New Delhi: The Supreme Court has dismissed a petition filed by the excise department contending that clove, sandalwood and Aniseed oil concentrates marketed by Dabur India attracted 18% excise duty rather than 8% as claimed by the company.
A bench headed by Justice S B Sinha rejected the department’s plea that these essential oils being obtained as aqueous distillates attracted duty at the rate of 18% ad valorem up to February 1999 and 16% thereafter.
Stating that the assessee was liable to pay around Rs10.67 lakh between February 1988 and December 1999, additional solicitor general Mohan Parasaran and counsel Binu Tamta alleged that the company had failed to produce any literature in support of its claim that aniseed oil concentrates or commonly called ‘Saunf Ka Ark’, marketed as a medicine for constipation, indigestion and gripping pains, was prepared in accordance with the authoritative ayurvedic books.
Dabur had declared that clove and sandalwood oil, sold in the small packings of 5 ml, were generic medicines and attracted 8% duty, while its ‘Saunf ka Ark’, an ayurvedic generic medicine, attracted nil duty.
The assistant commissioner had confirmed demand duty on all the three products and imposed penalty of an equal amount, while the commissioner (appeals) and the tribunal had held in favour of Dabur and declared ‘Saunf ka Ark’ as an ayurvedic medicine.
Dabur stated that the clove and sandalwood oil purchased by it in bulk was repacked in small packets and the same does not amount to manufacture.