Fiscal classification of Balsam Tolu B.P. turned on dominant use, with octroi levy rejected as a food essence.

Balsam Tolu B.P. was treated by the municipal authority as a drug not liable to octroi, and that settled classification could not be departed from without cogent new material. In fiscal classification, the commodity must be understood in common and commercial parlance, with emphasis on its ordinary and predominant use. On the materials considered, Balsam Tolu B.P. was mainly used in pharmaceutical preparations as an expectorant and cough mixture ingredient, with only ancillary non-pharmaceutical uses. Its dominant character in trade and commerce was therefore a drug, not a food essence, and the attempted levy of octroi under Item 8 was not justified.

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Issues: Whether Balsam Tolu B.P. was classifiable as a drug or as a food essence falling under Item 8 of Clause 1 of Schedule H to the Bombay Municipal Corporation Act, and whether the municipal authority could depart from its earlier consistent classification and levy octroi.

Analysis: The goods had consistently been treated by the municipal authority as a drug not liable to octroi, and no new material justified a departure from that long-standing construction. In fiscal classification, words are to be understood in common parlance and commercial parlance, with due regard to the ordinary and predominant use of the commodity. The material placed before the Court showed that Balsam Tolu B.P. was primarily used in pharmaceutical preparations as an expectorant and cough mixture ingredient, though it had some ancillary non-pharmaceutical uses. Its dominant character in trade and commerce was that of a drug, not a food essence.

Conclusion: Balsam Tolu B.P. was a drug and not a food essence, and the attempted levy of octroi under Item 8 was not justified.

Ratio Decidendi: A settled fiscal classification consistently accepted and acted upon for a long period should not be altered without cogent reason, and a commodity must be classified according to its common and commercial parlance meaning and its predominant use.

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