TaxTMI 
TaxTMI 
2011 (3) TMI 1448
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....in the business of pharmaceutical and re-selling of pharmaceutical products for medical usage and also used by the public in general. The respondent-assessee manufactures and sells table margarine under the brand name of nutralite table margarine. The respondent-assessee under section 56(1)(e) of the Maharashtra Value Added Tax Act, 2002 applied to the Commissioner of Sales Tax for determination of the tax rate applicable to their products. The respondent-assessee submitted determination of disputed question (DDQ) application seeking that nutralite table margarine is a margarine-vanaspati and it is to be covered by Schedule C, entry 100. However, the Commissioner of Sales Tax while deciding DDQ Application No. 11/2006/Adm2/40/B1 by order dated October 22, 2007 held that nutralite table margarine would be classified under Schedule E, entry 1 and hence, would attract tax at the rate of 12.5 per cent. The assessee thereafter challenged the said order before the Maharashtra Sales Tax Tribunal, Mumbai and the Tribunal while setting aside the said order held that it falls under Schedule C, entry No. 102 and hence it would attract tax at the rate of four per cent. Hence, this appeal. &nbs....
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....sel Mr. Thakar relied on number of rulings. The learned counsel Mr. Thakar on the point of product maintaining the same identity after the hydrogenation of the oil or the process on other products, relied on Tungabhadra Industries Ltd., Kurnool v. Commercial Tax Officer, Kurnool reported in [1960] 11 STC 827 and Shri Chitta Ranjan Sana v. State of Tripura reported in [1990] 79 STC 51 (Gauhati). For the test of reversibility, he relied on Punjab Aromatics v. State of Kerala reported in [2008] 14 VST 519 (SC) and Dakini Health Foods Pvt. Ltd. v. State of Maharashtra in Appeal No. 6 of 2001 decided on March 5, 2005. He argued that a test of predominant component (palm oil is a majority factor in margarine) be applied and for which he relied on Shreeji Traders v. State of Gujarat reported in [1992] 86 STC 27 (Guj). He submitted that the product is a margarine though the manufacturer calls it nutralite table margarine. Its true character is not lost so the liability at 12.5 per cent cannot be determined and order passed by MSTT is legal. He relied on C. C. Mahajan and Co. v. State of Bombay reported in [1958] 9 STC 133 (Bom). He submitted that if the margarine is cla....
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....the paste of peanut and seasame are used to spread on bread and also used in hotels. It was held that utility, character composition of the product processed and the product emerged after the processing remains the same. No material change has taken place in the product as nothing was abstracted and nothing was added. In State of Maharashtra v. Ahura Enterprises S. T. A. No. 9 of 2001 dated August 22, 2003 of the Division Bench of the Bombay High Court, it was held that preparing a paste from fresh ginger and garlic by grinding them together and adding salt and preservatives and packing it in a airtight pouches and make it edible article does not change the essential characteristic. It was held that when the court is concerned with edible articles, some of the criteria found by the apex court are whether the entry article is a genus of which the test article is a species ; whether the essential characteristics of the entry article are still to be found in the new article ; whether there has been addition of external agents thereby making it different ; and whether there has been a process of transformation of such a nature and extent as to have resulted in the production ....
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....e court was whether pea-gravels fall within the category of goods described as metals, stone chips, any other products or sub-products arising out of bricks or stones. In the said judgment, the Division Bench explained different principles which are used as touchstone, common parlance rule, trade or commercial parlance rule, common sense rule of interpretation and the user test and it was held that application of the principles will depend on the facts and circumstances of each case. No test or tests can be said to be applicable to all cases. It was also held that if two views are possible regarding classification of certain goods, the benefit must go to the tax-payer. If a tax-payer seeks advantage, which was not intended by the Legislature but to which he was entitled on a construction of the statute he must be given that advantage. Usability of a product cannot be a sole factor to decide its classification:- Margarine is used for baking, cooking and nutralite is used for cooking and as a spread. It was argued that vegetable oil and margarine is also directly consumed by some people with chatni (spices) and spread on khakara and therefore, vegetable oil nutral....
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.... Sales Tax Act, 1959. The learned counsel for the Revenue/appellant draw our attention to the affidavit dated January 27, 2011 filed by the Joint Commissioner of Sales Tax, in which it was stated that Amul Lite which is manufactured by Amul and marketed by Gujarat Co-operative Milk Marketing Federation Ltd., is taxed at 12.5 per cent and under Schedule E, entry 1 of the Maharashtra Value Added Tax Act and nutralite is also manufactured by Amul. It is a similar product of Amul Lite by the respondents. For better understanding it is beneficial to reproduce a comparative table of ingredients nutralite and Amul Lite. Product Ingredients Nutralite Edible vegetable oils, water common salt, skimmed milk powder, emulsifiers and stabilizers, (E 471, E 322), class II preservatives (E202, E200), starch, sequestering agent (E 385), antioxidants (E319), vitamin A not less than 30 IU/g vitamin D 2 IU/g vitamin E 0.03 mg/g. Contains natural colours (E160a) and added flavour (nature identical flavouring substances). Amul Lite Refined vegetable oils, milk fat, common salt, skimmed milk powder, emulsifiers (E 322), stabilizer (E 471), class II preservative (E 202),....