SC dismisses revenue appeal against HC order classifying ‘Homeo Hair Oil’ as a ‘medicine’

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Categories: Advance Ruling
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SC upholds classification of product ‘Aswini Homeo Hair Oil’ manufactured by M/s. Aswini Homeo Pharmacy under Entry 37 of Schedule-I to the Andhra Pradesh General Sales Tax Act, 1957 (“APGST Act”) as a ‘medicine’ and not as ‘cosmetic product’ for AY 1994-1995 and 1995-1996.

Fact:

In the present case, the Commissioner of Commercial Taxes (“the appellant”) has filed an appeal against the High Court (“HC”) order issued in favour of M/s. Aswini Homeo Pharmacy (“the respondent” or “the assessee”).

HC earlier reversed the decision of the Commissioner and restored the assessment order passed by the jurisdictional Deputy Commissioner accepting assessee’s claim that the product manufactured by the name of ‘Aswini Homeo Hair Oil’ fall under Entry 37 of Schedule-I to APGST Act.

Issue Involved:

What will be the classification of ‘Aswini Homeo Hair Oil’ manufactured by the respondent?

Respondent’s Contention:

Respondent claimed that the hair oil manufactured by them contains ‘Arnica Mount Q, Cantharis Q, Cinchona Q and Pilocarpine Q’ which are covered in the Homeopathic Pharmacopoeia.

Further, emphasis was also placed on the certificate issued by the licensing authority of the State of Andhra Pradesh, certifying that the respondent was granted licence to manufacture Homeopathic medicine for external use as a drug under Section 3(b)(i) of the Drugs and Cosmetics Act, 1940 and Rule 2(d) of the Drugs and Cosmetics Rules, 1945.

Held:

The Hon’ble Supreme Court in Civil Appeal No(s). 9494-9495 of 2011 dated February 27, 2019 uphold the classification of product ‘Aswini Homeo Hair Oil’ manufactured by the respondent under Entry 37 of Schedule-I to APGST Act as a ‘medicine’ and not as ‘cosmetic product’.

It was further observed, that the fact of respondent using the Homeopathic Pharmacopoeia in manufacturing of the hair oil has not been traversed by the appellant. Neither has the Commissioner dealt with that contention of the respondent nor was such a plea taken before the HC by the appellant.

Hence, the Hon’ble Supreme Court found no reason to deviate from the conclusion reached by the HC that the product manufactured by the respondent was rightly assessed at the relevant point of time in the assessment years 1994-1995 and 1995-1996, as covered by Entry 37 of Schedule-I of the APGST Act.

Citation: TS-247-SC-2019-VAT

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