TaxTMI 
TaxTMI 
TaxTMI 
2018 (10) TMI 147
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..... The relevant facts leading to the application are set out as under. 2.1 The applicant has informed that the product manufactured and distributed by the applicant is Shaheen-Misri. The 'Dust' and 'Rava' of tobacco is used for manufacturing of the product. It is submitted that the Masheri is roasted or burnt powdered tobacco. It is applied on teeth and gums due to addiction of Nicotine. It is commonly used as tooth powder. The addiction of this product leads to number of diseases especially oral cancer, gum disease, etc. 2.2 The 'Shahin Bhajki Masheri' is known in the market as tooth powder for cleaning the teeth. He has relied on the judgement dated 06/07/2011 passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Branch at Ahmedabad and judgement of the Supreme Court dated 08/03/2016 in Civil Appeal No.3207 of 2006. Further he stated that the Hon. Supreme court of India had held the product as tooth powder covered under Chapter Heading 3306.10 as against Chapter Heading no.2204.99 which is for tobacco product. The apex court in clear terms held that the product is tooth powder and not the Tobacco product. 2.3 Mr. Vinayak P. Patkar,....
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....while to have a closer look at the statutory provisions under the MVAT Act, 2002 and relevant schedule entry under the Act. 3.1 The charging Section- 6: Levy of sales tax on the goods specified in the Schedules:- (1) There shall be levied a sales tax on the turnover of sales of goods specified in column (2) in Schedule B, C, D or, as the case may be, E, at the rates set out against each of them in column (3) of the respective Schedule. Thus, section-6 of MVAT Act provides that the tax is to be levied on commodity which is sold. In fact, the dealer liable to pay tax, should discharge the tax liability as per the charging section. 3.2 The scheme of levy of tax as per provided schedule. For the purpose of determination of rate of tax on particular commodity MVAT ACT, 2002 provides Five schedules namely, A,B,C,D and E. The rate of tax indicates that tax on goods to which the entry relates shall be charged on the basis of the sale price, the tax being equal to such percentage of the sale price as is indicated against the respective entry under which the goods fall in that schedule. The classification of goods as per schedule is as under. Sr. No. Schedule Goods covered are taxabl....
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....t excluding those specified in schedule 'C'. - Nil % 1.4.2010 to 7.4.2011 A-45 Sugar and fabrics as described from time to time in column (3) of the First Schedule to the Additional Duties of Excise [Goods of Special Importance], Act, 1957 (58 of 1957) as it stood prior to the date on which the Finance Act, 2011 comes into force, but excluding those specified in schedule 'C'. - Nil % 8.4.2011 to date 45A (a) unmanufactured tobacco covered under Tariff Heading No. 2401 of the Central Excise Tariff Act, 1985 (5 of 1986) - Nil % 1.4.2007 to 31.3.2012 (b) biris covered under tariff item No 24031031, 24031039, of the Central Excise Tariff Act, 1985 (5 of 1986). The Centra Excise Tariff Item No 24031090 has been deleted by Corrig. Dated 09.07.2007 45A (a) unmanufactured tobacco covered under Tariff Heading No. 2401 of the Central Excise Tariff Act, 1985 (5 of 1986); - Nil % 1.4.2012 to 31.3.2013 (b) deleted w.e.f. 1.4.2012 Explanation- For the removal of the doubts, it is hereby declared that the unmanufactured tobacco shall not include unmanufactured tobacco when sold in packets under t....
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....ate expressions includes producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting any goods. The Masheri is roasted or burnt powdered tobacco. The salt is added to the tobacco and it is burnt and packed. In common parlance, it is understood in its popular sense, and in conversant with the class of people uses it as tooth powder. There is no doubt that it is the product of tobacco. It is applied on gum for consumption of Nicotine. It is also to be noted that for the purpose of MVAT ACT, 2002 the schedule entry provided was A-45A- as Unmanufactured tobacco covered by Tariff heading 2401for earlier periods. The appellant has stated that the Hon. Apex court held that the product is tooth powder and covered by the Excise heading 3306. So the product is manufactured tobacco product. Hence the masher is manufactured tobacco product 4.2 Test of common parlance:- We have dealt with the term "Tobacco product" provided in the schedule entry D-12.The conforming term tobacco product is not defined under MVAT ACT, 2002. Since we are dealing with Sales Tax Statute, it is necessary to refer the principles laid by various court authorities to....
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....us Commissioner of Sales Tax, Mumbai and another: (2010) 30 VST 435 (Bom.), Raman Board Ltd. versus State of Karnataka, 2015 (3) TMI 1048 (Kar.) The larger bench of Apex court in the case of Indo International Industries, 2002-TIOL-333-SC-CT. The various court decision pertain to sales tax laws lessons that in the absence of a statutory definition in precise terms; words, entries and items in taxing statutes must be construed in terms of their commercial or trade understanding, or according to their popular meaning. In other words, they have to be construed in the sense that the people conversant with the subject matter of the statute, would attribute to it. Resort to rigid interpretation in terms of scientific and technical meanings should be avoided in such circumstances. It is needless to say that this would not apply when the Legislature has expressed a contrary intention such as by providing a statutory definition of the particular entry, word or item in specific, scientific or technical terms. In that event, the interpretation ought to be in accordance with the statutory definition or meaning and not according to common parlance understanding. Hence, the test of common parla....
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....Excise v. Wood Craft Products Ltd. (1995) 3 SCC 454, 462, resort has to be had to the residuary heading only when a liberal construction by the specific heading cannot cover the goods in question. b) The Hon Bombay High Court in the case of M/s Kirloskar Oil Engines Ltd. Versus The Commissioner of Sales Tax Maharashtra came across with classification of bearing and held that As far as the bearings are concerned, there is special Entry which deals with bearings of all types including Ball or Roller bearings. This Entry is Schedule Entry C-II-146. There being a specific/special Entry for bearings (Entry C-II-146), it is not correct to hold that the bearings sold by the applicant would fall either under Entry C-II-102(2) [as a components, parts of a motor vehicle] or under Entry 0-11-135 read with the Notification Entry A-35 [as a components and/or parts of tractors specifically designed for agricultural use] - When there is a specific Entry in the schedule to a Taxing Statute, the same would override a general Entry. 15. We are unable to agree with the submissions of the applicant on this point. As far as the bearings are concerned, there is special Entry which deals with bearings ....
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.... safely concluded that the specific schedule entry overrules general schedule entry. 05 The legal submission of applicant: - The Applicant has relied on the decision of Hon. Apex court judgment in own case which is related to Excise Act. The issue involved was whether the product is classified in CETH 3306 or otherwise. The apex court has applied common parlance test and since the impugned product is used as tooth powder has ruled that it falls under chapter 33 of Excise Act. On similar chronology the appellant tried to persuade that the impugned products are held as tooth powder in Excise Act and hence they are covered by E-1 of MVAT ACT, 2002. On the backdrop of discussion held hereinabove, the contention, legal submission and arguments advanced by Ld. Advocate requires consideration. Hence, it is worthy to refer the provisions under MVAT ACT, 2002 and principles laid down by various court authorities to interpret the schedule entry under sales tax statutes. Hence, it is necessary to see whether decisions under Excise Act are squarely applicable to MVAT ACT or otherwise. 5.1 Whether decisions of court authorities under Excise Act when decided on the basis of provisions under ....
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....in Ayurveda Sar Sangrah which is authoritative text on Ayurvedic system of treatment and is notified in the First Schedule to the Drugs and Cosmetics Act, 1940 and the said product is sold under the name 'Dant Manjan Lal' which is the name specified for the said product in Ayurveda Sar Sangrah, the common parlance test is not applicable. As a matter of fact, this contention is based on misplaced assumption that Chapter Sub-heading 3003.31 by itself provides the definition of Ayurvedic Medicine and there is no requirement to look beyond. c) We have gone through the judgments and found that the various court authorities had considered the provisions under Excise Act (such as, meaning of medicaments, cosmetics as per relevant act, the Tariff headings related to chapter 30,33,34 of Excise Act, the notes appended to these chapters which describes coverage of goods or otherwise, packing, labeling of the products, the various defined terms as per Excise Act etc.) and classified or interpreted the nature of impugned products as medicaments or otherwise for the purpose of Excise Act. Under the Excise Act, the term medicament for Ayurvedic medicines and cosmetics are referred to dif....
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....text of the Entry Tax Act, we should accept that industrial inputs include packing materials and that therefore, by parity of reasoning, "inputs" under the Entry Tax Act should also include packing material. This argument has therefore correctly been turned down by the High Court of Karnataka in the Nestle case. e) The Hon. Apex court in the case of Falcon Tyres Ltd. Versus State of Karnataka and others 2006 (7) TMI 316 has come across the meanings employed in other acts would be relevant or otherwise. It is held that- The learned counsel for the appellant relied upon Karnataka Forest Development Corporation Ltd. V. Cantreads Pvt. Ltd. [1994] 4 SCC 455, to contend that rubber is an agricultural produce. This was a case under the Karnataka Forest Act, 1963 for the purposes of levy of the forest development tax. The meaning assigned to the agricultural produce in the present Act is different from what was assigned to it in the Karnataka Forest Act, 1963. The same is not relevant. Similarly, he cited two other judgments which are not germane to the point and need not even be noticed. The Legislature has deliberately excluded certain items from being agricultural produce and therefor....
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.... Under MVAT ACT, 2002 the product related to tobacco is classified according to class of good as tobacco product. Since specific schedule entry (class of goods) is available under MVAT ACT, 2002, the impugned product is to be classified in that entry only. Hence, we respectfully opined that the ratio of Hon. Apex Court judgment set on different facts is not squarely applicable to case in hand. The applicant has stated that the impugned product being tooth powder is to be covered by residuary entry cannot be allowed when the specific entry D-12 available for classification of goods. h) Moreover, for academic purpose, it is also seen that the product is covered by The Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 or COPTA -2003. As per the provisions of COPTA the product is not to be used by children below 18 years unlike in case of normal tooth powder. As per the provisions of COPTA the warning message that the product is injurious to heath has to be printed on the packing of the product unlike normal tooth powder. 5.2 Mr. Patkar, Advocate relied on the judgment in case of Bh....
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....es so warrant of any other person similarly situated. The dealer has not submitted any evidences as to grant the benefit .The issue of prospective effect is to be considered on fact of the case. (a).The Hon. Bombay high Court in case of Lalbaugcha Raja Sarwajanik Ganeshotsav Mandal (MVAT Tax Appeal No. 10 of 2015) while interpreting the section 56 of MVAT ACT, 2002 laid dawn the principles regarding the granting of prospective effect and observed in relevant Para that- "10. On plain reading of both the subsections (1) and (2) of Section 56, it is apparent that the Commissioner may direct that the determination shall not affect the liability under the MVAT Act of the applicant or if the circumstances so warrant, of any other person a similarly situated, as respects any sale or purchase effected prior to a determination. Therefore, this is not a mandate but a discretionary power vested in the Commissioner. This discretionary power has to be exercised and while exercising it, the Commissioner, has to be guided by certain inbuilt checks and safeguards. He cannot in the garb of giving relief of the nature contemplated by subsection (2) totally wipe out the liability of any and every ....
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....o protect the liability of applicant and also sub-serve the larger public interest. These powers are coupled with duty to see whether the applicant has really strong reasons, which necessitate the use of discretionary powers. These powers cannot be used as per wish and whims of authority. (b) In present case, as discussed above, there is no ambiguity in the provisions and there is no scope, for any doubt arising out of the provisions. However, the various court authorities have upheld the principles of common parlance test for interpretation of schedule entries provided in sales tax statutes. The schedule entries have been changed under MVAT ACT, 2002. The applicant fails to establish his case. He is very well aware about the rate of tax of said products. (c) The applicant has preferred the path of litigation in spite of the clear legal position of the terms provided in the schedule entry D-12 of MVAT ACT, 2002. The applicant is well aware of the pros and cons of litigations along with its cost. The schedule entry related to tobacco and its product is very specific in nature and does not create any situation which gives different logical meanings. As discussed above, it is settl....