1997 (9) TMI 529 - SC - VAT and Sales Tax

Court affirms 'Boroline' as drug, rejects exemption, upholding Tariff Act classification.

Union of and Others Versus GD. Pharmaceuticals Limited and Another

The court upheld the trial judge's order in a classification dispute regarding the product 'Boroline' as a drug based on its composition and usage. The ... Whether Boroline is a drug or cosmetic product? Held that:- Appeal dismissed. In view of the detailed judgment of the High Court which holds that the present product contains only boric acid with zinc oxide and it cannot possibly be termed as a cosmetic or toilet preparation, we do not see any reason to interfere. Issues:1. Classification dispute between drug and cosmetic product regarding the product 'Boroline'.2. Interpretation of statutory provisions under the Tariff Act of 1985.3. Application of exemption notification dated October 1, 1985.4. Impact of appellate court's order on classification and exemption.5. Relevance of previous judicial decisions on classification.Analysis:1. The judgment dealt with a classification dispute regarding the product 'Boroline' as either a drug or a cosmetic product. The trial judge concluded that 'Boroline' is essentially a drug based on its composition and usage as an antiseptic boric ointment. The judge referred to a previous judgment under the Drugs and Cosmetics Act, 1940, supporting the classification as a drug.2. The appellant argued that changes in statutory provisions introduced by the Tariff Act of 1985 affected the classification of 'Boroline'. However, the court found that the introduction of chapter notes did not warrant a different classification under tariff item No. 14E corresponding to 30.03, which deals with patent or proprietary medicines.3. The application of an exemption notification dated October 1, 1985, was also discussed. The respondent had availed the exemption, but the court clarified that availing the exemption did not preclude the classification of 'Boroline' under a specific tariff item and did not constitute a waiver of any contention regarding its classification.4. The impact of the appellate court's order on classification and exemption was analyzed. The court noted that the goods were cleared under a specific tariff item based on the appellate court's order, and the acceptance of the order did not waive the right to contest the classification under a different tariff item.5. The judgment considered the relevance of previous judicial decisions on classification. The court distinguished the facts of the case from previous decisions and emphasized that the product's composition and usage supported its classification as a medicine rather than a cosmetic product.In conclusion, the court upheld the trial judge's order, dismissing the appeal and refusing the return of excess excise duty paid. The special leave petition to the Supreme Court was also dismissed based on the detailed judgment of the High Court supporting the classification of 'Boroline' as a drug.