COMMISSIONER OF SALES TAX Vs. CADILA HEALTHCARE LIMITED

JUDGEMENT

(1.) THIS appeal is preferred by the Appellant against the order dated August 2, 2008 passed by the Second Bench of the Maharashtra Sales Tax Tribunal at Mumbai ("MSTT", for short) by which it was held that nutralite table margarine is classifiable under Schedule C, entry 102 of the Maharashtra Value Added Tax Act of 2002 and therefore, it is taxable at the rate of four per cent.

(2.) IN the present appeal, the following question is required to be answered:

(3.) THE learned Counsel Mr. Sonpal appearing for the Appellants submitted that nutralite is not prepared by hydrogenation but it is a separate product made by emulsification of water, salt and vegetable oil. He submitted that entry No. 100 of the Schedule under the Maharashtra Value Added Tax Act of 2002 is of vanaspati (hydrogenated vegetable oil) entry 102 vegetable oil including gingili, castor and bran oil. Nutralite table margarine is a separate entity, different from the vegetable oil. It is a separate product emerges out of process of emulsification. The learned Counsel has submitted that palm oil is a raw material used for making nutralite table margarine. Nutralite is 80 per cent of vegetable oil. He submitted that the Tribunal has erred in holding nutralite table margarine as vegetable oil and taxable at the rate of four per cent only. The learned Counsel has submitted that nutralite margarine is not used for baking but used as a spread on the eatables. While deciding whether commodity falls under the category of entry 100 or 102 of Schedule C or Schedule E, one has to consider predominant use and ancillary use of the product, i.e., margarine. He argued that if one goes to the shop and places order for vegetable oil, nobody will give nutralite table margarine for vegetable oil. Vegetable oil is not directly consumable or edible. The learned Counsel in order to buttress his submissions, relied on common parlance test and reversible test. He elaborated that if nutralite table margarine is gained after process of emulsification on the palm oil, it cannot be reverted back to palm oil.