TaxTMI 
TaxTMI 
TaxTMI 
2017 (1) TMI 202
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.... why the differential rate of 4% which is applicable on confectionery items, be not levied. It was submitted on behalf of the assessee that there is 97% of sugar in "Swad" and taking into consideration judgment of this court in the case of CTO v. Heeralal Murlidhar [STR 199/1988, decided on 2.7.1992], it is exempt and as per the formula written on the said candy, it consists of rock salt (senda namak), black salt (kala namak), citric acid (nimbu ka sat), pepper (kali mirch), cumin (jeera), carom seeds (ajwain), ginger powder (sonth) & long pepper root (piplamool), and after mixing all these ingredients including sugar, it is digestive and it is taken as a medicine. However, the AO was not satisfied and applied the rate of 10% and levied differential tax and interest. 3. The matter was assailed before the Dy. Commissioner (Appeals), who partly allowed the appeal granting relief on interest. 4. Both, the assessee as well as revenue, were not satisfied and preferred appeal before the Tax Board. While the assessee assailed about the rate of tax, the revenue challenged the relief on account of interest. The Tax Board was satisfied with the explanation and held that it cannot be said t....
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....nnai 2003 (154) ELT 326 (SC), UOI v. G.D. Pharmaceuticals Ltd & Another 2000 (118) STC 19, CTO, Jodhpur v. M/s Prithvi Singh 2014 (38) TUD 269, Panama Chemical Works v. UOI 1992 (62) ELT 241 (M.P.), B.Shah & Co., Surat v. State of Gujarat 1971 (28) STC 5, United Trading Agency v. Addl. Commissioner of Commercial Taxes, Bangalore 1997 (104) STC 182, Commissioner of Commercial Tax v. Dabar India Ltd. 2000 (119) STC 37, The State of Rajasthan & Anr v. M/s. Deys Medical Stores Ltd. 2007 (19) TUD 97, Commissioner of Commercial Tax, Madhya Pradesh v. Dawar Brothers 1998 (111) STC 319, Rashtra Deep Laboratory v. Commissioner of Sales Tax U.P. 1983 53 STC 419, Addl. Commissioner, Commercial Taxes v. Life Guard Distributors 2001 (121) STC 102, CTO v. Khandelwal Drug Agencies [STR 358/1999, decided on 6.7.2007], ACTO, Jaipur v. M/s. Shri Ayurved, Jaipur [STR 159/2005, decided on 11.10.2007]. 7. I have considered the arguments advanced by the learned counsel for the parties and perused the impugned order, so also the judgments minutely. 8. The petitions were admitted on the following substantial questions of law : "(i) Whether the fact that Swad Tablet is consumed not for the purpose of t....
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....or internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals, as may be specified from time to time by the Central Government by notification in the Official Gazette, after consultation with the Board;" 10. On perusal of the above, in my view, any drug for even prevention of disease or disorder in human beings or animals, and is manufactured exclusively in accordance with the formulae prescribed in the authoritative books, can be said to fall within the definition of a "drug" and once a common parlance test is applied, after noticing the ingredients, as noticed earlier, "Swad" cannot be said to be a toffee, and one takes the same in case of a stomach disorder or for digestion purposes. It can easily be observed that majority of the ailments begin with stomach and majority of the illness emanates from stomach disorder and by & large, any human being to keep his stomach in a proper manner or condition, even for digestion purposes, takes such tablet like "Swad", which cannot be said to be a toffee or a candy. In my view, merely because it is available in a tea stall or a betel shop or other various places where co....
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.... standard quality or not, but the drug contains liquid glucose without label declaration. However, the Drug Controller agreed with the contention of the petitioner that the liquid glucose is a preservative in Ayurvedic as well in Allopathic drugs. A letter of the Director Indigenous System of Medicines Dr. Sharma, dated 23-12-1989 was also produced, which says that liquid glucose is commonly used as preservative and binding agent and its presence has no effect on the active ingredient and the further opinion of the Expert that despite the presence of liquid glucose the character of the drug shall remain Ayurvedic, has also been considered by the Drug Controller. Finding the aforesaid opinion and the argument sound and comparing the various ingredients in Hall's and Vicks tablets and their preparation as compared to SWAD which are licenced as Ayurvedic medicines by the State of Maharashtra and Andhra Pradesh, the Controller of Foods and Drugs Administration, Bhopal discharged the notice against the petitioner and held that the product is an Ayurvedic product. As such the fact that the Drug Controller, agreeing with the opinion of the two Experts, has reiterated its earlier findi....
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....ve filed a rejoinder wherein it has been stated that the opinion of the Director is erroneous and should not be acted upon. We fail to understand as to how the opinion of the Experts and that of the Drug Controller can be held to be erroneous in absence of any contrary opinion of Experts being on record. Much emphasis has been laid that according to the definition of Ayurvedic preparation there is a clear interdict on the use of any ingredient than the one shown in the text and that is why the word 'only' has been used in the definition. It is manifest that the word 'only' has been used in respect of the ingredients of the product and the preservative items in a particular product cannot be treated as active ingredients. Consequently we hold that the product of the petitioner is an Ayurvedic preparation and has rightly been classified by the Assistant Collector under Item 3003.30 of the Central Excise Tariff. 36. As regards the tenability of the petition it has been strenuously argued that the petition is premature. But as discussed above the law on the point is practically settled that the Court should not interfere in a matter at the stage on show cause notice a....