# M/s Dabur India Ltd v. Commissioner Of CGST, Ghaziabad & Ors

- **Citation:** (2020) 1 ILRA 1326
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-01-17
- **Case number:** Writ Tax No. 1308 of 2019
- **Bench:** Biswanath Somadder, Ajay Bhanot
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-dabur-india-ltd-v-commissioner-of-cgst-ghaziabad-ors-45538
- **Pages:** 13

## Headnote

and Services Tax Act, 2017: Section 101;
Uttar Pradesh Goods and Services Tax
Act, 2017; Customs Tariff Act, 1975:
Chapter
38
-
Appellate
Authority
for
Advanced Ruling for Goods and Services Tax,
has classified the product in question, 'odomos'
as mosquito repellant, whereas the petitioner
contends it to be a medicament. Holding in
favour of Revenue, Court held as follows:

The "Common Parlance test" or the
"Market Identity Test" for classification
1328 INDIAN LAW REPORTS ALLAHABAD SERIES
of the product was satisfied - Appellants
pitched the product in their sale material and
advertisements as a mosquito repellant. It is
matter of common knowledge that public or
market identity of the product is as a mosquito
repellant. 'Odomos' is not normally prescribed
as a medicine by a registered medical
practitioner and is available in stores and
establishments of all types including 'kirana
stores', their sale not being restricted to
chemists/druggists alone. (Para 7, 8, 30, 31 &
32)

"Chemical Composition Test" - The mere
fact that the ingredients are purified or
added with some preservatives does not
really
alter
their
character
-
Active
ingredient of the product is NNDB which is the
improved version - formula of DEET. The
essential quality of DEET is mosquito repelling.
The NNDB was introduced to overcome the
itchiness caused by the DEET. The basic
component of the product is DEET while the
quality enhancements are created by the
NNDB. There is no scientific or expert evidence
that NNDB imparts its essential character to the
product. (Para 10, 25, 35 to 38)

B. General Interpretation Rules: Rule 3 -
Resort cannot be had to a general entry
called "others" or any other heading
when the product clearly falls under a
specific classification heading -
The description under heading no. 38089191,
i.e., "Repellants for insects such as flies,
mosquito" is far more specific as compared to
the description under the other heading under
consideration, i.e., heading no. 30049099
which is "Other". (Para 11, 12, 45 & 46)

C. Constitution of India: Art. 226 - Scope
of judicial review - The order of Appellate
Authority can be judicially reviewed and
not appealed against.

Judicial review is confined to the decisionmaking process and is not directed against the
decision itself. The court in judicial review
examines the manner in which the decision
was made. Merely because two views are
possible, a court sitting in judicial review shall
not exercise its discretion in favour of an
alternative view to that of the authority. In the
facts of the present case, two views are not
even possible. (Para 53)

Writ Petition dismissed. (E-4)

Precedent followed: -

## Text

_Characters 0–39,876 of 42,100. This is a partial read: ask again with offset=39876 for what follows._

1 All. Ajay Kumar Singh Khandelial Vs. Principal Comm. Of Income Tax, Gorakhpur & Anr. 1327
it is found that there has been a procedural
impropriety in the decision-making process, it
would not be permissible for the High Court to
interfere in the decision-making process. It is
also equally well settled that it is not
permissible for the Court to examine the
validity of the decision but this Court can
examine only the correctness of the decisionmaking process."

29. Applying the above principles to the
facts of the present case, it is seen that the
reassessment proceedings were initiated on
account of the fact that it was discovered that
the assessee had misrepresented in his return
with regard to the payments made to M/s Jalan
Synthetics of Rs.3,40,000/- in cash which were
deposited in their bank account and such a
transfer was not admissible in the light of
provisions of Section 40A(3) of the Act and
Rule 6DD of the Rules, 1962, and therefore, in
the reassessment proceedings the said amount
was added to the income of the assessee.

30. The reassessment order was
assailed by moving an application under
Section 264 of the Act, 1961. The
assessing authority has duly considered the
application of the assessee and after
considering the same has recorded a
finding that the assessee has clearly
misrepresented in his return as well as
audit report with respect to Section 40A(3)
of the Act and Rule 6DD of the Rules,
1962 and therefore the case of the
petitioner is not covered by any of the
exceptions. No evidence was led by the
assessee to demonstrate that the cash was
deposited at the instance of M/s Jalan
Synthetics, so as to give benefit of Rule
6DD of the Rules, 1962, to the petitioner.

31.

Learned
counsel
for
the
petitioner-assessee
also
could
not
demonstrate that the impugned order is
bereft of reasons or that it is perverse or
that it has failed to consider the relevant
material or document and therefore in
absence of any of such infirmity the
contention of learned counsel for the
petitioner cannot be accepted and the writ
petition is liable to be dismissed.

32. In the light of discussion made
above, this Court does not find any merit
in the contentions raised by the petitioner.
The writ petition is accordingly dismissed.
----------
(2020)1ILR 1326

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 17.01.2020

BEFORE
THE HON'BLE BISWANATH SOMADDER, J.
THE HON'BLE AJAY BHANOT, J.

Writ Tax No. 1308 of 2019

M/s Dabur India Ltd. ...Petitioner
Versus
Commissioner Of CGST, Ghaziabad & Ors.
 ...Respondents

Counsel for the Petitioner:
Sri Atul Gupta, Sri Abhishek Kumar Tripathi

Counsel for the Respondents:
A.S.G.I., Sri Ashok Singh

A. Tax - Classification - Central Goods
and Services Tax Act, 2017: Section 101;
Uttar Pradesh Goods and Services Tax
Act, 2017; Customs Tariff Act, 1975:
Chapter
38
-
Appellate
Authority
for
Advanced Ruling for Goods and Services Tax,
has classified the product in question, 'odomos'
as mosquito repellant, whereas the petitioner
contends it to be a medicament. Holding in
favour of Revenue, Court held as follows:

The "Common Parlance test" or the
"Market Identity Test" for classification
1328 INDIAN LAW REPORTS ALLAHABAD SERIES
of the product was satisfied - Appellants
pitched the product in their sale material and
advertisements as a mosquito repellant. It is
matter of common knowledge that public or
market identity of the product is as a mosquito
repellant. 'Odomos' is not normally prescribed
as a medicine by a registered medical
practitioner and is available in stores and
establishments of all types including 'kirana
stores', their sale not being restricted to
chemists/druggists alone. (Para 7, 8, 30, 31 &
32)

"Chemical Composition Test" - The mere
fact that the ingredients are purified or
added with some preservatives does not
really
alter
their
character
-
Active
ingredient of the product is NNDB which is the
improved version - formula of DEET. The
essential quality of DEET is mosquito repelling.
The NNDB was introduced to overcome the
itchiness caused by the DEET. The basic
component of the product is DEET while the
quality enhancements are created by the
NNDB. There is no scientific or expert evidence
that NNDB imparts its essential character to the
product. (Para 10, 25, 35 to 38)

B. General Interpretation Rules: Rule 3 -
Resort cannot be had to a general entry
called "others" or any other heading
when the product clearly falls under a
specific classification heading -
The description under heading no. 38089191,
i.e., "Repellants for insects such as flies,
mosquito" is far more specific as compared to
the description under the other heading under
consideration, i.e., heading no. 30049099
which is "Other". (Para 11, 12, 45 & 46)

C. Constitution of India: Art. 226 - Scope
of judicial review - The order of Appellate
Authority can be judicially reviewed and
not appealed against.

Judicial review is confined to the decisionmaking process and is not directed against the
decision itself. The court in judicial review
examines the manner in which the decision
was made. Merely because two views are
possible, a court sitting in judicial review shall
not exercise its discretion in favour of an
alternative view to that of the authority. In the
facts of the present case, two views are not
even possible. (Para 53)

Writ Petition dismissed. (E-4)

Precedent followed: -

1. Oswal Agro Mills Ltd. And others Vs.
Collector of Central Excise and others, 1993
Supp (3) SCC 716 (Para 18)

2. Commissioner of Central Excise, Nagpur Vs.
Shree Baidyanath Ayurved Bhavan Limited,
(2009) 12 SCC 419(Para 19)

3. Dunlop India Ltd. Vs. Union of India and
others, (1976) 2 SCC 241 (Para 21)

4. Indian Aluminium Cable Ltd. Vs. Union of
India and others, (1985) 3 SCC 284 (Para 22)

5. Reliance Cellulose Products Ltd. Hyderabad
V. Collector of Central Excise, Hyderabad-I
Division, Hyderabad, (1997) 6 SCC 464 (Para
23)

6. Shree Baidyanath Ayurved Bhavan Ltd. Vs.
Collector of Central Excise, Nagpur, (1996) 9
SCC 402 (Para 24)

7. Naturalle Health Products (P) Ltd. Vs.
Collector of Central Excise, Hyderabad, (2004)
9 SCC 136 (Para 25)

8. Puma Ayurvedic Herbal (P) Ltd. Vs.
Commissioner, Central Excise, Nagpur, (2006)
3 SCC 266 (Para 26)

9. Commissioner of Central Excise, New Delhi Vs.
Cannaught Plaza Restaurant Private Limited, New
Delhi, (2012) 13 SCC 639 (Para 27)

10. Commissioner of Central Excise, Nagpur Vs.
Shree Baidyanath Ayurved Bhavan Limited,
(2009) 12 SCC 419 (Para 28, 46)

Precedent Distinguished: -

1. M/s Balsara Hygiene Products Limited, 1986
UPTC 367 (All.) (Para 52)

Present petition is against order dated
19.08.2019, passed by the Appellate
1 All. M/s Dabur India Ltd. Vs. Commissioner of CGST, Ghaziabad & Ors.
1329
Authority for Advance Ruling for Goods
and Services Tax, Uttar Pradesh.

(Delivered by Hon'ble Ajay Bhanot,J.)

1. The petitioner has invoked the
extraordinary jurisdiction of this Court
under Article 226 of the Constitution of
India, being aggrieved by the order dated
19.08.2019 passed by the Appellate
Authority for Advance Ruling for Goods
and Services Tax, Uttar Pradesh. The order
assailed
in
the
writ
petition
dated
19.08.2019 has been passed under Section
101 of the Central Goods and Services Tax
Act, 2017 and Uttar Pradesh Goods and
Services Tax Act, 2017.

2. By means of the impugned order
dated 19.08.2019, in the instant writ
petition, the Appellate Authority has
upheld the ruling of the Authority for
Advance
Ruling
classifying
odomos
(product in issue), under HSN 38089191
of Chapter 38 of the Customs Tariff Act,
1975. The petitioner has also prayed that a
writ in the nature of mandamus to be
issued for classification of the product
odomos as medicine under heading no.
3004 of the Customs Tariff Act, 1975.

3. Sri Atul Gupta, learned advocate for the
petitioner contends that the product in question
odomos is a medicament and has been
incorrectly classified as a mosquito repellent. The
Appellate Authority misdirected itself in law by
overlooking the fact that the product odomos has
all characteristics of a medicine and is used as
such. He further submits that the chemical
composition of the product in question also
establishes that the essential character of the
product is that of a medicine.

4. Learned advocate for the Revenue
on the other hand submits that the product
was
correctly
classified
under
the
appropriate entry / heading by the Authority
for Advance Ruling as well as the Appellate
Authority under the Act. Learned advocate for
the Revenue also pointed out the process of
reasoning adopted by the authorities below and
the material in the record, to contend that there
was no flaw in the decision making process.

5. Heard the learned advocate for the
parties.

6. The controversy will be decided
by us in the following sequence. The
salient findings of the impugned order
passed by the Appellate Authority shall be
followed by a summarisation of the nature
and scope of an enquiry to determine the
classification of products under fiscal
statutes. The authorities in point shall be
detailed thereafter. The narrative shall be
taken forward by consideration of the
decision making process and the nature of
findings by the authority below within
limits of judicial review. Finally, the
correctness of the order shall be seen in
light of such discussion.

7. A perusal of the impugned order
dated 19.08.2019 passed by the Appellate
Authority, reveals that the line of enquiry
made by the Appellate Authority into how
the appellant / petitioner identified and
sold the product in the market yielded the
following results:

"13.6. As stated in preceding
paragraphs,
the
appellant
declare
prominently on the packing of the goods
under reference that it is "mosquito
repellent cream". The advertisement and
publicity of these goods is also done as a
mosquito repellent. It would also not be
out of place to mention that the appellant's own
websitewww.dabuar.com, describes Odomos
1330 INDIAN LAW REPORTS ALLAHABAD SERIES
as a 'mosquito repellent'. No doubt, that
characteristic of these goods, which aid in
prevention of vector borne diseases by
preventing mosquito bites, is also mentioned;
however, it is a matter of common knowledge
that public or market identity of the product is
as a mosquito repellent."

8. After investigation into the
characteristics
of
the
product
as
understood in common parlance or as
perceived by the common-person or the
market and its usage, the Appellate
Tribunal set forth the following findings :-

"13.6. ...All of the above to state the
common truth that the primary motive of the
common person, for using materials like the
subject goods, is to save and protect
themselves from mosquito bites even if there is
no or negligible incidence of mosquito borne
diseases in their localities. This is also borne
out by the fact that odomos is not normally
prescribed as a medicine by a registered
medical practitioner and is available in stores
and establishments of all types including
"kirana stores", their sale not being restricted to
chemists/druggists alone. It neither controls the
disease for which mosquitoes are carrier nor
develops preventive characteristics inside
human body to fight against vector borne
diseases. Therefore, the market identity in
common parlance of the subject goods is as a
mosquito repellent and their usefulness in
preventing mosquito borne diseases (again
derived from their characteristic quality of
being a mosquito repellent) is of a
subsidiary/supplementary nature."

9. On the foot the aforesaid enquiry,
the Appellate Tribunal held as follows:

"13.7. ...However, first of all, as
stated hereto before, the primary test of
classification is that of common parlance,
applying which, we unequivocally arrive
at the identity of the product as a mosquito
repellent."

10. The Appellate Authority while
upholding the conclusions of the Authority
for Advance Ruling on the chemical
composition of the product in question
found as under:

"13.7. ...We also observe, that
the appellants have stated that the active
ingredient in their product is NNDB which
is an improved version/formula of DEET,
the active component of many mosquito
repellents.
The
substance
DEET
is
mentioned
in
the
schedule
to
the
"Insecticides Act, 1968" as an insecticide
and by corollary, its improved version, i.e.,
NNDB would also be an insecticide. In
this context, it is pertinent that mosquito
repellents are classified at heading no.
38089191 of the Customs Tariff as a sub-
category of insecticides."

11. Coming to the final and the
decisive issue of the correct classification,
the Appellate Authority looked to the
previous classification of the product
under the Central Excise regime. Further
in view of the unaltered composition &
unchanged of the product decided the issue
thus:

"13.4. We observe that the
applicant was clearing the same goods i.e.
'Odomos' as mosquito repellent under
Chapter heading 3808 before the advent of
GST, i.e., under the Central Excise regime.
Further, there is no change in the
composition or intended usage of these
goods after the introduction of GST and
the
packing
thereof
bears
a
clear
declaration that the product therein is a
mosquito repellent cream."
1 All. M/s Dabur India Ltd. Vs. Commissioner of CGST, Ghaziabad & Ors.
1331

12.

The
Appellate
Authority
invalidated the argument to classify the
product under heading no. 3004909 under
Heading No.3004 in the following terms:

"13.4.
...Undoubtedly,
the
description under heading no. 38089191,
i.e., "Repellents for insects such as flies,
mosquito"
is
far
more
specific
as
compared to the description under the
other heading under consideration, i.e.,
heading no.30049099 which is "Other"
(meaning medicaments other than all those
explicitly specified in the other subheadings of heading no.3004)."

13. Finally, in the wake of the
aforesaid
reasoning,
the
Appellate
Authority conclusively ruled as follows :-

"In
view
of
the
foregoing
discussions and findings we hereby uphold
the
Ruling
in
Order
No.25
dated
20.02.2019 of the Authority for Advance
Ruling that "Odomos is well covered
under Chapter 38 of Customs Tariff Act
and is classified under HSN 38089191."

14. The contours of an enquiry into
classification
of
goods,
have
been
delineated by the authority. The judicial
pronouncements
on
the
subject
are
consistent and have laid down the law with
clarity.

15. The revenue raising intent of the
taxing statute for which the products are
differently
classified
is
the
guiding
philosophy of such enquiry. Consequently,
the understanding of the product in
popular parlance / commercial language
and its usage in the market are adopted,
while scientific and technical meanings of
the terms and expressions used are
eschewed.

16. In case the scientific and
technical
meanings
attached
to
the
products stand at variance to the popular
understanding
or
perception
of
the
product, the former will yield to the latter.
The manner in which the consumers use
the product and perceive its nature, is a
step in furtherance of the enquiry. The
object, characteristics and composition of
the
product
are
also
factored
in
determining the classification of the
product.

17. The narrative will now be
reinforced with good authority.

18.

The
general
rules
of
interpretation of taxing statutes provide the
setting for construing the tariff entries and
will guide the judgment of this Court. In
Oswal Agro Mills Ltd. and others v.
Collector of Central Excise and others,
reported at 1993 Supp (3) SCC 716, the
Hon'ble Supreme Court summarized the
canons of interpretation of taxing statutes
thus:

"4. The provisions of the tariff
do not determine the relevant entity of the
goods. They deal whether and under what
entry, the identified entity attracts duty.
The goods are to be identified and then to
find the appropriate heading, sub-heading
under which the identified goods/products
would
be
classified.
To
find
the
appropriate
classification
description
employed in the tariff nomenclature
should be appreciated having regard to the
terms of the headings read with the
relevant provisions or statutory rules or
interpretation
put
up
thereon.
For
exigibility to excise duty the entity must
be specified in positive terms under a
particular tariff entry. In its absence it
must
be
deduced
from
a
proper
1332 INDIAN LAW REPORTS ALLAHABAD SERIES
construction of the tariff entry. There is
neither intendment nor equity in a taxing
statute. Nothing is implied. Neither can we
insert nor can we delete anything but it
should be interpreted and construed as per
the words the legislature has chosen to
employ in the Act or rules. There is no
room for assumption or presumptions. The
object of Parliament has to be gathered
from the language used in the statute. ...
Therefore, one has to gather its meaning in
the legal setting to discover the object
which the Act seeks to serve and the
purpose of the amendment brought about.
The task of interpretation of the statute is
not a mechanical one. It is more than mere
reading of mathematical formula. It is an
attempt to discover the intention of the
legislature from the language used by it,
keeping always in mind, that the language
is at best an imperfect instrument for the
expression of actual human thoughts. It is
also idle to expect that the draftsman
drafted it with divine prescience and
perfect and unequivocal clarity. Therefore,
court would endeavour to eschew literal
construction if it produces manifest
absurdity or unjust result. In Manmohan
Das v. Bishun Das a Constitution Bench
held as follows:

"..
The
ordinary
rule
of
construction is that a provision of a statute
must be construed in accordance with the
language used therein unless there are
compelling reasons, such as, where a
literal construction would reduce the
provision to absurdity or prevent the
manifest intention of the legislature from
being carried out."

19. The Hon'ble Supreme Court also
noticed the purpose of fiscal statutes while
undertaking the exercise to determine the
classification
of
products
under
the
Customs
Tariff
Act,
1975
in
Commissioner of Central Excise, Nagpur
v. Shree Baidyanath Ayurved Bhavan
Limited, reported at (2009) 12 SCC 419 as
under:

"49. The primary object of the
Excise Act is to raise revenue for which
various products are differently classified
in the new Tariff Act. Resort should, in the
circumstances, be had to popular meaning
and
understanding
attached
to
such
products by those using the product and
not to be had to the scientific and technical
meaning of the terms and expressions
used. The approach of the consumer or
user towards the product, thus, assumes
significance. What is important to be seen
is how the consumer looks at a product
and what is his perception in respect of
such product. The user's understanding is a
strong
factor
in
determination
of
classification of the products."

20. The Courts have consistently
adopted the "common parlance test" as the
most reliable standard for interpreting
terms and entries in taxing statutes. This is
ofcourse subject to various exceptions
where the statutory text is completely
contrary
to
the
"common
parlance"
context. The common parlance test is also
considered an extension of the established
canons of statutory interpretation of taxing
statutes.

21. The common parlance test was
summarized and adopted by the Hon'ble
Supreme Court in Dunlop India Ltd. v.
Union of India and others, reported at
(1976) 2 SCC 241, wherein it was
observed as under:

"29. It is well established that in
interpreting the meaning of words in a
taxing statute, the acceptation of a
1 All. M/s Dabur India Ltd. Vs. Commissioner of CGST, Ghaziabad & Ors.
1333
particular word by the trade and its
popular meaning should commend itself to
the authority.

34. We are, however, unable to
accept the submission. It is clear that
meanings given to articles in a fiscal
statute must be as people in trade and
commerce, conversant with the subject,
generally treat and understand them in the
usual course. But once an article is
classified and put under a distinct entry,
the basis of the classification is not open to
question. Technical and scientific tests
offer guidance only within limits. Once the
articles are in circulation and come to be
described and known in common parlance,
we then see no difficulty for statutory
classification under a particular entry."

22.

The
issue
whether
the
commercial idiom used in the trade by the
dealer and the consumer alike provided a
definitive guide to understanding the
nature of the entry fell for consideration
before the Hon'ble Supreme Court in
Indian Aluminium Cables Ltd. v. Union
of India and others, reported at (1985) 3
SCC 284. The Hon'ble Supreme Court in
Indian Aluminium Cables Ltd. (supra)
ruled thus :-

"12....
This
Court
has
consistently taken the view that, in
determining the meaning or connotation of
words and expressions describing an
article in a tariff schedule, one principle
which is fairly well settled is that those
words
and
expressions
should
be
construed in the sense in which they are
understood in the trade, by the dealer and
the consumer. The reason is that it is they
who are concerned with it and, it is the
sense in which they understand it which
constitutes the definitive index of the
legislative intention."

23. The absurdity of adopting the
technical
meanings
over
"common
parlance" in fiscal statutes was highlighted
by the Hon'ble Supreme Court in Reliance
Cellulose Products Ltd. Hyderabad v.
Collector of Central Excise, Hyderabad-I
Division, Hyderabad reported at (1997) 6
SCC 464 by holding as under:

"20. In other words, if the word
used in a fiscal statute is understood in
common parlance or in the commercial
world in a particular sense, it must be
taken that the Excise Act has used that
word in the commonly understood sense.
That sense cannot be taken away by
attributing a technical meaning to the
word. But if the legislature itself has
adopted a technical term, then that
technical term has to be understood in the
technical sense. In other words, if in the
fiscal statute, the article in question falls
within the ambit of a technical term used
under a particular entry, then that article
cannot be taken away from that entry and
placed under the residuary entry on the
pretext that the article, even though it
comes within the ambit of the technical
term used in a particular entry, has
acquired some other meaning in market
parlance. For example, if a type of
explosive (RDX) is known in the market
as Kala Sabun by a section of the people
who
uses
these
explosives,
the
manufacturer
or
importer
of
these
explosives
cannot
claim
that
the
explosives must be classified as soap and
not as explosive."

24. Similarly, the Hon'ble Supreme
Court in Shree Baidyanath Ayurved
Bhavan Ltd. v. Collector of Central
Excise, Nagpur, reported at (1996) 9 SCC
402 applied the common parlance test to
classify the product "Dant Lal Manjan",
1334 INDIAN LAW REPORTS ALLAHABAD SERIES
which was in issue. The Hon'ble Supreme
Court held that "Dant Lal Manjan" did not
qualify as a medicament under the Central
Excise Act, by setting forth the following
reasons:

"3.... The Tribunal rightly points
out that in interpreting statutes like the
Excise Act the primary object of which is
to raise revenue and for which purpose
various products are differently classified,
resort should not be had to the scientific
and technical meaning of the terms and
expressions used but to their popular
meaning, that is to say the meaning
attached to them by those using the
product. It is for this reason that the
Tribunal came to the conclusion that
scientific and technical meanings would
not advance the case of the appellants if
the same runs counter to how the product
is understood in popular parlance."

25. The twin test of common
parlance and the ingredients contained in
the product were succinctly summed up by
the Hon'ble Supreme Court for the purpose
of classification of products enumerated in
tariff schedules in Naturalle Health
Products (P) Ltd. v. Collector of Central
Excise, Hyderabad, reported at (2004) 9
SCC 136, by holding as follows:

"42. We are also of the opinion
that when there is no definition of any kind
in the relevant taxing statute, the articles
enumerated in the tariff schedules must be
construed as far as possible in their
ordinary or popular sense, that is, how the
common man and persons dealing with it
understand it. If the customers and the
practitioners of Ayurvedic medicine, the
dealers and the licensing officials treat the
products
in
question
as
Ayurvedic
medicines
and
not
as
Allopathic
medicines, that fact gives an indication
that they are exclusively Ayurvedic
medicines or that they are used in
Ayurvedic system of medicine, though it is
a patented medicine. This is especially so
when
all
the
ingredients
used
are
mentioned in the authoritative books on
Ayurveda. As rightly contended by the
counsel for the appellants, the essential
character of the medicine and the primary
function of the medicine is derived from
the active ingredients contained therein
and it has certainly a bearing on the
determination of classification under the
Central Excise Act. As held inAmrutanjan
case[Amrutanjan Ltd.v.CCE, (1996) 9
SCC 413 : (1995) 77 ELT 500] , the mere
fact that the ingredients are purified or
added with some preservatives does not
really alter their character."

26. The twin test method evolved by
the Hon'ble Supreme Court was applied to
determine the classification of a product as
a cosmetic or medicament in Puma
Ayurvedic
Herbal
(P)
Ltd.
v.
Commissioner, Central Excise, Nagpur,
reported at (2006) 3 SCC 266. The two
classification determining tests created by
the Hon'ble Supreme Court in Puma
Ayurvedic Herbal (supra) are as under:

"2. ... In order to determine
whether a product is a cosmetic or a
medicament a twin test has found favour
with the courts. The test has approval of
this Court also videCCE v.Richardson
Hindustan Ltd.[(2004) 9 SCC 156] There
is no dispute about this as even the
Revenue
accepts
that
the
test
is
determinative for the issue involved. The
tests are:

I. Whether the item is commonly
understood as a medicament which is
called the common parlance test. For this
1 All. M/s Dabur India Ltd. Vs. Commissioner of CGST, Ghaziabad & Ors.
1335
test it will have to be seen whether in
common parlance the item is accepted as a
medicament. If a product falls in the
category of medicament it will not be an
item of common use. A user will use it
only for treating a particular ailment and
will stop its use after the ailment is cured.
The approach of the consumer towards the
product is very material. One may buy any
of the ordinary soaps available in the
market. But if one has a skin problem, he
may have to buy a medicated soap. Such a
soap will not be an ordinary cosmetic. It
will be medicament falling in Chapter 30
of the Tariff Act.

II. Are the ingredients used in
the product mentioned in the authoritative
textbooks on Ayurveda?"

27. The Hon'ble Supreme Court in
Commissioner of Central Excise, New
Delhi v. Cannaught Plaza Restaurant
Private Limited, New Delhi reported at
(2012) 13 SCC 639, declined to import
conditions or restrictions contemplated in
statutes
with
different
objects
and
purposes to fiscal statutes by finding as
under:

"46. We are unable to persuade
ourselves to agree with the submission. It
is
a
settled
principle
in
excise
classification that the definition of one
statute having a different object, purpose
and
scheme
cannot
be
applied
mechanically
to
another
statute.
As
aforesaid, the object of the Excise Act is to
raise revenue for which various goods are
differently classified in the Act. The
conditions or restrictions contemplated by
one statute having a different object and
purpose should not be lightly and
mechanically imported and applied to a
fiscal statute for non-levy of excise duty,
thereby causing a loss of revenue. [See
Medley Pharmaceuticals Ltd. v. CCE and
Customs (SCC p. 614, para 31) and CCE
v. Shree Baidyanath Ayurved Bhavan
Ltd.] The provisions of PFA, dedicated to
food
adulteration,
would
require
a
technical and scientific understanding of
"ice-cream". These provisions are for
ensuring quality control and have nothing
to do with the class of goods which are
subject to excise duty under a particular
tariff entry under the Tariff Act. These
provisions
are
not
a
standard
for
interpreting goods mentioned in the Tariff
Act, the purpose and subject of which is
completely different."

28. The definitions of terms in
statutes
having
different
objectives,
purposes and schemes cannot be applied
mechanically
to
fiscal
statutes.
The
Hon'ble Supreme Court in Commissioner
of Central Excise, Nagpur v. Shree
Baidyanath Ayurved Bhavan Limited,
reported at (2009) 12 SCC 419 held thus:

"55. True it is that Section 3(a)
of the Drugs and Cosmetics Act, 1940
defines "Ayurvedic, siddha or unani drug"
but that definition is not necessary to be
imported in the new Tariff Act. The
definition of one statute having different
object, purpose and scheme cannot be
applied mechanically to another statute. As
stated above, the object of the Excise Act
is to raise revenue for which various
products are differently classified in the
new Tariff Act."

29. The stage is set to return to the
facts of the case.

30. The materials in the records
before the authorities below corroborate
the fact that the petitioners pitched the
product
in
their
sale
material
and
1336 INDIAN LAW REPORTS ALLAHABAD SERIES
advertisements as a mosquito repellent.
Various mosquito repelling qualities are
identified as defining characteristics of the
subject goods in the market.

31. The product is not normally
prescribed as a medicine by medical
practitioner as a drug. There is no
restriction on sales. The product is sold on
demand at the counters in shops and
establishments. Sales are not restricted to
chemists/druggists alone.

32. The product is a mosquito
repellent by virtue of its mosquito
repelling
characteristics
and
is
so
understood in common parlance. The
dealers identify and sell the product as a
mosquito repellent. Customers purchase
the same and use it in the like manner.

33. These facts were conclusively
established before the authorities below. In
the wake of the said findings the common
parlance test or the market identity test for
classification of the product was satisfied.
The conclusion that the product is a
mosquito repellent is a logical sequitor of
the above process of reasoning.

34. The said findings of the
authorities below are consistent with the
law laid down by the Hon'ble Supreme
Court
in
successive
judicial
pronouncements discussed earlier.

35. The Appellate Authority while
finding for the Revenue has observed that
the active ingredient of the product is
NNDB which is the improved version -
formula of DEET. The essential quality of
DEET is mosquito repelling. The NNDB
was introduced to overcome the itchiness
caused
by
the
DEET.
The
basic
component of the product is DEET while
the quality enhancements are created by
the NNDB.

36. Mosquito repellent quality of
DEET
is
the
dominant
chemical
characteristic of the product, the hallmark
of its identity, and also the defining usage
feature of the product.

37. There is no scientific or expert
evidence in the record to support the
pleading or the case of the assessee /
respondent that the NNDB imparts its
essential character to the product.

38. No material / supporting
scientific evidence from the record was
shown to this court to establish that the
creation of NNDB denudes the essential
mosquito repellent quality of DEET in the
product. The material in the record
supports the conclusion by the authority
below
that
the
mosquito
repellent
characteristic of DEET is retained in the
final product and forms its essence. The
Appellate Authority also opined that
DEET is a pesticide.

39. The plea of the assessee is a bald
defence raised after the revenue had
discharged
its
burden
regarding
the
composition and nature of the product.

40. The holding of the Appellate
Authority that the active component of the
product is DEET and that NNDB is its
improved
version
cannot
be
called
perverse. The chemical composition test
created by the Hon'ble Supreme Court, has
been correctly applied by the Appellate
Authority to construe the product as a
mosquito repellent. For like reasons,
contention of the respondent / assessee
cannot be viewed with favour by this
Court.
1 All. M/s Dabur India Ltd. Vs. Commissioner of CGST, Ghaziabad & Ors.
1337

41. The interpretation of various
entries
and
headings
relating
to
classification of goods is guided both by
the rules framed in that regard and judicial
authority in point.

42. The entry being adopted by the
revenue and under which the product has
been classified by the authorities below is
extracted hereunder:

"3.45 The relevant entries under
Heading 3808 of the Customs Tariff Act
are as under:

Tariff
Item

Description of goods
3808
Insecticides,
rodenticides,
fungicides,
herbicides,
antisprouting products and plantgrowth regulators, disinfectants
and similar products
3808 91
91
- - - Repellents for insects such
as flies and
- mosquitoes

43. The tariff/heading being favoured
by the respondent - assessee is reproduced
hereunder:

3004
Medicaments (excluding
goods of heading 3002,
3005 or 3006) consisting
of mixed or unmixed
products for therapeutic
or prophylactic uses, put
up in measured doses
(including those in the
form
of
transdermal
adminstration systems) or
in forms or packings for
retail sale
3004 90 99
--- Other

44.

The
General
Rules
For
Interpretation of Import Tariff which
guided
the
Appellate
Authority
in
determination of the classification of the
goods, will also aid this discussion. The
relevant rules are set out hereunder for
ease of reference :-

"3. When by application of rule 2(b)
or for any other reason, goods are, prima facie,
classifiable under two or more headings,
classification shall be effected as follows:

(a) The heading which provides
the most specific description shall be
preferred to headings providing a more
general description. However, when two
or more headings each refer to part only of
the materials or substances contained in
mixed or composite goods or to part only
of the items in a set put up for retail sale,
those headings are to be regarded as
equally specific in relation to those goods,
even if one of them gives a more complete
or precise description of the goods.

(b) Mixtures, composite goods
consisting of different materials or made up of
different components, and goods put up in sets
for retail sale, which cannot be classified by
reference to (a), shall be classified as if they
consisted of the material or component which
gives them their essential character, insofar as
this criterion is applicable.

(c) When goods cannot be
classified by reference to (a) or (b), they
shall be classified under the heading which
occurs last in numerical order among those
which equally merit consideration."

45. Under rule 3 of the general
interpretation rules, resort cannot be had to
a general entry called "others" or any other
heading when the product clearly falls
under a specific classification heading.

46. In Commissioner of Central
Excise, Nagpur v. Shree Baidyanath
1338 INDIAN LAW REPORTS ALLAHABAD SERIES
Ayurved Bhavan Limited, reported at
(2009) 12 SCC 419, the Hon'ble Supreme
Court while interpreting the Rule 3 (a) of
the aforesaid Rules held as under:

"56. There is no doubt that a
specific entry must prevail over a general
entry. This is reflected from Rule 3(a) of the
general Rules of interpretation that states that
Heading which provides the most specific
description shall be preferred to Headings
providing a more general description."

47. A perusal of the classification
heading no. 38089191 shows that the product
in question is a neat fit into the description of
products laid down therein. No laboured
process of reasoning is required since the
heading no.38089191, is clear as daylight.

48. The conclusion of the Appellate
Authority in this regard are consistent with
the Rules of interpretation and judicial
authority in point.

49. The invocation of the general
entry called "others" by the petitioner is
clearly misconceived, since the product in
question
is
covered
by
a
specific
description in the heading under which the
product has been classified.

50. This Court is not persuaded to
take a different view in the light of the
preceding discussion.

51. The preceding discussion establishes
that all attributes of mosquito repellents
relevant for a judicial enquiry of this nature are
found in the product in question.

52. The reliance placed by the
petitioner / asseessee on the judgment of
this Court rendered in the case of M/s
Balsara
Hygiene
Products
Limited
reported at 1986 UPTC 367 (All.) is
misplaced. The entry which was under
consideration before this Court in M/s
Balsara
Hygiene
Products
Limited
(supra) issued under Section 3 of the Uttar
Pradesh Sales Tax, 1948 and read as
"Medicines
and
pharmaceutical
preparations including insecticides and
pesticides". The said entry included
insecticides and pesticides within the
broader
category
of
medicines
and
pharmaceutical preparations. This is in
complete contradistinction to the entry
under the tariff heading no.3808 which is
in issue in this writ petition. The rival
classifications of medicament vs mosquito
repellent were not examined by this Court
in the case of M/s Balsara Hygiene
Products Limited (supra) while the same
are directly in issue in the instant writ
petition.

53. Before proceeding to the last part
of the discussion, the scope and limitation
of judicial review, which guide the
exercise of discretionary jurisdiction under
Article 226 of the Constitution of India
may be stated. Judicial review is confined
to the decision making process and is not
directed against the decision itself. The
court of judicial review examines the
manner in which the decision was made.
In judicial review the Court scrutinizes the
correctness of the decision making process
and not the decision itself. The concern of
the Court exercising powers of judicial
review is procedural propriety in the
decision making process. While exercising
powers of judicial review the Court has to
find whether the decision making authority
acted within its jurisdictional limits,
committed errors of law, adhered to the
principles of natural justice or acted in
breach thereof, and whether the decision is
1 All. M/s Dabur India Ltd. Vs. Commissioner of CGST, Ghaziabad & Ors.
1339
perverse or not. The powers of judicial
review are thus distinct from powers of an
appellate court. The order of Appellate
Authority can be judicially reviewed and
not appealed against.

54. The courts exercising judicial
review do not ordinarily substitute the
decision
of
the
authority
by
their
judgment. Merely because two views are
possible, a court sitting in judicial review
shall not exercise its discretion in favour
of an alternative view to that of the
authority.

55. From the records pleadings and the
arguments of the learned counsel for both
the parties, this Court finds that the
petitioners were given full opportunity of
hearing before the authorities below. The
Appellate Authority as well as Original
Authority have adhered to the principles of
natural
justice
while
deciding
the
controversy.