IMPORTANT POINT
The classification of products as cosmetics or drugs under the APGST Act hinges on their intended use and composition, significantly affecting tax rates.

ORDER :

P.SAM KOSHY, J.

These are eleven Tax Revision Cases assailing the common order passed by the Sales Tax Appellate Tribunal, Hyderabad (hereinafter referred to as ‘STAT’) in T.A.No.1124 of 2000, T.A.No.1125 of 2000, T.A.No.1301 of 2001, T.A.No.1305 of 2001, T.A.No.503 of 2003, T.A.No.504 of 2003, T.A.No.505 of 2003 and T.A.No.506 of 2003 decided on 31.03.2004.

2. Heard Mr. Lakshmi Kumaran, learned counsel along with Mr. Narendra Dave, Mr. Sumanth Chanda and Ms. Anushka Rastogi, learned counsel for the petitioner/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 concerns. Those are Navaratan Oil, Gold Turmeric Ayurvedic Cream, Nirog Dant Power Lal, Boroplus Antiseptic Cream, Boroplus Prickly Heat Powder and Sonachandi Chavanprash.

5. The whole issue involved in the instant set of Tax Revision Cases are whether the aforementioned products manufactured by two sister concerns would fall within the purview of cosmetics or drugs under the APGST Act, 1957 (for short, ‘the Act’). The question substantially to be decided is, whether the aforementioned products would fall under Entry 36 or Entry 37 of the CGST Act and TGST Act? The issue primarily arises on account of the fact that if the products would fall under the classification of a cosmetic, then it becomes leviable of GST at the rate of 20%. On the other hand, if these products are to be treated as drugs within Entry 37, then these products would be leviable of duty at the rate of only 10%.

6. (A) Of the six products, the STAT has held (i) Navaratan Oil (ii) Gold Turmeric Ayurvedic Cream and (iii) Nirog Dant Power Lal to be products which are otherwise either cosmetics or toiletry products. Thus, it was this finding of the STAT which has been challenged by the petitioner/assessee through the instant Tax Revision Cases.

(B) Whereas, the STAT further also held that the three products (i) Boroplus Antiseptic Cream (ii) Boroplus Prickly Heat Powder and (iii) Sonachandi Chavanprash have been held to be drugs and not cosmetics and it is this declaration of these three products as drugs which has led to the Department filing the Tax Revision Cases. At the same time, the assessee is fighting the exclusion of these three products (i) Navratan Oil (ii) Gold Turmeric Ayurvedic Cream and (iii) Nirog Dant Powder Lal as drugs which led to filing of Tax Revision Cases by the assessee.

7. As can be seen from the previous paragraphs, there are two set of Tax Revision Cases. For convenience sake, we take up the Tax Revision Cases which have been filed by the Department first. Those are Tax Revision Case No.155 of 2004 for the assessment year 1998-1999, Tax Revision Case No.166 of 2004 for the assessment year 1998-1999, Tax Revision Case No.169 of 2004 for the assessment year 1999-2000, Tax Revision Case No.211 of 2004 for the assessment year 1997-1998 and Tax Revision Case No.156 of 20