Common parlance classification treats margarine as vanaspati, attracting the lower sales tax rate.

Margarine was treated as classifiable as vanaspati under Schedule C, entry 100 of the Maharashtra Value Added Tax Act, 2002, because the product's essential character remained that of hydrogenated vegetable oil despite the addition of water, emulsifying agents and other additives. The classification was determined on commercial and common parlance understanding, rather than on a purely chemical distinction. The analysis also noted consistency with prior treatment of similar margarine products and the Tribunal's view, resulting in application of the lower rate of tax under Schedule C instead of the higher rate under Schedule E.

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Issues: Whether margarine is classifiable as vanaspati under Schedule C, entry 100 of the Maharashtra Value Added Tax Act, 2002 and taxable at 4 per cent, or falls under Schedule E, entry 1 and is taxable at 12.5 per cent.

Analysis: Margarine and vanaspati both originate from hydrogenated vegetable oil, and the essential character of the product was found to remain the same despite the addition of water, emulsifying agents and other additives during the manufacturing process. The product was considered in its commercial and common parlance sense, and not by a purely chemical distinction. The Court also noted that similar margarine products were being taxed at 4 per cent, and the Tribunal's view had consistently prevailed.

Conclusion: Margarine is classifiable as vanaspati under Schedule C, entry 100 and is taxable at 4 per cent.

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