Case Law Details
Reddys Laboratories Ltd Vs Commissioner of Commercial Taxes (Kerala High Court)
Kerala High Court held that clarification order accepts classification of Clohex and Clohex Plus as medicament, based on the fact that they were manufactured under a drug licence. However, there is no reason discernible from clarification order as to why Senquel-AD Mouthwash which is presented in a similar form cannot also be classified as a medicament. Accordingly, matter remanded for fresh consideration.
Facts- The appellant is engaged in manufacturing and trading pharmaceutical products, Clohex, Clohex Plus and Senquel-AD, which are being used as medicaments, with Mouthwash having prophylactic and therapeutic effects.
The appellant contends that under the Central Excise Tariff Act, all the above products have been assigned HSN Code 3003.3900, treating them as medicaments. The appellant was accordingly submitting returns under the KVAT Act, treating them as medicaments and paying tax at 4% and later 5%. Earlier, under the Kerala General Sales Tax Act also, they were treated as medicaments, and taxes were paid accordingly.
The third respondent assessing authority issued notices u/s. 67(1) of the KVAT Act demanding penalty for the assessment years 2008-2009 to 2012-2013, alleging that these products would actually come under Serial No. 92(6) of SRO 82/2006 under ‘Mouthwash’ and they should be assigned HSN Code 3306.10.90, and the dealer had wrongly included them under the group ‘medicaments.’
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