TaxTMI 
TaxTMI 
TaxTMI 
2017 (6) TMI 657
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....Added Tax Act, 2003 will not apply and on the same basis, the products sold by the opponent fall under the entry no. 28(A)(i) of the Gujarat Value Added Tax Act, 2003?" 2. The three Tax Appeals arise out of three different judgments of the Value Added Tax Tribunal. The contents of the judgments are substantially similar. We may record facts from Tax Appeal No.357 of 2013. The appeal is filed by the State challenging the judgment of the Value Added Tax Tribunal dated 23.03.2012. The respondent assessee is engaged in manufacturing and selling various Ayurvedic products including Bhrungraj hair oil, Brahmi hair oil, Bhallatak dantmanjan and Ayurvedic dantmanjan. Contending that these products are pharmaceutical drugs and therefore, would fall under entry 28A of the Schedule II of the Gujarat Value Added Tax Act, 2003 ('the VAT Act' for short), the assessee applied to the competent authority for determination of this issue in terms of section 80 of the VAT Act. Before the authority, the assessee made detailed submissions with respect to all four products in question. It was pointed out that the hair oils are made from Ayurvedic products applying Ayurvedic methodology. These h....
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....ll Arnicare hair oil and Healwell soft skin cream. These are homeopathic drugs for skin care. In Tax Appeal No.765 of 2013, the products involved are medicinal soaps. In the said appeal, similar but slightly differently worded question was framed. For the purpose of the said appeal also, we adopt the common question reproduced earlier. 7. Learned AGP Shri Chintan Dave submitted that with effect from 01.08.2009 entry 28A of the Schedule II came to be materially amended. Before the amendment, the exclusion clauses were not there. It was only after 01.08.2009 that these clauses were introduced in the statute. Post such amendment, therefore, any cosmetics and toilet preparations such as tooth paste, tooth powder, hairoil etc., would not be included under entry 28A. He submitted that the Tribunal committed a serious error in holding to the contrary. The main thrust of the argument of the learned AGP was that even if a product were to be of a drug or medicine, as long as the same is toothpaste, tooth powder, hair oil, face or body cream or soap, the same would not fall within entry 28A. He incidentally also questioned whether these products can be stated to be drugs and medicines. Accor....
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....cluding tooth paste, tooth powder, hair oil, face and body lotions, creams and soaps. In the context of these statutory changes, two questions arise; first is, are the products in which the assessees are dealing drugs or medicines or whether they are cosmetics or toilet preparations. The second question would be if these products are drugs and medicines, would they still be excluded by virtue of the exclusion clauseB because they happened to be toothpaste, tooth powder, hair oil, body lotions or soaps. 13. Insofar as the first question is concerned, we have noticed that the assessee had produced voluminous evidence before the competent authority as well as before the Tribunal to contend that the products in question were either Ayurvedic or homeopathic drugs. It was pointed out that these products which are in the nature of hair oils, tooth paste, skin creams and medicated soaps, are manufactured from Ayurvedic or homeopathic substances with scientific methodology. They are meant for specific diseases used under medical advice and surely not available without prescription. 14. Most significantly it was provided that they were considered drugs under the Drugs and Cosmetics Act and....
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....hat the product was a medicine and not a cosmetic. The Revenue approached the Supreme Court. The Supreme Court had rejected the appeal observing as under: "All these Appeals can be disposed of by this common Judgment. The question in these Appeals is whether the concerned Respondents' product i.e. "Mahabhringraj Tail" is classifiable, for the period from 131983 to 2821986 under Tariff Item 14E (as claimed by the Respondents) or Tariff Item 14F (as claimed by the Appellants) and for the subsequent period under Tariff Item 30.03 (as claimed by the Respondents) or under Tariff Item 33.05 (as claimed by the Appellants). In our view, these cases are squarely covered by the decision of this Court in the case of Meghdoot Gramudyog Sewa Sansthan v Commr. Of C. Ex., Lucknow reported in 2004 (174) E.L.T. 14. In this case it has been held that "Bhringraj Tail" is classifiable under Tariff Item 30.03. The same logic would also apply for the earlier period and the product would therefore be classified under Tariff Item 14E. We are in respectful agreement with the decision. The Appeals therefore fail and stand dismissed. There shall be no order as to costs." 18. From the above judicia....