Common parlance classification of mukhwas: processed spice mixtures were treated as residuary taxable goods, not spices.

Products marketed as mouth freshener or mukhwas, made by roasting, frying and mixing spices with sugar, salt, flavouring and other additives, were held not to fall within the entry for "spices of all varieties and forms" because classification depends on common parlance and essential character; once processing created a commercially distinct article, the products could not be treated as spices merely because spices were used as ingredients. As no specific entry covered them, the residuary entry applied, and the products were taxable under Schedule E. The court also noted that Central Excise or HSN classification could not control the State sales tax entry.

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Issues: (i) Whether the products marketed as mouth freshener or mukhwas, made from spices mixed with other ingredients and subjected to processing, fall within entry 91 of Schedule C as "spices of all varieties and forms"; (ii) whether such products, if not covered by entry 91, are classifiable under the residuary entry 1 of Schedule E and taxable accordingly.

Issue (i): Whether the products marketed as mouth freshener or mukhwas, made from spices mixed with other ingredients and subjected to processing, fall within entry 91 of Schedule C as "spices of all varieties and forms".

Analysis: Classification had to be determined by the common parlance understanding of the entry. The expression "spices of all varieties and forms" is wide, but it covers only goods that retain the essential character of spices. The products in question were manufactured by roasting, frying, mixing and combining spices with sugar, salt, flavouring and other additives, and each final product emerged as a commercially distinct article. On that basis, the final products could not be treated as spices in common parlance merely because spices were used as ingredients.

Conclusion: The products do not fall within entry 91 of Schedule C.

Issue (ii): Whether such products, if not covered by entry 91, are classifiable under the residuary entry 1 of Schedule E and taxable accordingly.

Analysis: Once the products were held not to answer the description of spices, and no competing specific entry covered them, the residuary entry became applicable. The Tribunal's reliance on Central Excise classification and the Harmonized System could not control classification under the State sales tax entry.

Conclusion: The products fall under entry 1 of Schedule E and are taxable at 12.5 per cent.

Final Conclusion: The appeal succeeded, the Tribunal's classification was set aside, and the respondent's products were held taxable under the residuary entry rather than as spices.

Ratio Decidendi: For sales tax classification, a product is to be judged by its common parlance identity and its essential character; where processing and admixture of ingredients produce a commercially distinct article that is no longer regarded as spices, it cannot be brought within an entry covering spices of all varieties and forms.

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