TaxTMI 
TaxTMI 
2005 (10) TMI 506
X X X X Extracts X X X X
X X X X Extracts X X X X
.....". First appeals filed by the applicant were rejected. Applicant filed second appeals before the Tribunal, which have also been rejected. Heard Sri Ashok Kumar , learned counsel for the applicant and Sri U.K. Pandey, learned Standing Counsel. Learned counsel for the applicant submitted that the Tribunal illegally relied upon the decision of this court in the case of Balaji Agency, Gorakhpur v. Commissioner of Sales Tax reported in [1994] UPTC 184. He submitted that in the case of Balaji Agency, Gorakhpur v. Commissioner of Sales Tax reported in [1994] UPTC 184, Notification No. ST-II-1233/X10(1)-1974 dated April 14, 1974 was considered in which in the entry "cosmetics and toilet requisites. . . . ." Vaseline was included while for the assessment year in dispute Notification No. S.T.-2-5784/X-10(1)-80-U.P. Act 15/48-Order 81, dated September 7, 1981 is relevant in which Vaseline is not specifically included. He further submitted that it is medicine because it is used to heel up cuts and fissures of skin and not for beautification of body. In support of his contention he relied upon various decisions, namely, Deys Medical Stores Limited v. Commissioner, Trade Tax reported in [20....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of tax 1 to 4 . . . . . . . 5. All kinds of cosmetics and toilet preparations for beautification or care of the face, skin, hair, nails, eyes or brows, but not including soaps, safety razor blades, hair combs, tooth pastes, tooth powders, and other dentifrices, tooth brushes and kumkum. M or I 12% " The words "cosmetic and medicines" have not been defined in the statute. Therefore, it is necessary to look into the dictionary meaning of the aforesaid two words. "Cosmetic" has been defined as follows: Collins Advanced Learners Dictionary "Cosmetic are substances such as lipstick or powder, which people put on their face to make themselves look more attractive". The Concise Oxford Dictionary "Intended to beautify hair, skin or complexion, etc.,; imitating or restoring normal appearance; intended to improve appearances". The Encyclopedia Americana International Edition "Cosmetics are primarily manufactured preparations for beautifying the wearer, they are articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractive ness, or altering the appearanc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....disease American Indian give control over natural, or magical forces to Act as protective or healing charm". Chamber Dictionary "Medicine N. any substance used (esp. internally) for the treatment or prevention of disease; a drug. Medicinal used in medicine curative, relating to Medicine." Oxford Dictionary "Medicine, substance esp. one taken internally, used in medicine in the art of restoring and preserving health esp. by means of remedial substances and regulation diet, etc., as opposed to surgery and obstetrics." Now let us examine various decisions of the apex Court and the various High Courts in which the principles of classification of goods have been laid down and the words "cosmetic and toilet preparation and medicine" have been considered with reference to the product. The honourable Supreme Court in the case of Ramavatar Budhaiprasad v. Assistant Sales Tax Officer [1961] 12 STC 286, held that the word "vegetable" in Schedule of Central Provinces and Berar Sales Tax Act must be construed not in any technical sense nor from the botanical point of view but as understood in common parlance. In the case of Collector of Customs, Bombay v. Swastic Woollens (P) Ltd. reporte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on comes within the ambit of medicinal preparation and is not toilet preparation. The distinction between medicinal preparation and toilet preparation was pointed out by the court, taking into consideration the scheme of the Medicinal and Toilet Preparation (Excise Duty) Act, 1955 and the nature of product involved. The court came to the conclusion that after shave lotions are toilet preparations and not "medicinal preparations". The relevant part of the judgment is quoted below: ". . . . . Therefore, in order to come within the ambit of 'medicinal preparations' the intended use of the article must be for treatment, mitigation or prevention of disease. The article must be used for the purpose of either curing or mitigating the disease after its symptoms have appeared or in prevention of any disease. If the intended use of the article is not for any one of the aforesaid purposes, it cannot be described as a 'medicinal preparation'. Therefore, the main question to be examined is whether 'shaving' results in some kind of a disease which requires treatment by a medicine so that it may be cured or its effect is mitigated or at least an effort has to be made to prevent the happening of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....revention of dandruff, falling hair and baldness and for beautifying ultimately the hair and the appearance of the person using it. A hair-oil may cool the brain or improve the system and induce sound sleep, but nonetheless it does not because of these qualities become a medicinal preparation. Now, the word 'cosmetic' has been defined in Webster's International Dictionary as meaning 'any external application intended to beautify and improve the complexion, skin or hair'. Other dictionaries also give the same meaning. The meaning of the word 'toilet', as given in Webster's International Dictionary, is 'act or process of dressing, especially, formerly of dressing hair, now usually cleansing and grooming of one's person'. A 'toilet preparation' is any preparation which is intended to affect, and conceivably to improve the bodily appearance. The words 'cosmetics' and 'toilet', being words of everyday use, must be construed not in any technical or scientific sense, but as understood in common parlance and in commercial language. A hair-oil intended to be applied to the hair and supposed to act as a hair-tonic and to prevent dandruff, falling hair and baldness and to cool the brains doe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s drugs and marketed as drugs. In the case of B. P.L. Pharmaceuticals Ltd. v. Collector of Central Excise reported in [1997] 104 STC 164, the Supreme Court was concerned with "selsun" anti-dandruff preparation containing 2.5 per cent of selenium sulphide, which is the full therapeutic limit permissible under the pharmacopoeia. The said product was manufactured under the drug licence as a medicine, put up as a medicine, used under doctor's advice and sold through chemist's shops on a doctor's prescription. It was held medicine as it was understood in common parlance as medicine. In the case of B. Shah & Co. v. State of Gujarat reported in [1971] 28 STC 5, the Gujarat High Court held nycil-medicated powder as a medicine. The honourable Gujarat High Court on a consideration of definition of word "medicines" held as follows: "It is thus clear that the word 'medicine' is susceptible of two distinct meanings and that in its ordinary sense as applied to human ailments, it means something which is administered either internally or externally in the treatment of disease or the relief of sickness. It is now well-settled that the names of articles, sales as well as purchases of which are....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s a preventive measure or as a preventive medicine. It is the use of a commodity which normally should be determining factor for interpreting whether the said commodity is covered under a particular item. It is well-settled that common parlance meaning has to be applied while interpreting entries under the fiscal statute and the courts have said time and again that it is not safe to be always guided by the dictionary or technical meanings. It is, therefore, not necessary to deal with various authorities cited by the learned counsel for the assessee on the point. Since in common parlance Odomos is used as a medicine and is known as a medicine, in my opinion, the Tribunal was fully justified in holding that Odomos was covered under the notification dated 7th September, 1981." Special leave petition against the aforesaid judgment has been dismissed by the honourable Supreme Court which is reported in [1987] 65 STC FRSC 5 (Commissioner of Sales Tax v. Balsara Hygiene Products Ltd. [S.L. P. Civil No. 9950 of 1986 dated February 23, 1987]). In the case of Balaji Agency, Gorakhpur v. Commissioner of Sales Tax reported in [1994] UPTC 184, Himani Boroplus Antiseptic Cream came up for cons....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as not been upheld by the apex Court in the case of G.D. Pharmaceuticals Ltd. v. State of West Bengal reported in [1998] UPTC 1205, in view of the decision of the apex Court dated September 15, 1997 in SLP(C) No. 17949 of 1997 (CC. 5883/97), Union of India v. G. D. Pharmaceuticals Limited [2000] 118 STC 19 (SC). As stated earlier, the decision is of no help to the assessee in the present case because in the case of Union of India v. G.D. Pharmaceuticals Limited [2000] 118 STC 19, the apex Court held that Borolene is a medicine on the basis of its composition. Reliance is also placed on the decision in the case of Commissioner of Commercial Taxes, Madhya Pradesh v. Dawar Brothers, Indore reported in [1998] 111 STC 319; [1998] UPTC 1211, in which the Madhya Pradesh High Court has held that Vicco Vajradanti paste and powder as drug and medicine following the decisions of the Karnataka and Bombay High Courts. In that case, it was found that Vicco Vajradanti paste and powder or face cream possess medicinal properties for the treatment of tooth decay, swollen and bleeding gums and periodical disorder of teeth. In the case of Commissioner of Central Excise v. Sharma Chemical Works repo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that it is an Ayurvedic medicament. If the Department was still entertaining any doubts, they could have referred the matter to the Adviser, Ayurveda/ Sub-Commissioner in the office of Drug Controller, Director General of Health Services, New Delhi. This was not done." The aforesaid decision is also of no help to the assessee as in that case, the Drug Controller opined that it is an Ayurvedic medicament and it was found that the oil can be used for treatment of headache, eye problem, night blindness, reeling head, weak memory , hysteria, amnesia, blood pressure, insomnia, etc. The dosages required are also set out on the label. The product was registered with Drug Controller and was being manufactured under a drug licence. It was further found that the main criteria for determining classification is normally the use it is put to by the customers who use it. The burden of proving that Banphool oil is understood by the customers as an hair oil was on the Revenue, which could not be discharged. In the case of Deys Medical Stores Limited v. Commissioner, Trade Tax, U.P. reported in [2004] 134 STC 1 (All); [2004] 24 NTN 222, Keo Karpin hair vitaliser, baby oil, massage oil and anti ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....product is being manufactured under the drug licence is not enough to classify the product. (iv) Language of the entry has to be given effect. (v) How the product is known in scientific sense or technical sense is not much relevant. (vi) Dictionary meaning is a good guide but not conclusive. (vii) For being a medicine a product must have a effect either to cure the disease or to prevent and intend use must be for treatment, mitigation or prevention of disease and in common parlance and commercial sense known as medicine. (viii) Cosmetic and toilet preparations are products which are used for beautification or care of face, skin, hair, nails, eyes or brow and are known as cosmetic and toilet preparation in common parlance and commercial sense. (ix) Onus lies on the Revenue to prove that product falls under particular entry. In the present case, Tribunal has recorded categorical finding that the white petroleum jelly, which is commonly known as Vaseline is used for the care of skin. Learned counsel for the applicant is not able to challenge this finding. In the aforesaid notification the item used for the care of face, skin is covered under the entry "All kinds of cosmetics. ....