Case Law Details
Dabur India Ltd. Vs Commissioner Of CGST (Allahabad High Court)
The materials in the records before the authorities below corroborate the fact that the petitioners pitched the product in their sale material and advertisements as a mosquito repellent. Various mosquito repelling qualities are identified as defining characteristics of the subject goods in the market.
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.
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.
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.
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.
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.
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.
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.
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.
High Court held that odomos is not a medicine, it is a mosquito repellant hence 18% Goods and Services Tax (GST) applicable.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
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.
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