STATE OF MADHYA PRADESHversusMARICO INDUSTRIES LTD.

                         [2016] 7 S.C.R. 899


                 STATE OF MADHYA PRADESH                                  A
                                  v.
                   MARICO INDUSTRIES LTD.
                   (Civil Appeal No. 8656 of2015)
                           JULY22,2016                                    B
       [DIPAK MISRA AND PRAFULLA C. PANT, JJ.)
      Madhya Pradesh Entry Tax Act, 1976:
       Schedule lll, Entry 32 - Levy of tax on the product 'Mediker ' -
Treating it as a 'shampoo' - Held: 'Mediker' which is used for anti-      C
lice treatment is a drug because of its medicinal affect - Thus being
a drug and not a shampoo is not exigible to entry tax.
       Schedule IJ, Entry 55 - Levy of tax on the product 'Revive
Instant Starch' - Treating it as a chemical - Held: The Revenue
failed to establish the product as a chemical - In common parlance        D
also the product is not treated as a chemical - Tints, not being a
che•nical within meaning of Entry 55 and hence not exigible to enfly
tax.
       Evidence - Burden of proof~ Held: The burden lies 011 the
taxing authorities to prove that a particular case or item is taxable     E
in the manner claimed by them.
      Dismissing the appeal, the Court
      HELD: 1. Mediker which is used for anti-lice treatment is
a drug because of its medicinal affect. Once it is a drug, it cannot
be a shampoo. As a natural corollary, it will not invite the liability    F
of levy of entry tax. [Para 16) [910-F)        ·
       2. The burden of proof is on the taxing authorities to show
that the particular case or item in question is taxable in the manner
claimed by them. Elucidating fnrther, the Court has held that
there should be material to enter appropriate finding in that regard      G
and the material may be either oral or documents and it is for the
taxing authority to Jay evidence in that behalf even before the
first adjudicating authority. [Para 18] (911-B-C]
     2.2 Revive instant starch is used while washing the clothes.
In common parlance it is not regarded and treated as a chemical           H
                               899
900           SUPREME COURT REPORTS                        [2016] 7 S.C.R.



A     or a bleaching powder. If the very substance or product would
      have a chemical composition, then only it would make the said
      substance a chemical within the meaning of Entry 55. The purpose
      and use are to be taken note of. Common parlance test has to be
      applied. If the revenue desired to establish it as a chemical, it
      was obligatory on its part to adduce the evidence. As is manifest,
B
      no evidence has been brought on record by the revenue that it is
      a chemical. Therefore, it is not a chemical. [Para 18] [911-C-D]
            Deputy Co111111issioner v. G.S. Pai (1980) 1 SCC
            142:1980 (1) SCR 938 - distinguished
            Collector of Central Excise v. Pharmasia (P) Ltd.1990
c           (47) E.L.T. 658 (Tribunal) - approved.
            Collector 0;[ Central Excise, Hyderabad v. Mis !'harmsia
            Pvt. Ltd 1996 (83) ELT Al 78 (SC); Sujanil Chemo
            Industries v. Commissioner of C. Ex. & Cus., l'une 2005
            (181) ELT 206 (SC); Commissioner of Central Excise
D           v. Wock!wrdt Life Sciences Limited (2012) 5 SCC 585;
            Union of India v. GariPare Nylons Ltd. (1996) 10 SCC
            413:1996 (5) Suppl. SCR 629 - relied on.
            United Offset Process Pvt. Ltd. v. Asst. Collector of
            Customs, Bombay & Ors (1989) Supr1. 1 SCC 131:1988
E           (3) Suppl. SCR 531; Sunny Industries Pvt. ltd. "
            Collector of Central Excise, Calculla (2003) 4 SCC
            280:2003 (3) SCR 18; Commissioner of Cemral Excise,
            Nagpur v. Shree Baidyanath Ayurved Bhavan Li111ited
            (2009) 12 SCC 419:2009 (5) SCR 879; Shree
            Baidyanarh Ayurved Bhavan ltd. l( CCE (1996) 9 SCC
F           402 - referred to.
                            Case Law Reference
        198.0. (1) SCR 938                   referred to     Para3
        1988 (3) Sup11l. SCR 531             referred to     Para3
G       2003 (3) SCR 18                      referred to     Para3
        2009. (5) SCR 879                    referred to     Para9
        (19_96) 9 sec 402                    referred to     Para 9
        1990 (47) E.L.T. 658 (Tribunal)      approved        Para IO
        1996 (83) ELT Al 78 (SC)             relied on       Para 12
H
      STATE OF MADHYA PRADESH & ORS. v. MARICO                                901
                   INDUSTRIES LTD.

  2005 (181) ELT 206 (SC)                 relied on         Para 12            A
  (2012) 5 sec 585                         relied on        Para 15
  1996 (5) Suppl. SCR 629                  relied on        Para 18
     CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8656
of2015.
                                                                               B
     F1\1m the Judgment and Order dated 19.08.2013 of the High Cout1
of Madhya Pradesh Bench at Indore in Writ Petition No. 1198 of2004.
      C. D. Singh, Ms. Sakshi Kakkar, Advs. for the Appellants.
     S. K. Bagaria, Sr. Adv. Mahesh Agarwal, Abhinav Agrawal, Ms.
Devika Mohan, (For E. C. Agrawala), Advs. for the Respondent.                  C
      The Judgment of the Court was delivered by
       DIPAK MISRA, J. 1. In this appeal, by special leave, the State
of Madhya Pradesh and its functionaries have called in question the
legal acceptability of the judgment and order dated 19.08.2013 passed
by the Division Bench of High Court of Madhya Pradesh, Indore Bench            D
in W.P. No. 1198 of 2004 whereby the order dated 05.01.2004 passed
by iheAdditional Commissioner, Commercial Tax in Review case No.80/
03/lnd/Entry Tax imposing entry tax on the products, namely, Mediker
and Starch (Revive) after declining to entertain the stance of the assessee
that "Mediker" being a drug Starch (Revive) being not a chemical, arc          E
not liable to levy of entry tax under the Madhya Pradesi1 Entry Tax Act,
1976, (for sho11 "the E.T. Act"), has been dislodged and both the products
have been held not to be within the ambit of entry tax.
       2. The facts giving rise to the present appeal are the respondent is
a manufacturer of hair oil, edible oil, Mediker and Starch (Revive) and        F
other products and is a registered dealer under the Madhya Pradesh
Commercial Tax Act, 1994, as well as a dealer under the E.T. Act. The
Assistant Commissioner, Commissioner Tax Division II, Indore vide order
dated 28.04.2003 imposed entry tax on Mediker treating it as a hair
shampoo and "Revive Instant Starch" as a chemical; and as the tax was
not paid, interest and penalty were also levied. Being grieved by tl1e         G
aforesaid order the respondent-company preferred Review case No.
80/2003 before the Additional Commissioner, Commercial Tax, Indore
It was contended before the said authority that the entry tax imposed on
the assessee on Mediker, which is meant for anti-I ice treatment, was
illegal being not permissible under any of the entries mentioned in
902             SUPREME COURT REPORTS                            [2016] 7 S.C.R.


A     Schedule II of the E.T. Act and there was no material on record to treat
      starch as a chemical. It was also urged that Mediker is a medicine and
      hence, it did not attract entry tax. The said submissions were repelled
      and tax was imposed and on that basis penalty and interest were also
      levied. Aggrieved by the order passed by the Additional Commissioner,
      Commercial Tax, Indore, the assessee approached the High Court in
B
      Writ Petition No. 1198 of2004 and the Division Bench referring to the
      charging Section and the Entries, came to hold that Mediker is basically
      a medicinal product and starch being not meant for sale but used in
      production of other articles, could not have been made amenable to entry
      tax, more so, in the absence of its mention in the Schedule. It was also
c     held that starch is not a chemical.
              3. Criticising the order passed by the High Court, Mr. C.D. Singh,
      learned counsel appearing for the State would contend that Mediker, in
      common parlance, is considered as shampoo and not as a medicine
      because it is nowhere mentioned in the label of the product that after
D     removal of the lice, it cannot he used again or cannot he used as other
      shampoos for hair wash. Relying on the decision in Deputy
      Commissioner v. GS. Pai learned counsel for the State would contend
                                   1




      that while interpreting entries in sales tax legislation, it is to be borne in
      mind that the words used in the entries must not be construed in any
      technical sense nor from a scientific point of view. They should be
 E    understood in their popular sense and in the sense which the people
      conversant with the subject matter with which the statute is dealing,
      would attribute to it. For the said purpose, learned counsel has also
      drawn inspiration from United Offset Process Pvt. Lt£l v. Asst. Collector
      of Cmtoms, Bombay & Ors1• Submission of Mr. Singh is that just
 F    because the product contains D-Phenothrin EP and is used for treating
      lice, it cannot be termed as medicament in view of the principles stated
      in Su1111y I11dustries Pvt. Ltd. v. Collector of Celllral Excise, Calcutta·'.
      According to the learned counsel for the State, Mediker is a kind of
      shampoo and hence, it is covered under Schedule II of the E.T. Act
      which incorporates the heac fls "shampoo of all variant and forms". As
 G    far as the Revive starch is concerned, it is urged by Mr. Singh that it is a
      chemical covered by Entry 55 of Schedule II and consequently it is
      chargeable to entry tax.
       1
        (1980J 1sec142
      '(1989) Supp. 1sec131
 H    ' (2003 J 4 sec 280
       STATE OF MADHYA PRADESH & ORS. v. MARICO                                   903
             INDUSTRIES LTD. [DIPAK MISRA, J.]

          4. Mr. Bagaria, learned senior counsel appearing for the assessee,      A
  in his turn, would argue that Mediker is a product meant for curing hair
  lice infection in hairs and the product is marketed as "Mediker anti-lice
  treatment". It is urged by him that Mediker anti-lice treatment is
  manufactured after obtaining the drug licence under the Drugs and
  Cosmetics Act, 1940 (for sho1t, "the 1940 Act") wherein it has been
                                                                                  B
  classified as a drug falling under Section 3(b) of the 1940 Act. It is
  contended by him that that "Mediker anti-lice treatment" satisfies the
  definition of the drug and after due scrutiny, the drug control authorities
  have granted licence for the said product as a drug. Mr. Bagaria wou Id
  submit that period of treatment is four weeks and shampooing is only a
  method to apply the medicine. In essence, the submission of learned             c
  senior counsel is that the medium cannot determine the nature of the
  product. Be has commended us to certain authorities of this Court as
  well as CESTAT which have been approved by this Court to bolster his
  stand, and we shall refer to them at the appropriate stage. It is canvassed
  by him that it is the admitted position that drugs are not covered under
                                                                                  D
  the E.T. Act and do not find any mention either in the Schedule I or
. Schedule II and are not liable to levy of entry tax. Incrementing the
  submission learned senior counsel would contend that the revenue has
  charged entry tax under Entry 32 of Schedule II which really relates to
  different cosmetics, depilatories, etc. and hair shampoo is one of such
  items, but "Mediker anti-lice treatment" is not a hair shampoo but is a          E
  medicine/drug. As far as the Revive instant starch is concerned, learned
  senior counsel has propounded that starch is manufactured by using the
  Tapioca roots and even on the packets, it is clearly mentioned Revive
  instant starch and, therefore, by no stretch of imagination it can be treated
  as a chemical to be covered under Schedule 11 of the Act. He has also
                                                                                   F
  addressed us with regard to the burden of proof which rests on the
  revenue when it intends to classify a product differently than that as
  claimed by the assessee and according to him, it has not been discharged
  in the case at hand.
          5. Section 3 of the E.T. Act deals with incidence of taxation.
  Section 3(1 )(a) reads as follows:-                                              G
          "There shall be levied an entry tax:
          (a) on the entry in the course of business of a dealer of goods
          specified in Schedule JI, into each local area for consumption, use
          or sale therein; and
        (b)               ,,
                                                                                   H
904             SUPREME COURT REPORTS                           (2016) 7 S.C.R.



A          6. In the case at hand, we are concerned with certain entries in
      Schedule II. Entry 32 which has been sought to be used to justify the
      imposition of entry tax on Mediker, reads as follows:-
            "Scents, perfumes, hair tonics, hair cream, hair shampoo,
            depilatories and cosmetics including face creams, snows, lipstics,
B           rougue and nail polish"
              7. As noted earlier, submission of Mr. Singh, learned counsel for
      the revenue is that the Mediker is nothing but a hair shampoo and,
      therefore, it squarely falls under Entry 32. Learned counsel appearing
      for the assessee has controverted the same on many an aspect. The
c     High Court, as the impugned order would show, has returned certain
      findings which are to the effect that Mediker contains active Permethrin
      which is used to paralyse the insect lice, thereby killing it; that Mediker
      is basically a medicinal product, since the skin (cuticulam) of the louse is
      similar to the structure of human nail it has first to be made porous so
      that the active ingredient can penetrate and enter the louse and paralyse
D     it; that for the purpose of treatment a wetting agent is needed and this
      wetting agent is the surface active agent used in Mediker; that the surface
      agent is nothing but a medium to convey the active ingredient on to the
      louse; and that the period of treatment is four weeks and the product is
      not used generally for washing the hair.
E            8. We shall presently consider the authorities cited at the Bar to
      appreciate the actual background. In G.S. Pui (supra), the Court was
      considering what meaning is to be placed on "Bullion and Specie" in the
      light of the provisions of the Kerala General Sales Tax Act, I 963. In that
      context, the Court observed that:-
F            " ... Now there is one cardinal rule of interpretation which has
             always to be borne in mind while interpreting entries in sales tax
             legislation and it is that the words used in the entries must be
             construed not in any technical sense nor from the scientific point
             of view but as understood in common parlance. We must give the
             words used by the legislature their popular-sense meaning "that
G
             sense which people conversant with the subject-matter with which
             the statute is dealing would attribute to it". The word "bullion"
             must, therefore, be interpreted according to ordinary parlance and
             must be given a meaning which people conversant with this
             commodity would ascribe to it. Now it is obvious that "bullion" in
 H           its popular sense cannot include ornaments or other a11icles of
      STATE OF MADHYA PRADESH & ORS. v. MARICO                                   905
            INDUSTRIES LTD. [DIPAK MISRA, J.]

       gold. "Bullion" according to its plain ordinary meaning means gold        A
       or silver in the mass. It connotes gold or silver regarded as raw
       material and it may be either in the form of raw gold or silver or
       ingots or bars of gold or silver.... "
        Lear•1ed counsel for the State has heavily relied on the said passage.
It is well settled in law that ratio ofajudgment is to be appreciated in the     B
factual backdrop of the case. In the said case, as we find, the factual
background was absolutely different and, therefore, we have no hesitation
in holding that the said authority remotely does not assist the revenue for
buttressing the contention that Mediker is a shampoo.
       9. In Commissioner of Ce11tr(l/ E."\cise, N"gpur v. Shree                 c
Baidymwtll Ayurved Bllavm1 Limitec/1 [Sltree B"i<lymwt/1 Ayurve<I
Bllava11 Limite<MIJ the issue pertained to classification of"Dant Manjan
Lal" (DML) manufactured by Mis Baidyanath Ayurved Bhavan Limited.
The Court took note of the earlier decision in S/tree Baidy<mat/1 Ayurvetf
Blwvun Lill v. CCE-' [Sltree B"itfymwtlt Ayurved Blwvcm Lttf.-1]
wherein it had been held that DML was not known as an ayurvedic                   D
medicine and the finding of the tribunal that DML was toilet requisite
was upheld. During the pendency of the appeals before this Court, the
Central Excise Tariff Act, 1985 was enacted which replaced the Schedule
to the Central Excise and Salt Act, 1944. The 1985 Act, as the Court
noticed, dealt with pharmaceutical products and there was a Sub-Heading           E
3003.30 which provided for no excise duty leviable on medicaments,
including those used in ayurvedic. unani, siddha, homeopathic or bio-
chemic system. The Court also noticed that in 1987 the First Schedule
to the 1940 Act was amended and the book Ayurveda Sara Samgraha
was included therein. On 25.09.1991, the Central Board of Excise and
Customs issued a circular in respect of DML and advised its classification        F
as an ayurvedic medicine. But the said circular was withdrawn after the
decision in Sltree Baiclycm"tlt Ayurved Blwvmt Lttf.-1 (supra). The
assessee approached the Board regard being had to the amendment to
decide the classification of the product. Thereafter the dispute arose
with regard to the classification. Mr. Singh has drawn our attention to           G
paragraph 46 of the decision in Shree Baitfymwth Ayurved Blutvtm
Limited-II (supra) to emphasise on the common parlance test. We
think it appropriate to reproduce the entire paragraph:-
'(2009) 12 sec 419
'(1996) 9 sec 402
                                                                                  H
906             SUPREME COURT REPORTS                           [2016) 7 S.C.R.



A            "As a matter of fact, this Court has consistently applied common
             parlance test as one of the well-recognised tests to find out whether
             the product falls under Chapter 30 or Chapter 33. In a recent
             decision in Puma Ayurvedic Herbal (P) Ltd. v. CCE6 this Court
             observed that in order to determine whether a product is a cosmetic
             or medicament, a twin test (common parlance test being one of
B            them) has found favour with the courts. This is what this Court
             observed: (SCC pp. 269-70, para 2)
             "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 vide CCE v. Richardson
c            Hindustan Ltd. - 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 test it will have
D            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
 E           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?"
 F           The two-Judge Bench agreed with the view taken in Pum"
      Ayurvedic Herbal (P) Ltd. (supra) and applied the common parlance
      test and accepted the submissions of the revenue.
      I 0. There can be no dispute over the proposition of law laid down in
      the aforesaid authority. The thrust of the matter is how the courts have
 G    treated a particular product for the purpose of classification under the
      excise law and what status is to be given. The issue of anti-lice treatment
      arose in Collector of Ce11tml Excise v. l'lwrm"sia (1') Ltd.•. The
      '(2006J 3 sec 266
      1
        (2004 l 9 sec 156
 H    ' 1990 (47) E.L.T. 658 (Tribunal)
     STATE OF MADHYA PRADESH & ORS. v. MARJCO                            907
           INDUSTRIES LTD. [DIPAK MISRA, J.]

tribunal reproduced the label appearing on every bottle ofMediker. The   A
label is reproduced below:-
                                 "Mediker
                          ANTI-LICE TREATMENT
                           DIRECTION FOR USE                             B
             Shampoo hair with one capful ofMediker, Massage scalp
      for 3 minutes Rinse, Repeat. This usually eliminates Lice. For
      best results repeat shampooing 2 days later.
      WARNING
            The product is toxic if swallowed. Store far from food and
                                                                          c
      drinking water. Keep away from children and pets. !fit gets into
      the eyes wash affected area immediately with clean water
                             COMPOSITION
      D-Phenothrin EP 0.23% W/V                                           D
      Triclosan E.P. 0.05% W/V base q.s.
      MEDIKER is the registered trade mark of Richardson - Vicks
      Inc.
      Manufactured by                                                     E
      PROCTER & GAMBLE INDIA LIMITED BOMBAY 400011
      Licenced Users of the trademark
      Contents 45ml Mfg. Lie No. 526/A/AP
      Retail price not to exceed Rs. 9.60                                 F
      (Local Tax extra)
      FOR EXTERNAL USE ONLY
      MADE IN INDIA
      Expiry date 2 years from the date of Mfg. Batch No. 8969 Date       G
      ofMfg. 12/88."
       11. The tribunal, as the judgment would show, analysed many an
aspect and opined that:-
      " 17. Considering the arguments advanced before us, we are
                                                                          H
908            SUPREME COURT REPORTS                            [2016] 7 S.C.R.


A           convinced that a person infested with lice does not get relief by
            merely washing his or her hair with water or various types of
            shampoo which are available in the market. The life and habits of
            the louse seem to call for more drastic steps in orders to get rid of
            the lice. On the label it is claimed that if the hair is shampooed
            with Mediker and left for 3 minutes and the process is repeated,
B
            lice are eliminated. The label also shows that Madiker consists of
            D-Phenothrin and other ingredients. The penetrating power ofD-
            Phenothrin whereby it paralyses the lice was established before
            us during the course of hearing. The label itself immediately after
            the name of the product (Mediker) mentions "anti-lice treatment".
c           These show that "Mediker" is a special product made for the
            treatment of lice. The submissions made by the learned Advocate
            that the anti-lice treatment is not subsidiary to the cosmetic function
            but is in the main function is borne out by the details given in the
            label and the explanations placed before us."
D           12. The tribunal posed a question: Can Mediker cure and prevent
      a disease? On the basis of material on record, the tribunal came to hold
      thus;-
            "20 .... Our perusal of these documents shows that the infestation
            of lice on the head causes several diseases and a product which
E           is to treat such diseases has to be considered to be a medicament.
            Merck Index of Chemicals and Drugs, Biological, Tenth Edition
            describes D-phenothrin, its vari'°'us isomers and its use as
            insecticides. Extra pharmacopea (Martindale) also mentions
            phenothrin as being used in drugs as insecticides. In this connection
            we find that the certificate from the Drug Control Administration,
F.          Government of Andhra J>radesh dated 22-6-1987 is relevant. The
            following extract suppo11s the case of the respondents:
            "As D-phenothrin is used on human body for topical use and has
            medicinal properties on scalp for antilice treatment as per the
            Notification from Drugs Controller, India bearing No. 15-95/80-
G           DC, dated 2-1-1982 D-phenothrin is to be considered as a drug
            under the Drug and Cosmetic Act, 1940."
            21. A disease may affect the outside or inside of a person's body.
            Causes for diseases may vary; these can be micro-macro
            organism, insects, wom1s, bacteria, etc. Any preparation containing
H
         STATE OF MADHYA PRADESH & ORS. v. MARICO                                909
               INDUSTRIES LTD. [DIPAK MISRA, J.]

         active ingredients to remove the root causes, whether they are          A
         used for internal consumption or external application has to be
         considered as a medicament. Therefore, we conclude that Mediker
         is a medicament. We further observe that the medicinal use of
         the product is not its subsidiary function but is the only function."
      Be it noted, the order passed by the tribunal was assailed in Civil         B
Appeal No. 3220of1990 and this Court had dismissed the Civil Appeal
in Collector of Ce11tral Excise, Hyderabad v. Mis Pltarmsia Pvt.
Ltd. 9
      13. In Suja11il Cltemo Imlustries v. Co111111issio11er of C. Ex. &
Cus., Pu11ew a three-Judge Bench of this Court approved the decision              c
of the tribunal by holding thus:-
         "6. In this case it has fairly not been denied that the only use of
         the product is for killing lice in human hair. We are unable to
         accept the submission that killing lice does not amount to a
         therapeutic or prophylactic use. Any medicine or substance which        D
         treats disease or is a palliative or curative is therapeutic. Lice]
         cures the infection or infestation oflice in human hair. It is thus
         therapeutic. It is also prophylactic inasmuch as it prevents disease
         which will follow from infestation of lice. Thus, this is a product
         which is used for therapeutic and prophylactic purposes. It would
         thus be a Medicament within the meaning of the term                      E
         "Medicament" in Note 2 of Chapter 30. It therefore gets excluded
         from Chapter 38.
         7. This view has also been taken by us in the case of /CPA Health
         Products (P) Ltd. v. Co111111issioner of C. Ex., Vadodara reported
         in 2004 (I 67) ELT 20. We are also in agreement with the opinion         F
         expressed by the Tribunal in Pharmasia s case (supra) wherein
         in respect of an identical product it has been set out that such
         product would fall under Chapter 30 under Tariff Heading 30.03."
      14. In Puma Ayurvedic Herbal (P) Ltd. (supra) the distinction
between "medicament" and "cosmetic" was highlighted in the following              G
words:-
         " It will be seen from the above definition of "cosmetic" that the
         cosmetic products are meant to improve appearance of a person,
9
   1996 (83) ELT AJ78 (SC)
"' 2005 ( 181) ELT 206 (SC)                                                       H
910              SUPREME COURT REPORTS                             (2016] 7 S.C.R.



A            that is, they enhance beauty, whereas a medicinal product or a
             medicament is meant to treat some medical condition. It may
             happen that while treating a particular medical problem, after the
             problem is cured, the appearance of the person concerned may
             improve. What is to be seen is the primary use of the product. To
             illustrate, a particular Ayurvedic product may be used fortreating
B
             baldness. Baldness is a medical problem. By use of the product if
             a person is able to grow hair on his head, his ailment of baldness
             is cured and the person's appearance may improve. The product
             used for the purpose cannot be described as cosmetic simply
             because it has ultimately led to improvement in the appearance of
c            the person. The primary role of the product was to grow hair on
             his head and cure his baldness."
             15. In Commissioner of Cenlrt1/ Excise v. Wocklumlt Life
      Sciences Limitet/11 the Court treated the two products, namely, povidone
      iodine cleansing solution USP and wokadine surgical scrub as
D     medicaments after appreciating the facts that the products are used by
      the surgeons for the purpose of cleaning or degerming their hands and
      scrubbing the surface of the skin of the patient before that portion is
      operated upon. Thereafter the Court observed thus:-
             "The purpose is to prevent the infection or disease. Therefore,
E            the product in question can be safely classified as a "medicament"
             which would fall under Chapter Sub-Heading 3003 which is a
             specific entry and not under Chapter Sub-Heading 3402.90 which
             is a residuary entry."
              16. The aforesaid analysis makes it absolutely clear that Mediker
F     which is used for anti-lice treatment is a drug because of its medicinal
      affect. This position has been accepted by this Court. Once it is a drug,
      it cannot be a shampoo. As a natural corollary, it will not invite the liability
      of levy of entry tax.
            17. The second product is Revive instant starch. The revenue
G     claimed it to be a chemical. An endeavour has been made to put it under
      Entry 55 Schedule II. Entry 55 Schedule II reads as follows:-
             "55. All kinds of chemicals and acids, sulpher and bleaching
             power."

H     "(2012) s sec 585
       STATE OF MADHYA PRADESH & ORS. v. MARICO                                911
             INDUSTRIES LTD. [DIPAK MISRA, J.]

       18. The stand of the assessee before the authorities was that it is      A
not a chemical. It is not sold or used for that purpose. It is a starch
manufactured by using Tapioca roots. The revenue, per contra, without
any material brought on record, put it in the category of a chemical. In
Union of l1Ulia v. Garware Nylons Ltd. 11 it has been held that the
burden of proof is on the taxing authorities to show that the particular
                                                                                B
case or item in question is taxable in the manner claimed by them.
Elucidating further, the Court has held that there should be material to
enter appropriate finding in that regard and the material may be either
oral or documents and it is forthe taxing authority to lay evidence in that
behalf even before the first adjudicating authority. Revive instant starch
is used while washing the clothes. In common parlance it is not regarded        c
and treated as a chemical or a bleaching powder. If the very substance
or product would have a chemical composition, then only it would make
the said substance a chemical within the meaning ofEnt1y 55. Needless
to say, the purpose and use are to be taken note of. Common parlance
test has to be applied. lfthe revenue desired to establish it as a chemical,
                                                                                D
it was obligatory on its part to adduce the evidence. As is manifest, no
evidence has been brought on record by the revenue that it is a chemical.
Therefore, it can safely be concluded that it is not a chemical.
       19. In view of the aforesaid analysis, the inevitable conclusion is
that the appeal is devoid of any substance and deserves to be dismissed
and, accordingly, we so direct. However, in the facts and circumstances         E
of the case, there shall be no order as to costs.
Kalpana K. Tripathy                                        Appeal dismissed.




12 (1996) 10   sec 413