Updated: Aug 4, 2019
Here's an interesting story about Vicco's long-drawn battle against the Tax authorities. You might remember their catchy ad jingle from childhood, but do you know why it was made?
VICCO TURMERIC ! NAHI COSMETIC ! VICCO TURMERIC AYURVEDIC CREAM!!
It is no exaggeration to say that every Indian, at one point of his or her life, had heard this ad jingle. This ad, both in audio and visual formats, is so popular ever since it was aired first nearly three decades ago over AIR and Doordarshan, it became catchy with the audience who used to hum the tune as it was aired. The target audience of radio, TV and movies back in the day, both young and old, still remember most of the advertisements that publicised various Vicco products. Here is the famous Vicco ad jingle when it was aired for the first time that will bring you great nostalgia:
The various products of Vicco include Vicco Turmeric Cream, Vicco Turmeric Cream (Foam base), Vicco Turmeric S (Foam base), Vicco Turmeric Skin Cream (Oil base) and Vicco Turmeric - WSO Skin Cream (Non-greasy base). They also include toothpastes such as Vicco Vajradanti Paste, Vicco Vajradanti Powder, Vicco Vajradanti Sugar Free. You may wonder why we are talking about a product which many of us have often seen as an ad before the movies start and seldom used.
Well, there is an interesting backstory not many people are aware about. Read along to find out what could be the origin of this famous Ad jingle!
The Jingle You Know, The Story You Don't!
It was the year 1978 when the Central Excise Department asserted that Vicco Vajradanti and Vicco Turmeric Skin Cream were not eligible to be classified as ayurvedic medicines as claimed by the assessees, instead classified as cosmetics. Let’s quickly understand what Excise Duty is: it is a tax that is levied on manufacture of goods. All varieties of goods have been grouped under different heads and a tax rate has been allocated to each of them in the Central Excise Tariff Act.
The Excise Department’s decision to treat those products as cosmetics and not as ayurvedic medicines is significant because as a consequence to this claim, the tax liability of Vicco would increase exponentially. Vicco challenged this claim and filed a suit in the Civil Court. The civil judge decreed in favour of Vicco, saying “both products were ayurvedic medicinal preparations and not toothpaste or tooth powder or cosmetics” on the 6th of May, 1982. The Excise Department refused to give up and appealed before the Bombay High Court. In April,1988 even the High Court upheld the trial court’s decision that these products can not be classified as cosmetic products.
Only after the Supreme Court of India dismissed the Petition filed by the Excise Department, the Tax authorities accepted the classification by the High Court, of these two products, as ayurvedic medicines. It was April 1993 when the Tax Department finally accepted the judgement.
Fast forward 4 years, in 1997, with the new Central Excise Tariff Act 1985 as the base, the Revenue Authorities raised the Issue of Classification again.The appeal before the tribunal went in Vicco’s favour again, stating that the products were to be classified as ayurvedic medicines as claimed by the assessee in February, 2003. Between the periods June 1997 to May 2005 total of 11 show cause notices were issued by the Goa Commissionerate, asking Vicco to Re-Classify its products under the classification ‘cosmetics’ and also raised a demand for a sum of whooping Rs.3,41,81,782 (Rs 3.41 Crores) and a cess of Rs 12,292.
When the Supreme Court finally decided to intervene, a long heated debate between the parties lasted for many years.
Vicco’s attorneys contended against the department’s notices and cited the previous judgements by the Civil Court, the tribunal, the Bombay High Court and the Supreme Court which agreed with their claim that they are indeed ayurvedic medicines. The opposition argued saying that present proceedings are one of determining the classification of the products for the first time and not reopening any approved classification. The Tax Department’s claim was around the grounds of how the product was being interpreted in commercial parlance. Then, Vicco placed on record the affidavit of consumers, ayurvedic experts, wholesalers, dealers, retailers and chemists to emphasize the point that the commercial/trade understanding of the products is that they are medicines and not cosmetics.
Only in July, 2007 the Honorable Supreme Court finally came to a conclusion and stated that the disputed products are indeed ayurvedic medicines attracting ‘Nil’ rate of duty and not cosmetics as claimed by the Tax Authorities. Consequently, The Supreme Court also decreed that the demand notices that were issued and the orders to reclassify that were raised earlier by the Goa Commissionerate to be set aside.
Now that we are aware of this background of the ad, we’ll start looking at this advertisement in a completely different way. What do you think? Vicco used a single line to promote its products as ayurvedic medicines and also to constantly remind its users that it is a medicine and not a cosmetic product. If you ask me, every time this advertisement is aired, it is a subtle jab by Vicco at the Excise Department and also a reminder to the public that they manufacture ayurvedic medicines.
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