Cosmetic to medicine costs Old Spice Rs 40 crore
25 August 1998 10:34 IST Is the after shave lotion a cosmetic or a medicine ? The 13-year long controversy in Goa seems to have come to an end with the state authorities ultimately reversing its own decision and classifying it as a toilet preparation, like the case all over the country.
It is the Colfax Laboratories, manufacturing Old Spice and Blue Stratos after shave lotions, who will have to now ultimately pay around Rs 40 crore towards the excise duty, which the influential industrial house in Goa had succeeded in getting waived.
Acting on the high court order to take a final decision after proper hearings, state excise commissioner R I Jaiprakash has directed the firm to pay Rs 18.5 crore towards the arrears within 30 days for the period from 1985 to 1991. The rest of the amount would be calculated later.
The difference in excise duty between the medicinal preparation and cosmetics is enormous. While the Colfax was paying only Rs 10 per bulk litre on these products once they were reclassified as medicinal preparations, toilet preparations are charged 100 per cent advalorem duty.
Following a formal hearing on the matter, Jaiprakash in the order has also rejected company's argument that benzyl alcohol is used in the after shave lotion because of its mild anaesthetic and antiseptic properties while propylene glycol is used in preparing a moisturiser.
"The after shave lotion could not classified as medicinal preparation merely because its individual component has medicinal properties as claimed by the Colfax Laboratories", states Jaiprakash in the order.
The scandalous reclassification made during Pratapsing Rane's second-time Congress regime in March 1985 came to light in '91, after the Rane government was toppled by his own partymen. The excise commissioner's order to pay the arrears was then challenged by the company in the high court.
Though Jaiprakash specifically mentions that both the products were licensed as cosmetics, the company is likely to once again approach the court, challenging the state government order, which has incidentally come when the Rane government is toppled once again.
