2018 (7) TMI 1971

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....r, Commercial Tax holding that HPMC (Hydroxy Propyl Methyl Cellulose) Capsule Shells are taxable as per entry No.5 of Part-IV of Schedule-II of Madhya Pradesh VAT Act, 2002 and therefore, taxable @ 14%. 02- The facts of the case reveal that the petitioner is manufacturer of empty hard gelatin capsules (Empty Hydroxy Propyl Methyl Cellulose Capsule Shell) (hereinafter referred as 'Empty HPMC Capsule Shell'). The office of the Controller, Food and Drug Administration, M. P. has granted permission to the petitioner Company to manufacture EHPMC Capsule Shell as additional product under the Drugs Manufacturing Licence No.28/13/97 (Form No.28). 03- The contention of the petitioner is that empty HPMC Capsule Shell are made of Hydroxy....

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....in Capsule, it should be treated at par for the purposes of taxation like Gelatin Capsule Shell only. 06- Various other grounds were also raised, however, the learned Commissioner has passed an order dated 31/12/2016 holding that the Empty HPMC Capsule cannot be included under the category of drug and medicines, thus, is liable for taxation @ 14% per annum. 07- Learned counsel has placed heavy reliance upon the Drugs and Cosmetics Act, 1946 and has referred to definition of Drug. Section 3(b) of Drugs and Cosmetics Act, 1946 reads as under:- "Section 3(b) - "drug" includes - (i) all medicines for internal or external use of human beings or animals and all substances intended to be used for or in the diagnosis, treatm....

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....008) 13 STJ 161 (MP). 09- This Court has carefully gone through the statutory provision governing the field. Section 70 certainly empowers the learned Commissioner to pass an order in case of inclusion / exclusion of a particular entry / clarification in respect of a particular entry in the matter of payment of rate of VAT. 10- In the Madhya Pradesh VAT Act, 2002 there are three schedules covering variety of products and application of tax is as under:- Schedule Part No. of Product Entries Description I - 89 Tax Free Goods   II I 5 1% rate of tax   II 110 5% fate of tax   III 5 Product wise different rate of tax   III-A 10 Product wise differen....