2019 PLP (Trib (PTD)

MRS. AMBREEN ASLAM, JUDICIAL MEMBER.

Through this order we intend to dispose of titled appeal filed by the taxpayer/ registered person against Order-in-Appeal No.59/2017 dated 14-12-2017 passed by the learned Commissioner Inland Revenue (Appeals-III), Karachi on the following grounds: 1) That the CIR(A) without applying the judicial mind and considering the circumstances of the case passed the unjustified order and merely on the assumption and treating the product taxable without giving any plausible evidence, hence, the order is unlawful and unwarranted. 2) That the order passed by the CIR(A) is bad in law and against the facts of the case as the supply of "ISPAGHOL HUSK" is out of scope of tax, as it is admittedly classified as "Ayurvedic Product" under Chapter 30 of First Schedule to the Custom Act, 1969 with PCT heading 3003-9010 and 3004-9010 and enlisted as exempt supply under serial No.104 of the Sixth Schedule to the Act. 3) That the CIR(A) was not justified to confirm the alleged allegation as sufficient evidence produced in support but notionally considered the product as food supplement/health product and not a medicine specifically registered under the Drug Act, hence, the supposed conclusion without having parallel evidence the order is illegal and unlawful as there is no room for any intendment in the fiscal law. 4) That the CIR(A) was not justified to treat the product as food item without ignoring its physical agriculture properties, as the agriculture product without mixing any other material is exempt like rice wheat including the product of the Appellant, hence, the order void null and illegal. 5) That under the facts and circumstances of the case of the appellant, the respondent is not justified to charge the default surcharge and 5% penalty under sections 34 and 33(5) of the Sales Tax Act, 1990 respectively. 6) That the appellant craves the permission to add, alter or amend any ground of appeal on or before the hearing of the appeal.

2. Brief facts of the case are that the taxpayer's case was selected for audit in terms of Section 25 of the Sales Tax Act, 1990 for the subject tax period from July 2015 to June 2016 by the Commissioner Inland Revenue, Zone-V, CRTO, Karachi. Scrutiny of record revealed that the taxpayer claimed exemption for sales tax/output tax on supplies of "Ispaghol Husk" of Rs.25,696,028/- in terms of Sr. No.10 of Table-II of 6th Schedule of the Sales Tax Act, 1990 whereas, the claimed exemption is related to agriculture produce of Pakistan, not subject to further process of manufacture. It was observed that taxpayer is registered as manufacturer, and is engaged in supplies of consumer goods i.e. Sucral, Salt and Ispaghol, and these products do not qualify for claimed exemptions. Accordingly, the taxpayer was called upon to show cause in terms of Section 11(2) of the Sales Tax Act, 1990 as to why exempt supplies of Rs.25,696,028/- may not be treated as taxable supplies and why output tax of Rs.4,368,324/- and further tax of Rs.513,920/- under Sections 3, 3(1A) and 34 of the Sales Tax Act, 1990 along with default surcharge may not be recovered from him.

3. The taxpayer adjusted input tax of Rs.66,325/- against hotel and restaurant invoices and these services are not relevant to nature of business. Adjustment of inplut tax of Rs.66,325/- is contravention of provision of Section 8(1)(f) of the Sales Tax Act, 1990. Detail of input tax is as under: NTN Supplier Name Input Tax 3428006-5 Muhammad Afzal 16,925 2259135-5 Royal Guest House 11,655 2565606-6 SS Club Hotel 1,740 0709998-3 Central Associates 2,900 0786765-4 Palace Enterprises (Pvt) Ltd 33,105 Total: 66,325

4. The taxpayer was communicated aforementioned discrepancies vide Show-Cause Notice bearing No. ACIR/Audit/Unit-01/Zone-V/ CRTO/Khi/2017/ 314 dated 07-04-2017 under Section 11(2) of Sales Tax Act, 1990 and fixed the case for personal hearing on 14-04-2017, on the date of hearing taxpayer along with its representative appeared along with supportive documents in defense of the allegations. The taxpayer on the date of compliance submitted written reply dated 14.04.2017. Not satisfied with the reply of the taxpayer, the ACIR passed Order-in-Original No.21 of 2017/521 dated 29-04-2017.

5. Being aggrieved and dissatisfied with the treatment meted out through Order-in-Original No.21 of 2017/521 dated 29-04-2017, passed by the ACIR, the taxpayer preferred appeal before learned CIR(A) who decided the appeal of the taxpayer by passing Order No.59/2017 dated 14-12-2017 with the following observations. "4.1 In this case, the appellant in its sales tax return claimed exemption in respect of supplies "Ispaghol Husk" in terms of S. No.10 of Table-II of 6th Schedule to the Act. The Learned officer issued show-cause notice to the appellant, as in his opinion, since the said exemption was related to agricultural produce not subjected to further process, the case of the appellant was not entitled for subject exemption. In response, the Learned AR of the appellant through letter dated 14-04-2017 informed that such supplies are exempt under S.No.12 of the 6th Schedule to the Act. Besides, it was also contended that "Ispaghol" is exempt under S.No.104 of the 6th Schedule to the Act. These relevant provisions are reproduced for ready reference:- (1) S.No.10 of table-II of 6th Schedule: Agricultural produce of Pakistan, not subject of any further process of manufacture. (2) S.No.12 of the 6th Schedule: Live plants including bulbs, roots and the like (3) Sr.No.104 of Sixth Schedule of Sales Tax Act 1990: Substances registered as drugs under the Drug Act, 1976 and medicament as are classifiable under Chapter 30 of the First Schedule to the Customs Act, 1969 except the following, even if medicated or medicinal in nature namely;...." (i) Chapter 30 of Customs tariff. PCT Code Description CD% 3004.9010 Unani, ayurvadic and other oriental type of medicine. 10 4.2 While before this office the Learned AR contended that the subject supply comes under S.No.104 of 6th Schedule to the Act. He further stated that the product Ispaghol comes under the definition of "Alternative Medicine" as provided in Chapter-I, Section 2(ii) of the Act No.XXI of 2012 of Drug Regulatory Authority of Pakistan, which reads as:- Section 2(ii) "Alternative Medicine" means a product used exclusively in Homeopathic, Unani, Ayurvadic, biochemic, Chinese or other traditional system of treatment." He also referred to Schedule-I Section 2 of the said Act which reads as:- Section 2, Drug includes (a) any substance or mixture of substances that is manufactured, sold, stored, offered for sale or represented for internal or external use in the treatment, mitigation, prevention or diagnosis of diseases, an abnormal physical state or the symptoms thereof in human beings or animals or the restoration, correction, or modification of organic functions in human beings or animals, including substance used or prepared for use in accordance with the Ayurvedic, Unani, Homeopathic; Chinese or biochemic system of treatment except those substances and in accordance with such conditions as may be prescribed;

5. Perusal of above clearly reflect that the subject supply does not come in the ambit of S. Nos. 10 and 12 of the 6th Schedule to the Act. While, as regards S. No. 104 of 6th Schedule it mentions of substances registered as drugs under the Drug Act, 1976 and medicament as classifiable under chapter 30 of the First Schedule to the Customs Act, 1969. Whose relevant PCT code 3004.9010 describes, "Unani, ayurvadic and other oriental type of medicine". It is an admitted fact that "Ispaghol" has not been registered as drug under the Drugs Act, 1976. The Learned AR submitted photocopy of a paper titled, "Form-6" [see Rule 7(16)] "Provisional certificate for Enlistment as Manufacturer". E.No.0022 as evidence of registration of "Ispaghol" as a drug. While infact, for registration of a drug a document namely "marketing authorization" is issued by the Drug Registration Board set up under the authorization" is issued by the Drug Registration Board set up under the Drug Act, 1976, as a certificate of registration. Such certification to manufacture a drug is issued on Form-2. Submitted photocopy not only contradicts the title but also the ingredients of Form-6, which actually is Certificate of Registration under Rules 28 and 29(4). Certificate of Registration of a drug [Form-2] is signed by the chairman as well as Secretary Registration Board while the submitted certificate is signed by Abdul Sattar Sohrani, Deputy Drug Controller, DRAP on 21-09-2015. When the above position was explained to the Learned AR, he sought time and came up with another document signed by the above named officer reproduced below:- PROVISIONAL CERTIFICATE FOR ENLISTMENT OF PRODUCTS Following products of Messrs Father and Sons (Pvt.) Ltd., E-46, S.I.T.E., Karachi-Pakistan are manufactured at the mentioned site are provisionally enlisted (Market Authorization). Enlistment No. Branch Name of the Product Common Name of Ingredient Recommended use Pack Size Maximum Retail Price 022 Premium Ispaghol Ispaghol Husk Supplement for maintenance of good health 85 gram Jar 140 gram Jar 50 gram Sachet 4 gram Sachet As approved by the Authority and Federal Government vide file No.12-1/ 2015 (Health and OTC) Part I Condition for Enlistment: a) The Product(s) shall be tested for microbial contamination and it is verified that these products does not contain any type pathogenic microbial contamination. Provide that disinfectants and homeopathic medicines containing 50% or above concentration of ethanol shall be exempted from such microbial testing. b) The content the heavy material in the finished product shall be within the prescribed limits as defined in the rules. c) The product shall not contain any toxic or dangerous materials which are injurious to health. d) The finished products shall be tested and released before sale by the Quality Control Department of the unit or contract laboratory approved by the Authority. e) The products shall remain safe, effective and retain its quality during the whole shelf life. f) The product conforms to all the relevant provisions of the Drug Regulatory Authority of Pakistan Act, 2012 (XXI) of 2012. g) The product is not contaminated with any type of ingredient not enlisted in the formula approved by the Authority. h) The product does not contain any prohibited substance or Allopathic or any western ingredient which is not part of approved formulation. i) The Manufacturer/importer shall be, responsible for all the liabilities or damage occurred due to usage of provisionally enlisted products. Dated: 28-09-2015 _________Sd/- ___________________ Abdul Sattar Sohrani Deputy Director Division of Health and OTC Products Drug Regulatory Authority of Pakistan Perusal of above dearly shows that above documents is a provisional certificate for Enlistment of products in respect of market authorization for the sale of "Ispaghol husk" under a particular brand name/wieghtage with certain precautionary measures been mentioned as, "Supplement for maintenance of good health". This confirms that as per Drug Act, "Ispaghol Husk" is classified as a "food supplement" and not a drug. These evidences submitted by the Learned AR are not serving the cause of the appellant in any way, rather supports departmental view besides being not the prescribed document (i.e. Form-2), and thus are discarded being not the requisite document as per law. 5.1 The Learned AR then sought further time and again came up with SRO (412)(I)/2014 dated May 27th, 2014 issued by "Government of Pakistan Drug Regulatory Authority of Pakistan, Ministry of National Health Services Regulations and Coordination" whose Section 1 reads as:-- "

1. Short Title and commencement:- (1) These rules may be called the Alternative Medicines and Health Products (Enlistment) Rules, 2014." The Learned AR asserted that "Ispaghol" is an 'Alternative Medicine" as per Section 2(viii) of ibid Rules or "Herbal Medicine Product" as defined in Section 2(xxxv) which reads as:- (viii) "Alternative Medicine" means medicinal products which include indigenous or unani medicine, imported medicinal product, homeopathic medicines, new medicines, herbal preparation, herbal substance, proprietary medicines, herbal medicinal product, phyto-medicines or any other-product meant for therapeutic or preventive use which have been derived from plant, animal or mineral ingredients alone or their combinations but does not contain chemically defined synthetic ingredients; (xxxv) "herbal medicinal products" means any medicinal product, exclusively containing as active substances one or more herbal substances or one or more herbal preparations, or one or more such herbal substances in combination with one or more such herbal preparations; 5.2 I am unable to understand, as to how "Ispaghol Husk" classified as food supplement under the "Drug Act" can come under above definitions. Rather, in my well considered opinions, Ispaghol Husk is not a medicine or alternative medicine, but comes under the definition of health products, "herbal preparations" and "herbal substances" as defined under section 2 (xxxiii), (xxxvi) and (xxxvii) which reads as follows:- (xxxiii) "health products" means health and OTC products (non-drugs) as defined in the DRAP Act and include pro-biotic, pre-biotic, disinfectants, food supplements, nutritional products, baby milk and foods, medicated cosmetics, medicated soaps, medicated shampoos, medicated plasters and derma-care products or any other product which may be notified in official gazette by DRAP as Health and OTC Products; (xxxvi) "herbal preparations" means preparation obtained by subjecting herbal substances to treatment such as extraction, distillation, extraction, fractionation, purification, concentration or fermentation, including communicated or powdered herbal substances, tinctures, extracts, isolates, essential oil, expressed juices and processed exudates; (xxxvii) "herbal substances" means all mainly whole, fragmented or cut plants, plant parts, algae, fungi, lichen in a unprocessed, usually dried form but sometimes fresh. Certain exudates that have not been subjected to a specific treatment are also considered to be herbal substances. Herbal substances are precisely defined by the plant part used and the botanical name according to the binominal system (genus, species, variety); 5.3 Here, it merits mention that chapter 30 of customs tariff PCT code 3040.9010 speaks of unani, ayurvadic and other oriental type of medicine, which has been defined under section 2(xivi) reproduced below:- (xlvi) "Indigenous or Unani medicine "means:- (a) Any substance or mixture of substances, product, or preparations intended for external or internal use in human being or animals for the treatment, mitigation, or prevention of disease, an abnormal physical state, or the symptoms thereof, or for restoration, correction or modification of organic functions of human beings or animals, which contains as active substances any combination of ingredients, or is in accordance to a formula, prescribed in the authoritative books of Tibb-e-Unani and a prescribed under the rules; and. (b) Any substance or material or mixtures thereof as may be prescribed by the Authorikty in the Official gazette; 5.4 Perusal of above definitions makes it clear that neither "Ispaghol" can not be termed an "alternate medicine" nor a "drug" as prescribed therein. If the plea of the appellant is accepted that "Ispaghol" is a medicine being traditionally used for constipation, etc then there is a full range of such fruits, seeds, vegetables, etc. considered to be associated with treatment of different ailments. For instance banana is advised in diaherria/lose motion conditions, turmeric and mustard oil in skin injuries, grapefruit for controlling obesity, etc, Kalonji for many diseases, Ginger for blood pressure, Cinamon (Daar Cheeni) for heart and blood pressure and the list goes on. If "Ispaghol" is taken as a medicine then all such fruits, vegetables, herbs, seeds, etc are to be taken as well. Infact every organic substance, be it a fruit, vegetable roots or herbs have some medicinal significance. While, under the above quoted provisions of law, "Ispaghol" can not be rated as a medicine in the true sense of the term. It is clearly a food supplement falling under the definitions as enunciated in Section 2(xxxvi)(xxxvii) read with provisional certificate for enlistment of products as reproduced at Para 5 above. While as per the relevant provision of law i.e. S. No. 104 of 6th Schedule to the Act, Drug Act, 1976 and Chapter 30 of the 1st Schedule to the Customs Act, 1969 (as primarily relied by the appellant), it is required either to be registered as Drug under the Drugs Act or must fall in Chapter 30 ibid. As discussed above, Ispaghol does not fall in either of them. Rather, it falls in the category of "food supplement; "health products", "herbal preparations" and "herbal substances" as quoted above.

6. In view of above discussion, I feel no hesitation in confirming the impugned order, being passed in accordance with law."

6. Again aggrieved and dissatisfied with the Order-in-Appeal No.59/2017 dated 14-12-2017 passed by learned CIR(A), the taxpayer filed instant appeal before this Tribunal.

7. On the date of hearing, Mr. Ajeet Sunder, Advocate attended court proceedings on behalf of appellant/taxpayer while Mr. Muhammad Salman, DR attended on behalf of department/respondent.

8. During course of proceedings, the learned counsel for the taxpayer argued that the CIR(A) without applying the judicial mind and considering the circumstances of the case passed unjustified order merely on the assumption and treating the product taxable without giving any plausible evidence, hence, the order is unlawful and unwarranted,

9. The learned counsel for the taxpayer further argued that the order passed by the CIR(A) is bad in law and against the facts of the case as the supply of "ISPAGHOL HUSK" is out of scope of tax, as it is admittedly classified as "Ayurvedic Product" under Chapter 30 of First Schedule to the Custom Act, 1969 with PCT headings 3003-9010 and 3004-9010 and enlisted as exempt supply under serial No.104 of the Sixth Schedule to the Act. The learned counsel contended that the product is exempt from various aspects as it is known as Psyllium Husk which is purely in shape of the seed of the plant called Planovate, therefore being the natural agricultural product without having any mixture is also enjoys exemption like rice, wheat and other agriculture products commonly sold in the country however, the CIR(A) treating the Ispaghol taxable on the ground that it is not registered under the Drug Act and considering as food item/supplement blindly confirmed the order.

10. The learned counsel contended that the learned CIR(A) has rejected the exemption of sales tax on supply of the product 'ISPAGHOL' by assigning reasons that the words medicaments, medicinal, Unani and Ayurvedic have not been defined in the Sales Tax Act, 1990. However the issue of exemption should have considered on the basis of the common dictionary meaning but not appreciated this aspect of the case too. In this regard he referred following dictionary meanings to prove the product "ISPAGHOL" is fallen within the meaning of Ayurvedic medicine as under:- "A traditional system of medicine from India in which illnesses are treated with combination of certain foods, herbs massage and special physical exercises". (Source: www.dictionary.Cambridge.orq) 'A traditional Indian medical treatment that involves using herbs, eating certain types of foods and doing yoga in order to stay health ". (Source: www. longmandictionary. com) 'Psyllium seed locally known as Spangur or Ispaghol is the world famous medicinal corp. Most of the species of Ispaghol grown in Pakistan and Sindh are used for medicinal purposes. (Source: Article Psyllium Seed by Dr. Shamsuddin Tunio, Department of Agronomy, Sindh Agriculture University, Tando Jam). "Plantago ovate is economically an important medical plant commonly cultivated in different parts of India, Pakistan and Iran and some part of Europe. It has a long history of traditional uses with healing properties. There are various applications of seed husk and its marketable products for medicine and industrial uses. The seed husk is commonly called as psyllium or isabgol has a potential role in the treatment and prevention of gastrointestinal and bowel diseases". (Source: Research paper by ACTA Universities Cibiniensis).

11. The learned counsel argued that the Officer considered the product 'ISPAGHOL' as Food Supplement without any qualified reference and evidence in support but with simple contention that "ISPAGHOL HUSK" is a common household product which is used as Food Supplement by the healthy people. However, the product ISPAGHOL HUSK is recognized as Ayurvedic medicinal product which is defined as under:- ISPAGHOL is a traditional medicine that is used in Ayurveda for the treatment of problems associated with constipation. In Ayurveda, psyllium (ISPAGHOL) is considered to have pungent, astringent and cooling properties. It balances the three humors vata, Pitta and Kapha, it reduces inflammation of the digestive tract and alleviates constipation and hemorrhoids. Ispaghol is rich in fibers so it may initially cause gas". (Source www,ayurvedicindia.info). "Ispaghol husk in an Ayurvedic / herbal medicina". (Source: Isabghol Husk-A Herbal Remedy for Human Health-Research Article by Vipin K. Sharma and A. Bhattacharya).

12. The learned counsel stated that the "ISPAGHOL" being Ayurvedic product has been recognized and defined in section 2(ii) of Drug Regulatory Authority of Pakistan Act, 2012 as "Alternative Medicine" as under:- 'Alternative Medicine' means a product used exclusively in Homeopathic, Unani, Ayurvedic, Biochemic, Chinese or other traditional system of treatment': In Schedule-I of the Drug Regulatory Authority of Pakistan Act, 2012 the DRUG includes:- Any substance or mixture of substances that is manufactured, sold, stored offered for sale or represented for internal or external use in the treatment, mitigation, prevention or diagnosis of diseases, an abnormal physical state, or the symptoms thereof in human beings or animals or the restoration, correction, or modification of organic functions in human being or animals, including substance used or prepared for use in accordance with Ayurvedic, Unani, Homeopathic, Chinese or biochemic system of treatment except those substances and in accordance with such conditions as may be prescribed;

13. The learned counsel contended that the CIR(A) was not justified to confirm the alleged allegation as sufficient evidence produced in support but notionally considered the product as food supplement/health product and not a medicine specifically registered under the Drug Act, hence, the supposed conclusion without having parallel evidence the order is illegal and unlawful as there is no room for any intendment in the fiscal law. He further contended that the CIR(A) was not justified to treat the product as food item without ignoring its physical agriculture properties, as the agriculture product without mixing any other material is exempt like rice wheat including the product of the Appellant, hence, the order void null and illegal.

14. The learned counsel for the taxpayer urged that under the facts and circumstances of the case of the appellant/taxpayer, the department/ respondent is not justified to charge the default surcharge and 5% penalty under sections 34 and 33(5) of the Sales Tax Act, 1990 respectively. Lastly, he prayed, the impugned orders passed by ACIR and learned CIR(A) may pleased be dismissed. In support of his arguments, he relied upon following case laws: i. 2017 PTD 1372 [Supreme Court of Pakistan] Pakistan Television Corporation Limited v. Commissioner Inland Revenue (Legal) LTU, Islamabad and others. ii. 2017 PTD (Trib.) 2316 [Messrs Habib Industries (Pvt.) Ltd. Karachi v. I.A.C. Range-III, Company-IV, Karachi].

15. On the other hand, the learned DR opposed the arguments advanced by the learned counsel for the taxpayer. He fully supported the impugned orders passed by the learned CIR(A) and ACIR. He urged that the learned CIR(A) and DCIR have rightly passed their respective orders in accordance with law. The learned DR contended that the taxpayer is a manufacturer of consumer goods/house hold goods which are classified as food or food supplements i.e. "SUCRAK, SALT and ISPATHOL." The taxpayer, in its Sales Tax Returns for the tax period from July 2015 to June 2016, claimed exemption for payment of Sales Tax under Serial No.10 of Table-2 of 6th Schedule of Sales Tax Act, 1990.

16. The learned DR argued that the Ispaghol is a by product of a plant and it is not an agriculture produce which does not qualify for exemption in terms of Serial No.10 of Table-2 of 6th Schedule of Sales Tax Act, 1990. He further argued that the taxpayer has taken "Ispaghol Husk" as Ayurvedic product and claimed exemption in terms of Sr. No.104 of the Sales Tax Act, 1990.

17. The learned DR urged that the Ispaghol Husk is a common house hold product which is used as "Food Supplement" by the healthy people. Ispaghol husk does not qualify for registration as drug under Drug Act, 1976. The DR stated that the Pakistan Customs Tariff PCT heading 30.04 defines that medicaments (excluding goods of headings 30.02, 30.05, 30.06) consisting for mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses (including those in the form of transdormal administration systems) in forms or packings for retail sales, Plain reading of relevant part of Customs Tariff reveals that Unani, Ayurvadic and other oriental type medicines qualify for exemption but ispaghol husk is not a medicine.

18. The learned DR contended that the Ispaghol Husk does not qualify for exemption in terms of Sr. No.104 of the Sixth Schedule of Sales Tax Act, 1990. Thus, the allegations as framed out in show-cause notice stand established and sales tax of Rs.4,208,003/- (Rs.22,147,385 @ 19% inclusive of further tax) is recoverable along with default surcharge under sections 3, 3(1A) and 34 of the Sales Tax Act, 1990. He further contended that the taxpayer was confronted for inadmissible input tax claim of Rs.66,325/- against hotel and restaurant services which are not relevant to the nature of the business being carried out by the taxpayer.

19. The learned DR argued that the taxpayer was provided opportunity of defense of allegation vide show-cause notice. Section 8(1)(f) of the Sales Tax Act, 1990 describes that tax credit and input tax claim against goods and services, which are not relevant to taxable goods and services, acquired for personal or non business use, is not allowed. Thus inadmissible input tax of Rs.66,325/- is recoverable along with default surcharge under sections 3 and 34 of the Sales Tax Act. Lastly, he prayed to dismiss the instant appeal of the taxpayer.

20. We have considered the arguments advanced by the learned representatives of both sides, perused the impugned orders, and have also gone through the material available on record as well as grounds of appeal. To decide the instant appeal the question before us is whether the impugned order passed by the learned CIR (A) requires interference?

21. Keeping in mind contentions of the parties we have gone through the Schedules and relevant provisions of law. Precisely we observed that the Commissioner perplexed the matter by commingling Ispaghol Husk with food supplement as define under the Drug Act. He also mingle the definition of health product "herbal preparation and herbal substances" in terms of definition enumerate under Section 29(xxxiii), (xxxvi) and (xxxvii) of Drugs Act.

22. So keeping in mind dissention and observations of the Commissioner, it would be just and proper to understand the specification of the product. As per definitions of many Dictionaries and elucidations of many discipline, the word "Psyllium" originated from Greek word for a flea, referring to the size, shape and whitish colour of the seed. Psyllium is the husk ( ) of the seed of the Plantain and is used for general intestinal health.

23. We further analyze the Particularization of Psyllium Husk as under: Psyllium husk is white fibrous material derived from the outer coating of the psyllium seed, like the bran layer of grains. The husk of Psyllium is the actual coating of mucilage around the seed. It is considered pure dietary fiber. Psyllium husk consists of the epidermis and the collapsed adjacent layers removed from the dried ripe seeds of Plantago Ovata. Psyllium Husk is a natural agent to provide sufficient dietary fibre to the fibre deficient food. Psyllium husks promote easy, healthy elimination and sweep waste out of the colon more quickly. To maintain regularity and speed waste removal. The soluble fiber found in psyllium husks plays an important role in lowering cholesterol. Processing by the Psyllium Husk in body: Psyllium husks are a concentrated source of dietary fiber with many health benefits, composed mostly of hemicelluloses. They are not digested in the small intestine, but are partially broken down in the colon, where they act as a food source for friendly flora. Mostly, they act as a sponge in the intestinal tract, swelling as they absorb water, toxins and waste material. This forms a soft, bulky mass that passes through the colon more quickly and evacuates more smoothly and easily. Psyllium husk contains huge amount of soluble and insoluble natural fibers responsible for its laxative action. When psyllium Husk is mixed with water or other liquids like juice, it forms a gel like gelatinous mass. It moves down the digestive organ soaking up toxins and harmful residues, it flushes out toxins of the body through stools. Soluble fibers content of Psyllium husk has ability to bind with bile acids - an important player in digestion of fats found in our body from cholesterol. This process lowers circulating blood cholesterol level, by excretion of those facts. Psyllium Husk is a complete natural fibre and does not contain any additives or preservatives. Usage of Psyllium or Isapghol and Benefits: Psyllium is mainly used as a dietary fiber to relieve symptoms of constipation and mild diarrhea and occasionally as a food thickener. Research has shown lowering of blood cholesterol levels in people with elevated cholesterol[1] and in people with type 2 diabetes, lowering glucose levels. Psyllium is mainly used as a dietary fiber, which is not absorbed by the small intestine. The purely mechanical action of psyllium mucilage is to absorb excess water while stimulating normal bowel elimination. Although its main use has been as a laxative, it is more appropriately termed a true dietary fiber and as such can help reduce the symptoms of both constipation and mild diarrhea. The laxative properties of psyllium are attributed to the fiber absorbing water and subsequently softening the stool. Psyllium fiber is an effective and well-tolerated part of a prudent diet for the treatment of mild to moderate hypercholesterolemia, functioning by interfering with cholesterol absorption.

24. We further add here step wise process of Psyllium Husk from Psyllium Seeds. Raw material Fumigated. Cleaning Mechanically. Removal of mud, stones etc. Removal of insect Fragments. Removal of iron particles. Grinding. De-Husking. Manual mixing.

25. The purpose of mentioning above steps is that it should be clear here that firstly understanding of Psyllium may develop and secondly the way it works in body and the process through which the husk separated from the seed.

26. Now we would like to discuss about food supplement as the observations of the Commissioner are based on said phrase, food supplements in various dictionaries are defined as food stuffs that are meant to supplement the normal diet and which are concentrated sources of nutrients or other substance with nutritional physiological effect along or in combination. Food supplements are add in diet and should not considered a substitute for food.

27. So from the above comparison, it is evident that Psyllium husk cannot considered as food supplements. We are cautious enough by holding that natural product are being used by the people to prevent illness, cure, infection, relieve, fever and heal wounds for example Turmeric Supplements, Mint Tea, Cardamom Tea, Honey etc, the usage of above mentioned natural products can be called conventional usage.

28. Keeping in mind above mentioned circumstances now we take in account Serial No. 104 of Table II of Sixth Schedule of Sales Tax Act 1990, it says Agricultural Produce of Pakistan not subject to any further process of manufacture. From the above clause of the provision it is clear that Psyllium is a seed (agricultural produce) and the husk/ispaghol does not processed for manufacturing purpose as we already mentioned the process of Psyllium husk supra while discussing the step wise process of Psyllium husk from the Psyllium seeds.

29. We are inclined to hold to the extent of Ispaghol/husk does qualify for exemption in terms of Serial No.104 of the Sixth Schedule of Sales Tax Act, 1990.

30. So considering all above mentioned circumstances, comparisons, provisions of law and schedules mentioned supra, we declare that Psyllium husk is not taxable being husk ( ) of Psyllium Seed in tems of Serial No.104 of Table II of Sixth Schedule of Sales Tax Act, 1990. So to that effect impugned order requires interference so that same is set aside only to the mentioned effect.

31. Appeal stands disposed of in the manner as indicated above. HBT/76/Tax(Trib.) Order accordingly.