. Tax Revision Case Nos.182, 183 and 192 of 2004 for the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 1998-1999, Tax Revision Case No. 166 of 2004 for the assessment year 1998-1999, Tax Revision Case No. 169 of 2004 for the assessment year 1999-2000, Tax Revision Case No. 211 of 2004 for the assessment year 1997-1998 and Tax Revision Case No. 156 of 2004 for the assessment year 2000-2001. It is pertinent to mention here that there was yet another Tax Revision Case which was filed by the Department i.e. Tax Revision Case No. 161 of 2004 for the assessment year 1996-1997 which was dismissed for default vide order dated 20.07.2009. 8. There does not seem to be any further effort made for restoration of the said Tax Revision Case and by efflux of time, the assessment order so passed for the assessment year 1996-1997 has attained finality. Whatever be the effect of the same, we proceed to decide the substantive issue so far as the aforementioned remaining five Tax Revision Cases filed by the Department challenging the findings of the STAT. So far as (a) Himami Sonachandi Chavanprash (b) Himami Boroplus Antiseptic Cream (c) Himami Boroplus Prickly Heat Powder being ordered to be treated as drugs and not as a cosmetic i.e. treating these three products falling under Entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cosmetics Act, 1940, where Cosmetics are defined under Section 3 (aaa) and Drugs are defined under Section 3(b) and has reached to the conclusion of the product being drug and not cosmetic. Thus, the said issue was decided in favour of the petitioner/assessee. 14. Disputing the said finding, the learned Standing Counsel for the respondent/Department contended that the product has saffron in it and since saffron lends vigor to the body and glow to the skin, hence, the glowing and the luster of skin being qualities related to cosmetics, therefore, it has been brought under Entry 36 of 1st Schedule of the Act. Apart from this oral contention of the learned Standing Counsel appearing for respondent/Department, there was no documentary proof, material, literature or text with which the Department could sustain their contention while contending that Himani Sonachandi Chavanprash is a cosmetic and not a drug. 15. If we look at the definition of cosmetics as per Section 3 (aaa) which for ready reference is reproduced herein under: (aaa) cosmetic means any article intended to be rubbed, poured, sprinkled or sprayed on, or introduced into, or otherwise applied to, the human body or any part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y creams or lotions with medicated composition; rather, it is fully medicated product in the form of a cream. Hence, it would not fall under the purview of Entry 36 of 1st Schedule of the Act. The said product Himani Boroplus Antiseptic Cream while it was being applied for getting the license was required to reflect the composition and the books of reference under the ayurvedic literature with specific page numbers and chapters dealing with the same. From the details so furnished with the Government agency while obtaining license; the products, composition and book of reference was reflected, which for ready reference is reproduced herein under: Composition Percentage Books ref. With Pg.No. 1. Extract of Chandan (Santalum album) 1.0 Bhava Prakash (189) Raj Nighantu (397) Charak Samhita (62) 2. Extract of Tulasi (Occimum Sanctum) 0.4 Raj Nighantu (327) Bhava Prakash (509) 3. Extract of Kapoor Kachari (Hedychium spicatum) 1.5 Ayurved Samgraha (151) Charak Samhita {Su.4/30 (65), 4/37(67)} Bhava Prakash (247) 4. Extract of Nimba (Azadirachta indica) 1.0 Bhava Prakash (329) Charak Samhita {Su.4/14(62)} 5. Extract of Haridra (Curcuma longa) 0.3 Bhava Prakash (115) Bangasen Samhita (473-4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t/label of the product, it is preventive in nature and has curative and healing ayurvedic ointment and it is prescribed for dry skin diseases, cuts, burns, minor skin burns, wounds, chapped skins, furuncle impetigo and intertrigo. All of which by itself establish that it is not a cosmetic product or a toiletry product. Even the STAT has accepted the product to be having curative effect along with it being a healing ayurvedic ointment for curing the aforementioned skin disorders. 21. For the aforesaid reasons, we are of the considered opinion that the finding given by the STAT is a well-reasoned finding which does not warrant interference as no substantial material could be brought on record either before the authorities concerned or before this Court so as to disprove the findings given by the STAT. Thus, for the aforesaid reason also, the challenge by the Department so far as the finding given by the STAT stands negated. 22. The next product, the finding of which has been challenged by the State Government and its Department is the Himani Boroplus Prickly Heat Powder. However, perusal of the Tax Revision Case and the documents attached therein does not show any strong resistance b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be characterized as cosmetic. Nextly, it has to be seen whether the prickly heat powder is capable of being used as cosmetic or toilet preparations and thereby falls under exclusion clause (c) of Entry 37 of I Schedule to the Act. As seen from the decision of the Hon ble Madras High Court in V.C., Ramalingam Sons and Another v. State of Tamilnadu and others reported in (2002) 127 APSTJ 382, the Legislature of Tamilnadu also brought out similar amendment to the entry relating to the medicine in TNGST Act in order to exclude products capable of being used as creams, hair oils, tooth paste, tooth powders, cosmetics, toilet articles, soaps and shampoos from the entry medicines . The said amendment was challenged before the Hon ble Madras High Court. The Madras High Court while dismissing the Writ Petition observed as follows: This classification does not discriminate against any system of medicine or against any of the licenses. All of them are treated alike. There is no hostile discrimination against ayurvedic medicines or any medicine by reasons of this explanation. It merely carves out all preparations made by licencees holding licenses under the Drugs and Cosmetics Act, 1940 and ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icinal properties, the specific legislative language of the concerned states, namely Kerala and Tamil Nadu, classifies such products as cosmetics. This classification highlights the dualistic nature of Nycil Prickly Heat Powder, which combines therapeutic properties such as zinc oxide boric acid and with cosmetic usage. 24. On the other side Himani Boroplus Prickly Heat Powder also contains medicinal ingredients in a way that is similar to Nycil, such as zinc oxide (Jasad Bhasma), boric acid (Tankan Amla) and salicylic acid, a beta hydroxy acid. However the Himani Boroplus Prickly Heat Powder could potentially be classified differently due to the extra ingredient that is salicylic acid which makes the product drug. In particular, it could be classified as a drug, indicating a primary use for therapeutic or prophylactic purposes. 25. This product is not merely another addition to the endless array of cosmetic skincare products available on the market; it is meticulously formulated product that has been designed with a specific purpose: to treat and heal skin conditions. This significant distinction is primarily due to the potent medical properties of its active ingredients, which in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and therapeutic potential it offers, Boroplus Prickly Heat Powder rightfully belongs in the realm of drugs, rather than cosmetics. 29. Considering the presented arguments and the discussion has thoroughly examined the classification of Himani Boroplus Prickly Heat Powder in the context of the Schedule 1st of APGST Act. This product, unlike Nycil Prickly Heat Powder has predominant medicinal elements which has a soothing and protective effect on the skin, which can be attributed to its cosmetic nature. It only contains medicinal ingredients such as Zinc Oxide, Boric Acid and Salicylic Acid, which gives it therapeutic and prophylactic properties, making it more than just a cosmetic product. 30. Taking into account the decision of the Allahabad High Court in the case of Himani Ltd. v. Comm. Of Commercial Tax 2011 (263) E.L.T. 335 (All.) and the common parlance test, it is clear that the public perceives products like Himan Boroplus Prickly Heat Powder as medicinal or Ayurvedic products rather than mere cosmetics. Furthermore, the Advance Ruling sought by the assessee before the Guwahati Commercial Taxes Department, which was later upheld by the Gauhati High Court in Emami Limited an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ric Ayurvedic Cream. The STAT in the impugned order has given findings of both this products being cosmetic product which falls under Entry 36 of 1st Schedule of the Act. Whereas the contention of the learned counsel for the petitioner/assessee is that both these products are in fact drugs as is reflected under Entry 37 of 1st Schedule of the Act. The contention of the learned counsel for the petitioner/assessee in so far as Himani Navaratan Oil is concerned, was that, the product is a medicinal product and is prescribed for keeping the head cool, relieve headache, helpful in providing sound sleep, effective memory aid, it tones up body muscles, removes tiredness, useful in minor burns and cuts and also prevents premature hair fall. None of the actions as mentioned in the label of the product cater to the definition of a cosmetic product or a toiletry product. 37. It was the contention of the learned counsel for the petitioner/assessee that even the license for the product was obtained as an ayurvedic product sanctioned by the Drug Controller after thorough scrutiny of its composition with its intended cure of headache, reduction in burns, improving blood circulation and also for i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicinal Plants, Vol. II, P. No. 1361-1363. Bhava Prakash, Vol. I, P. No. 430. 16. BRAHMI 0.01 gm Chiranjib Banousadhi, Vol. I, P. No. 24. Indegenous Drugs of India, by R.N. Chopra, P. No. 352 Bhava Prakash, Vol. I, P. No. 462. 17.SURASAR (Alchahol) 0.5 ml Arka Prakash, P. No. 81. Incorporated in Vegetable/mineral oil base with odouriferous substances, preservatives etc. Q.S. to 100 ml. It was based upon these compositions and reference to the ayurvedic texts that the license was given as an ayurvedic drug under the Drugs and Cosmetics Rules, 1945. 39. Enough literature and materials in respect of its curing capacity as an ayurvedic medicine was made available with the Department. Learned counsel for the petitioner/assessee also relied upon the decision of the Tamil Nadu Sales Appellate Tribunal, wherein the Tamil Nadu Sales Appellate Tribunal has distinguished Navaratan Oil from the judgment of Commissioner of Sales Tax vs. Raj Co. (1986) 62 STC 76, and had not accepted the said view in the said judgment holding that Navaratan Oil has its therapeutic values such as relieves stress, sound sleep, effective memory aid, it tones up body muscles, removes tiredness and premature hair fal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jib Banousadi III 191 Saussuroa Lappa (COSTUS/KUSTHA) 0.5% Ayurveda Sangraha 1073 Bharatia Banousadi III 650 Chiranjib Banousadi VI 254 59 Mehandi (LAWSONIA/MADANIKA) 3% Bharatia Banousadi II 490 Chiranjib Banousadi I 182 Tulsi (Ocimum) 3.3% Ayurveda Sangraha 180 Bharatia Banousadi IV 926 33 Chiranjib Banousadi I 73 Ghritakumari (ALOE) 0.2% Ayurved Sangraha 172 Nadkarni VOL. I 76 Drabyagun 187 Darwantari (BERBERIS) 0.5% Indegenous D of I 289 Bhar. Banousadi I 42 Drabyagun 76 TURMERIC Powder 0.2% Ayurveda Sangraha 137 Bharatia Banousadi IV 1158 60 By Dr. K.P. Biswas 42. What is necessary to be appreciated at this juncture is that, from the rapper in which the cream is sold, very emphatically highlights it as an ayurvedic medicine. The rapper also clearly indicates that the cream is highly effective for cracked skins, pimples, boils and numerous other skin blemishes. Nowhere did they in the rapper claim it to be a cosmetic product or a product which could enhance the complexion or fairness. The licensing authority having granted license for the said product as an ayurvedic drug, the manufacture, sale and distribution of the product as a drug and not a cosmetic is established and it i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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