TaxTMI 
TaxTMI 
2024 (7) TMI 1106
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..../assessee and Mr. Swaroop Oorilla, learned Standing Counsel for Commercial Taxes, appearing for the respondent/Department. 3. These Tax Revision Cases pertains to sister companies known as M/s. Himani Limited and M/s. Emami Limited. Of these eleven Tax Revision Cases, three each have been filed by two assessees. Tax Revision Case Nos.193, 188 and 187 of 2004 have been filed by M/s. Himami Limited for the assessment years 1996-1997, 1997-1998 and 1998-1999. There are two Tax Revision Cases in respect of the company where the challenge has been made by the Department i.e. Tax Revision Case Nos.211 and 155 of 2004 challenging the order for the assessment years 1997-1998 and 1998-1999. Likewise, there are three Tax Revision Cases filed by M/s. Emami Limited i.e. Tax Revision Case Nos.182, 183 and 192 of 2004 for the assessment years 1998-1999, 1999-2000 and 2000-2001. Similarly, there are three Tax Revision Cases filed against M/s. Emami Limited by the Department, those are Tax Revision Case Nos.166, 169 and 156 of 2004 for the assessment years 1998-1999, 1999-2000 and 2000-2001. 4. The whole dispute revolves around six products being manufactured and marketed by the two sister c....
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....et another Tax Revision Case which was filed by the Department i.e. Tax Revision Case No. 161 of 2004 for the assessment year 1996-1997 which was dismissed for default vide order dated 20.07.2009. 8. There does not seem to be any further effort made for restoration of the said Tax Revision Case and by efflux of time, the assessment order so passed for the assessment year 1996-1997 has attained finality. Whatever be the effect of the same, we proceed to decide the substantive issue so far as the aforementioned remaining five Tax Revision Cases filed by the Department challenging the findings of the STAT. So far as (a) Himami Sonachandi Chavanprash (b) Himami Boroplus Antiseptic Cream (c) Himami Boroplus Prickly Heat Powder being ordered to be treated as drugs and not as a cosmetic i.e. treating these three products falling under Entry 37 and not under Entry 36 of the I Schedule of the Act and with a further direction to revise the assessment orders accordingly. 9. In the three Members Bench of the STAT, one of the Departmental Member is said to have taken a contrary view in respect of the aforesaid majority view of the STAT and all the appeals before STAT stood decided in acco....
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....d in favour of the petitioner/assessee. 14. Disputing the said finding, the learned Standing Counsel for the respondent/Department contended that the product has saffron in it and since saffron lends vigor to the body and glow to the skin, hence, the glowing and the luster of skin being qualities related to cosmetics, therefore, it has been brought under Entry 36 of 1st Schedule of the Act. Apart from this oral contention of the learned Standing Counsel appearing for respondent/Department, there was no documentary proof, material, literature or text with which the Department could sustain their contention while contending that Himani Sonachandi Chavanprash is a cosmetic and not a drug. 15. If we look at the definition of cosmetics as per Section 3 (aaa) which for ready reference is reproduced herein under: "(aaa) cosmetic means any article intended to be rubbed, poured, sprinkled or sprayed on, or introduced into, or otherwise applied to, the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance, and includes any article intended for use as a component of cosmetic" From the aforesaid definition it can be sa....
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....ntry 36 of 1st Schedule of the Act. The said product "Himani Boroplus Antiseptic Cream" while it was being applied for getting the license was required to reflect the composition and the books of reference under the ayurvedic literature with specific page numbers and chapters dealing with the same. From the details so furnished with the Government agency while obtaining license; the products, composition and book of reference was reflected, which for ready reference is reproduced herein under: Composition Percentage Books ref. With Pg.No. 1. Extract of Chandan (Santalum album) 1.0 Bhava Prakash (189) Raj Nighantu (397) Charak Samhita (62) 2. Extract of Tulasi (Occimum Sanctum) 0.4 Raj Nighantu (327) Bhava Prakash (509) 3. Extract of Kapoor Kachari (Hedychium spicatum) 1.5 Ayurved Samgraha (151) Charak Samhita {Su.4/30 (65), 4/37(67)} Bhava Prakash (247) 4. Extract of Nimba (Azadirachta indica) 1.0 Bhava Prakash (329) Charak Samhita {Su.4/14(62)} 5. Extract of Haridra (Curcuma longa) 0.3 Bhava Prakash (115) Bangasen Samhita (473-474) Ayurved Samgraha (137) Brihannighantu Ratnakara (Sha) (158) The Ayu....
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....nd wash etc. etc. As has been reflected in the rapper of the product/label of the product, it is preventive in nature and has curative and healing ayurvedic ointment and it is prescribed for dry skin diseases, cuts, burns, minor skin burns, wounds, chapped skins, furuncle impetigo and intertrigo. All of which by itself establish that it is not a cosmetic product or a toiletry product. Even the STAT has accepted the product to be having curative effect along with it being a healing ayurvedic ointment for curing the aforementioned skin disorders. 21. For the aforesaid reasons, we are of the considered opinion that the finding given by the STAT is a well-reasoned finding which does not warrant interference as no substantial material could be brought on record either before the authorities concerned or before this Court so as to disprove the findings given by the STAT. Thus, for the aforesaid reason also, the challenge by the Department so far as the finding given by the STAT stands negated. 22. The next product, the finding of which has been challenged by the State Government and its Department is the Himani Boroplus Prickly Heat Powder. However, perusal of the Tax Revision Case....
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.... under cosmetic. Curing pimples is a medicinal action. Curing body is also a medicinal activity. Merely, because one of the qualities is to improve glow of the skin it cannot be characterized as cosmetic. Nextly, it has to be seen whether the prickly heat powder is 'capable of being used' as cosmetic or toilet preparations and thereby falls under exclusion clause (c) of Entry 37 of I Schedule to the Act. As seen from the decision of the Hon'ble Madras High Court in V.C., Ramalingam & Sons and Another v. State of Tamilnadu and others reported in (2002) 127 APSTJ 382, the Legislature of Tamilnadu also brought out similar amendment to the entry relating to the medicine in TNGST Act in order to exclude products 'capable of being' used as creams, hair oils, tooth paste, tooth powders, cosmetics, toilet articles, soaps and shampoos from the entry 'medicines'. The said amendment was challenged before the Hon'ble Madras High Court. The Madras High Court while dismissing the Writ Petition observed as follows: "This classification does not discriminate against any system of medicine or against any of the licenses. All of them are treated alike. There is no hostile discrimin....
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.... 2009 (245) E.L.T. 71 (Ker.) and classified it as a medicated talcum powder, a classification that is primarily rooted in the product's composition, which includes medicinal ingredients. However, despite these medicinal properties, the specific legislative language of the concerned states, namely Kerala and Tamil Nadu, classifies such products as cosmetics. This classification highlights the dualistic nature of Nycil Prickly Heat Powder, which combines therapeutic properties such as zinc oxide & boric acid and with cosmetic usage. 24. On the other side Himani Boroplus Prickly Heat Powder also contains medicinal ingredients in a way that is similar to Nycil, such as zinc oxide (Jasad Bhasma), boric acid (Tankan Amla) and salicylic acid, a beta hydroxy acid. However the Himani Boroplus Prickly Heat Powder could potentially be classified differently due to the extra ingredient that is salicylic acid which makes the product drug. In particular, it could be classified as a drug, indicating a primary use for therapeutic or prophylactic purposes. 25. This product is not merely another addition to the endless array of cosmetic skincare products available on the market; it is meti....
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....fact that the powder is manufactured under a drug license, ensuring adherence to stringent quality and safety standards that may not apply to regular cosmetic products. Therefore, it is evident that due to the distinct medical benefits and therapeutic potential it offers, Boroplus Prickly Heat Powder rightfully belongs in the realm of drugs, rather than cosmetics. 29. Considering the presented arguments and the discussion has thoroughly examined the classification of Himani Boroplus Prickly Heat Powder in the context of the Schedule 1st of APGST Act. This product, unlike Nycil Prickly Heat Powder has predominant medicinal elements which has a soothing and protective effect on the skin, which can be attributed to its cosmetic nature. It only contains medicinal ingredients such as Zinc Oxide, Boric Acid and Salicylic Acid, which gives it therapeutic and prophylactic properties, making it more than just a cosmetic product. 30. Taking into account the decision of the Allahabad High Court in the case of Himani Ltd. v. Comm. Of Commercial Tax 2011 (263) E.L.T. 335 (All.) and the common parlance test, it is clear that the public perceives products like Himan Boroplus Prickly Heat Po....
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....ic product in 1st Schedule of the Act. 36. On account of giving up of the challenge to "Himani Nirog Dant Powder Lal" product, the only two products which now remains to be considered and adjudicated upon are (1) Himani Navaratan Oil and (2) Himani Gold Turmeric Ayurvedic Cream. The STAT in the impugned order has given findings of both this products being cosmetic product which falls under Entry 36 of 1st Schedule of the Act. Whereas the contention of the learned counsel for the petitioner/assessee is that both these products are in fact drugs as is reflected under Entry 37 of 1st Schedule of the Act. The contention of the learned counsel for the petitioner/assessee in so far as Himani Navaratan Oil is concerned, was that, the product is a medicinal product and is prescribed for keeping the head cool, relieve headache, helpful in providing sound sleep, effective memory aid, it tones up body muscles, removes tiredness, useful in minor burns and cuts and also prevents premature hair fall. None of the actions as mentioned in the label of the product cater to the definition of a cosmetic product or a toiletry product. 37. It was the contention of the learned counsel for the petit....
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....or) 0.05 gm • Chiranjib Banousadhi, Vol. III, P. No. 119-126. • Ayurveda Samgraha, P. No. 143, 276, 468, 475, 514, 585, 1224. • Bhava Prakash, Vol. I, P. No. 174. 11. PUDINA KA PHOOL (Menthol) 2.3 gm • Brihatnighantu Ratnakara, P. No. 71. • Banousadhi Chandrodaya by Sri Chandraraj Bhandari Vol. VI, P. No. 136-137. 12. GANDHA PATRA 0.2 gm • Ayurveda Samgraha, P. No. 700. 13. KAPOOR KACHRI 0.2 gm • Indian Materia Medica] by K.M. Nadkarni, Vol. I, P. No. 608, • Bhava Prakash, Vol. I, P. No. 248. 14. GULAB PHOOL 0.05 gm • Indegenous Drugs of India by R.N. Chopra, P. No. 238, • Bhava Prakash, Vol. I, P. No. 489. 15. KESUT 0.05 gm • Indian Medicinal Plants, Vol. II, P. No. 1361-1363. • Bhava Prakash, Vol. I, P. No. 430. 16. BRAHMI 0.01 gm • Chiranjib Banousadhi, Vol. I, P. No. 24. • Indegenous Drugs of India, by R.N. Chopra, P. No. 352 • Bhava Prakash, Vol. I, P. No. 462. 17.SURASAR (Alchahol) 0.5 ml • Arka Prakash, P. No. 81. Incorpora....
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....ric Ayurvedic Cream also was a product which has been licensed as an ayurvedic drug by the Drug Controller based on the composition and these compositions being from the ayurvedic texts with the intended cure for skin diseases and also as an anti-inflammatory cream, it is claimed to be a cream which helps in healing the wounds, cure heat boils, pimples, antiseptic and anti-microbial etc. For ready reference, the composition and the reference of the ayurvedic texts in respect of the ayurvedic products used in the manufacture of the said cream is hereby reproduced: Composition & Book Reference Percentage Books reference with page number Extract of: Turmeric (HARIDRA) 16% Ayurveda Sangraha - 137 Bharatia Banousadi - IV 1158 - 60 By Dr. K.P. Biswas Sandal Wood (CHANDAN) 6% Ayurveda Sangraha - 144 Bharatia Banousadi - IV 1025 - 31 Chiranjib Banousadi - I 174 Vativart (BENAMUL/USHIR) 0.5% Ayurveda Sangraha - 151 Bharatia Banousadi - V 1292 - 94 Chiranjib Banousadi - III 191 Saussuroa Lappa (COSTUS/KUSTHA) 0.5% Ayurveda Sangraha - 1073 Bharatia Banousadi - III 650 Chiranjib Banousadi - VI 254 - 59 Mehandi (LAWSONIA/MA....