TaxTMI 
TaxTMI 
TaxTMI 
2015 (11) TMI 1319
X X X X Extracts X X X X
X X X X Extracts X X X X
....No. 1) and filed the aforesaid proceeding questioning the order No. CTS-78/2007/137 passed by the Commissioner of Taxes on May 31, 2008 whereby goods, mentioned therein were classified as cosmetics and toilet preparations treating such goods to be goods, not covered under entry 21 of the Fourth Schedule to the Assam Value Added Tax Act, 2003 (in short, "the said Act or the Act of 2003") further holding such goods are liable to be taxed at the rate of 12.5 per cent in terms of entry 1 of the Fifth Schedule to the said Act. 3. Being aggrieved by such classification, the petitioner had approached this court by way of W.P. (C) No. 3023 of 2008 contending that the articles, so mentioned in the impugned order, being ayurvedic medicines, fall within the purview of entry 21 of the Fourth Schedule to the Act of 2003 and as such, they were to be classified as drugs and medicines and therefore, taxes on such goods are to be collected at four per cent at first point of sale. 4. In support of such contention, it has been contended that the said goods are primarily used as drugs and medicines for preventive and curative purposes. It has also been stated that in common parlance too, such goods ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icles are capable of being used as cosmetics and toilet preparations, make such a conclusion inevitable. In support of such contention, the decision in C.C.E. v. Richardson Hindustan Ltd. [2004] 9 SCC 156, is relied on. Therefore, the claim of petitioner No. 1 that tax on the items in question are to be collected at four per cent is found to be without any substance . . . argues Standing counsel for the Tax Department. 10. In W.P. (C) No. 3599 of 2008, the petitioners are GD Pharmaceuticals Pvt. Ltd., and its Director, Sri Ambika Prassanna Basu (hereinafter collectively referred to as petitioner No. 2) had questioned the order No. CTS 78/2007/147 passed by the Commissioner of Tax on June 3, 2008 whereby product "Boroline" manufactured by the petitioners-company had been classified as cosmetic falling outside the scope of entry 21 of the Fourth Schedule of the Act of 2003 and is, therefore, liable to be taxed at 12.5 per cent in terms of entry 1 of the Fifth Schedule to the said Act. 11. In W.P. (C) No. 5622 of 2008, the petitioners are M/s. Sharma Ayurvedic Pvt. Ltd., (a Pvt. Ltd. Co.) Ms. M.P. Agencies (a partnership-firm), Ms. Champalal Bhanwarlal (a partnership-firm), (hereina....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing provisions of entry 1 of the Fifth Schedule to the Act so as to collect tax on those goods at 12.5 per cent in terms of entry No. 1 of the Fifth Schedule to the Act of 2003. 16. Before addressing competing arguments, we find it necessary to have a look at the provisions of entry No. 21 of the Fourth Schedule as well as entry No. 1 to the Fifth Schedule of the Act of 2003. For ready reference those provisions are reproduced below:- "Sl. No. Description Rate of tax paise in the rupee 21 Drug and medicine including vaccines, disposable hypodermic syringes, hypodermic needles, catguts, sutures, surgical dressings but excluding anti-malaria drugs mentioned in the entry at serial 65 of the First Schedule (On maximum retail price basis) Explanation.-The expressions 'drugs and medicine' shall not include products capable of being used as cosmetics, toilet preparations including tooth-paste, tooth powder, cosmetics, toilet articles and soap. 4 "Sl. No. Description Rate of tax paise in the rupee 1 All other goods not covered by First, Second, Third and Fourth Schedule 12.5" 17. In that connection, we also find it necessary to have a look at the decisions, rendered ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....The extent or the quantity of medicament used in a particular product will also not be a relevant factor. Normally, the extent of use of medicinal ingredients is very low because a larger use may be harmful for the human body. The medical ingredients are mixed with what is in the trade parlance called fillers or vehicles in order to make the medicament useful. To illustrate an example of Vicks Vaporub is given in which 98 per cent is said to be paraffin wax, while the medicinal part, i.e., menthol is only two per cent. Vicks Vaporub has been held to be medicament by this court in Collector of Central Excise v. Richardson Hindustan Ltd. [2004] 9 SCC 156. Therefore, the fact that the use of medicinal element in a product was minimal does not detract from it being classified as a medicament." 19. Similar decision has been rendered in the case of Commissioner of Central Excise [2003] 132 STC 251 (SC) : [2003] 5 SCC 60 as well as V.C. Ramalingam and Sons [2002] 127 STC 382 (Mad.). 20. On reading of above entry No. 21 alongside the decisions, referred to above, it would appear clear that drugs and medicines clearly falls within the purview of entry 21 of the Fourth Schedule to the Act ....