LexSTATE OF MADHYA PRADESH versus MARICO INDUSTRIES LTD.
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[2016] 7 S.C.R. 899 STATE OF MADHYA PRADESH v. MARICO INDUSTRIES LTD. (Civil Appeal No. 8656 of2015) JULY22,2016 [DIPAK MISRA AND PRAFULLA C. PANT, JJ.) Madhya Pradesh Entry Tax Act, 1976: Schedule lll, Entry 32 - Levy of tax on the product 'Mediker ' - A B 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 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 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 899 F G H 900 A B c D E F G H SUPREME COURT REPORTS [2016] 7 S.C.R. 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, 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 (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 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 (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 402 - referred to. Case Law Reference 198.0. (1) SCR 938 referred to Para3 1988 (3) Sup11l. SCR 531 referred to Para3 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 STATE OF MADHYA PRADESH & ORS. v. MARICO INDUSTRIES LTD. 2005 (181) ELT 206 (SC) relied on Para 12 (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. 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. 901 A B 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 a
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