M/s Reckitt Benckiser (India) Ltd. vs Commissioner Commercial Taxes & Ors.

(h) (vi) being medicaments corresponding to HSN Code 3004.90 of the III Schedule, and thus also subject to tax at the rate of 4% – Held: It is required to be noted that HSN Code 3808 has been deleted from Entry 44(5) w.e.f. 01.07.2006 and from 21.01.2006 the aforesaid products would fall under Sl. No.66 namely ‘Mosquito repellant’, which is the specific entry and subject to VAT at 12.5% – Therefore, Mosquito Mats, Coils and Vaporizers and Mortein Insect Killers products shall not be classifiable under Entry 44(5) as insecticides – Further, after introduction of SRO 82/06 w.e.f. 22.01.2006 the Harpic and Lizol would fall under Sl. No. 27(4) of SRO 82/06. Sl. No.27(4) thus is a specific entry – What is required to be considered is the dominant use which is cleaning and removal of stains of floor and the toilet – Thereafter, the same shall not fall under Entry 44(5) – HSN Code No.3808 as insecticides or disinfectant – Entry 27(4) of SRO No. 82 of 2006 is with respect to stain busters, stain removers, abir, blue and all kinds of cleaning powder and liquids including floor and toilet cleaning – Therefore, Harpic and Lizol shall not be classifiable under Entry 44(5) and shall be classifiable under Entry 27(4) of SRO 82/2006 chargeable to tax at 12.5% – As far as (iv) Dettol Antiseptic Liquid is concerned, Dettol is used as an antiseptic and is used in hospitals for surgical use, medical use and midwifery due to therapeutic & prophylactic properties the same would fall under Entry 36(8) (h) (vi) as claimed by the appellant. Interpretation of Statute – Principles of classification which are fundamental to any matter relating to classification under the taxing statute are: (a) Plain meaning to be given to the taxing provision; (b) burden to prove classification in a particular entry is always on the Revenue; (c) any ambiguity has to be resolved in favour of the assessee and in case of a reasonable doubt, the construction most beneficial to the assessee must be adopted; (d) specific entry would override a residuary entry; and (e) resort to residuary entry is to be taken as a last measure, only when by liberal construction the specific entry cannot cover the goods in question. Partly allowing the appeal, the Court

HELD: 1. It is required to be noted that HSN Code 3808 has been deleted from Entry 44(5) w.e.f. 01.07.2006 and from 21.01.2006 the aforesaid products would fall under Sl. No.66 namely ‘Mosquito repellant’, which is the specific entry and subject to VAT at 12.5%. The insecticides under Entry 44(5) therefore can be said to be a general entry. Once there is a specific entry the ‘Mosquito Repellant’, thereafter one is not required to go to the definition under another Act namely Insecticides Act. Sl.No.66 of Notification SRO 82/06 dated 21.01.2006 issued under Section 6(1)(d) of the Kerala VAT Act which covers “Mosquito Repellants”. [Para 9][74-H; 75-A-B]

2. It is required to be noted that Entry 44(5) which includes insecticides relates to products operations. In the present case under the KVAT Act there is a specific Entry Mosquito repellant so far as the product electric or electronic mosquito repellents, gadgets and insect repellents, devices and parts and accessories therefore the thereof said are specific concerned entry shall and be applicable in any case, the same cannot be said to be insecticides. The view taken by the High Court is right that Mosquito Mats, Coils and Vaporizers and Mortein Insect Killers products shall not be classifiable under Entry 44(5) as insecticides. [Para 9.1][75-B-D]

3. It is required to be noted that after introduction of SRO 82/06 w.e.f. 22.01.2006 the Harpic and Lizol would fall under Sl. No. 27(4) of SRO 82/06. Sl. No.27(4) thus is a specific entry. [Para 9.3][75-G-H]

4. Considering the dominant use of Dettol and the active ingredients of Dettol referred to hereinabove and that the Dettol is used as an antiseptic and is used in hospitals for surgical use, medical use and midwifery due to therapeutic & prophylactic properties the same would fall under Entry 36(8) (h) (vi) as claimed by the appellant and would not fall under the residuary entry as claimed by the Revenue. [Para 9.10][78-B]

5. As per the settled position of law while considering a particular entry the principles of classification which are fundamental to any matter relating to classification under the taxing statute are: (a) plain meaning to be given to the taxing provision; (b) burden to prove classification in a particular entry is always on the Revenue; (c) any ambiguity has to be resolved in favour of the assessee and in case of a reasonable doubt, the construction most beneficial to the assessee must be adopted;

(d) specific entry would override a residuary entry; and (e) resort to residuary entry is to be taken as a last measure, only when by liberal construction the specific entry cannot cover the goods in question. [Para 9.8][77-D-G]

Ponds India Ltd. vs. CTT (2008) 8 SCC 369 : [2008] 9 SCR 496; Bombay Chemicals Pvt. Ltd. vs. CCE 1995 Supp. (2) SCC 646 : [1995] 3 SCR 369; ICPA Health Products (P) Ltd. vs. CCE, Vadodara (2004) 4 SCC 481 : [2004] 1 Supp. SCR 409; Sujanil Chemo Industries vs. CCE & Customs, Pune (2005) 4 SCC 189; Sonic Electrochem vs. STO (1998) 6 SCC 397 : [1998] 3 SCR 1102 – referred to.

Knight Queen Industries Pvt. Ltd. vs. State of UP, 2005 SCC Online All 1214; Order dated 14.07.2006 passed by Supreme Court in State of UP vs. Knight Queen Industries Pvt. Ltd.; Ashok Agencies vs. State of Karnataka 2008 SCC Online Kar 141; State of

Karnataka vs. Godrej Consumer Products Ltd. (2014)

80 Kar LJ 328; Reckitt Benckiser India Ltd. vs. State of Andhra Pradesh (Tax Revision Case No.10 of 2007, Andhra Pradesh High Court); Reckitt Benckiser India Ltd. vs. Assistant Commercial Taxes Officer & Ors. (STR-11/2012, Rajasthan High Court) – referred to.