TaxTMI 
TaxTMI 
2019 (6) TMI 1132
X X X X Extracts X X X X
X X X X Extracts X X X X
....red to the judgment of a Division Bench of this Court in "Commissioner of Trade Tax/Commercial Tax, Dehradun vs. M/s Perfetti Van Melle (India) Pvt. Ltd., Rishikesh; 2008 NTN (Vol.38)-211"; the judgment of the Allahabad High Court in "Associated Distributors Limited Vs. Commissioner of Trade Tax, 2002 UPTC 173"; and the order of the Madras High Court in Ms/ Cadbury India Ltd. Vs. the Assistant Commissioner (CT), (order in "Writ Petition No.21346 of 2007 dated 01.07.2009"), and held that the items under dispute, i.e. different flavours of 'Halls', could not be treated as proprietary Ayurvedic medicine so as to fall within the category of drugs, medicine and pharmaceutical preparations etc. enumerated under Items No.41 of Schedule II (B) of the Act; and the assessee was liable to be taxed @12.5% on every point of sale. The appeals were dismissed, and the orders passed by the Joint Commissioner (A) and Assessing Authority were affirmed. Aggrieved thereby, the present revision petition has been filed. 4. Shri S.K. Posti, learned counsel for revision-petitioner (assessee), would submit that the subject goods 'Halls' were manufactured under a drug licence issued by the Competent Authori....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... candy and a confectionary disguised as an Ayurvedic medicine. 6. It is not in dispute that the product 'Halls' is manufactured in the State of Karnataka under a drug licence issued by the Director of Ayurvedic and Unani Services of the State of Karnataka. The Tribunal has, in its order, also held that the subject goods were sold in the State of Uttarakhand on stock transfer; that Pudina (Menthol) and Nilgiri Tailam (Eucalyptus Oil)/ Eucalyptus Galbules) are the active agents used in the manufacture of the said product; the active agents, in the said product, constitute merely 0.33% of the tablet; Shakara (Sucrose/Cane Sugar), Shakara (Liquid Glucose), and Water form its base; and Nimbuka Satwam and Soya Bean Oil are used for taste. 7. Goods falling within the ambit of Entry 41 of Schedule II (b) are liable to tax at 4%. Entry 41 of Schedule II (B), of the Uttarakhand VAT Act, reads thus: "Drugs, medicines and pharmaceutical preparations (Alopathic, Ayurvedic, Homeopathic and Unani) including vaccines syringes and dressings, medicated ointments produced under drug license and the light liquid paraffin of I.P. Grade". 8. While the assessee contended, before the Tribunal, that t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....evant provisions of the Act, and the Rules, which relate to the grant of a licence. 11. Section 33 EEB of the Act stipulates that no person shall manufacture, for sale or for distribution, any Ayurvedic drug except in accordance with such standards as may be prescribed in relation to that drug. Section 333EC(c) stipulates that the State Government may, by notification in the Official Gazette, specify, in this behalf, that no person, either by himself or by any other person on his behalf, shall manufacture, for sale or for distribution, any Ayurvedic drug except under, and in accordance with the conditions of, a licence issued for such purpose under this Chapter by the prescribed authority. 12. Rule 154 (1) of the Drugs and Cosmetics Rules, 1945 (hereinafter called the "Rules") stipulates that, subject to the conditions of Rule 157 being fulfilled, a licence, to manufacture for sale any Ayurvedic drug, shall be issued in Form 25D. Rule 154 (2) of the Rules stipulates that a licence, under this Rule, shall be granted by the licensing authority after consulting such expert in Ayurvedic system of medicine, as the case may be, which the State Government may approve in this behalf. 13....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ute that all the ingredients are mentioned in the authoritative text books on Ayurveda. In fact, in the case of appellant in Civil Appeal No. 2072/1996, the products satisfy the definition in Section 3(h) of Drugs & Cosmetics Act as 'patent or proprietary' Ayurvedic medicines also. Further, the manufacture of this medicament is being done under the Ayurvedic drug licence issued by competent authority......." ........ In terms of the order passed by the CEGAT in the case of Richardson Hindustan Ltd. v. Collector of Central Excise (1988 (35) 424 (Tribunal) which has been affirmed by this Court and similar view taken in other cases referred to supra, the following clear propositions and findings emerge:- '(a) That the words 'Ayurvedic Medicine' not having been defined in the Central Excise and Salt Act, 1944 or the Central Excise Tariff Act, 1985, the common parlance test would have to be resorted to find out whether a medicine is treated as an Ayurvedic medicine by the public; (b) That it is necessary that the ingredients of Ayurvedic Medicine should be mentioned in authoritative books on Ayurvedic Medicines.' We are also of the opinion that when there....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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% is said to be paraffine wax, while the medicinal part i.e. Menthol is only 2%. Vicks Vaporub has been held to be medicament by this Court in CCE v. Richardson Hindustan Ltd. 1989 (42) ELT A100. Therefore, the fact that use of medicinal element in a product was minimal does not detract from it being classified as a medicament. In order to be a medicinal preparation or a medicament it is not necessary that the item must be sold under a doctor's prescription. Similarly availability of the products across the counter in shops is not relevant as it makes no difference either way......" [emphasis supplied] 19. The law declared by the Supreme Court, in Puma Ayurvedic Herbal (P) Ltd, is that the quantity of medicament used in a particular product is not a relevant factor; in order to be a medicinal preparation or a medicament, it is not necessary that the item must be sold under a doctor's prescription; and availability of the product, across the counter in shops, is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....red under Ayurvedic medicine manufacturing license No. 157 ISM (HR). Annexure-I to the counter-affidavit filed in these revisions shows that the Deputy Director-cum-Licensing Authority of Directorate of Ayush Haryana, has renewed the license of the respondent M/s. Perfetti Van Melle (India) Pvt. Ltd. for manufacturing Ayurvedic/Siddha drugs. Annexure-3 to the counter-affidavit shows that the Licensing Authority and Director of Ayurvedic, Haryana, has approved the preparations of 'Chlormint' and 'Happydent', manufactured by the respondent/assessee under Drugs and Cosmetic Act, 1940. It is not disputed that there are three kinds of medicines available in the market. Firstly, the medicines which can be purchased from only approved chemist/pharmacist that too only on the prescription of the registered medical practitioner. Secondly, the medicines, which can be purchased from approved chemist/pharmacist but not necessarily required to be prescribed by registered medical practitioner And thirdly, the medicines, which can be purchased without prescription of any medical practitioner and can be, had not only form the shops of the approved chemists but also form other shops. It is not dis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ured under an Ayurvedic medicine manufacturing licence issued by the Licensing Authority in the State of Haryana. Thereafter, the Division Bench observed that the mere fact that the said product could be purchased without prescription of any medical practitioner, and can be had from the shops of approved chemists and from other shops also, would not denude it of the characteristics of an Ayurvedic medicine, if the formulae of its constituents were to be found in prescribed books of Ayurvedic medicine. 22. While prescription by a doctor is not necessary for a product to be treated as an Ayurvedic medicine, would the mere fact that a licence, to manufacture the said product, has been issued by the Licensing Authority for Ayurvedic system of medicine, suffice to treat the said product as an Ayurvedic medicine, in the State of Uttarakhand? 23. The Tribunal has relied on the judgment of the Allahabad High Court in 'Associated Distributors Ltd. V. Commissioner of Trade Tax' 2002 UPTC 173 (dated 9.11.2001), wherein it was held that mere obtaining a licence under the Drugs Act, and getting clearance under the said Act, would not entitle a person to obtain benefits under the said Act. 24....