2012 (2) TMI 465

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....art III of Schedule II, these attract commercial tax at the rate of 12 per cent. The entries read as follows: "41. Scents, perfumes, hair tonics, hair creams, hair oils, hair shampoo, depilatories, face creams, snows, lipstics, rougue, nail polish and other cosmetics including medicinal preparation thereof. 49. Tooth paste, tooth powder, hair oils, face powder, talcum powder, toilet soap, washing soap and other toilet articles including medicinal preparations thereof, combs, brushes, razors and razor blades". There is yet another entry which is relevant and which attracts only eight per cent commercial tax or sales tax which is entry No. 11 of Part IV of Schedule II, which reads as follows: "11. Drugs and medicines excluding tho....

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....ool powder which is basically a powder to be used in cases of prickly heat. It is not disputed that the powder is scented and therefore could possibly be used as a substitute for talcum powder. We have given due thought to the matter. The words in which entries 41 and 49 of Part III of Schedule II have been drafted leaves little doubt that the words "including medicinal preparation thereof" used along with the cosmetic items mentioned in the entries are intended to avoid evasion of tax by including some medical ingredients in cosmetic items in attempt to take them to entry 11 of Part IV which attracts mere eight per cent of tax. It is quite obvious that because of public sentiments, drugs and medicines have to carry a lower rate of tax a....

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.... The Supreme Court also cited the case of Manisha Pharma Plasto Pvt. Ltd. v. Union of India reported in [1999] 112 ELT 22 (Delhi) which was a case of Nycil prickly heat powder which was also held not to be an ordinary powder but falling in the category of medicament. We are also of the view that Dermicool powder which is described as a prickly heat powder is also commonly understood to be of use in treating prickly problem and not as an ordinary talcum powder. It is not the case of the State that the price of Dermicool powder is substantially less than ordinary talcum powder, because of which common person may be tempted to use that scented powder as a substitute for ordinary talcum powder in place of ordinary talcum powder. If such s....