2005 (2) TMI 805

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..... /opposite party (hereinafter referred to as "dealer") is a unit of Pradeshik Co-operative Dairy Federation, Government of U.P. and used to supply the frozen semen. Assessing authority levied tax on the turnover of frozen semen treating it is an unclassified item. Dealer filed appeal, which was rejected. Second appeal filed by the dealer has been allowed and the turnover of frozen semen has been held non-taxable. Tribunal held that frozen semen was a dairy product. It has been also held that in the process of extraction of semen and its preservation in liquid nitrogen, no manufacturing is involved and, therefore, dealer was not the manufacturer and held not liable to tax. Heard learned counsel for the parties. Three questions are .....

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..... duct is not confined to milk products. He submitted that any product, which is obtained from animal by a person is dairy product. He submitted that since semen is obtained from bull, it is a dairy product. He further submitted that by no stretch of imagination the process of extraction of semen from bull and its preservation in liquid nitrogen to avoid its decay amounts to manufacture. He submitted that the semen which was in the original form remains the same at the time of its sale and no manufacturing activity is being carried out. In support of his contention he relied upon the decision of the apex court in the case of Delhi Cold Storage P. Ltd. v. Commissioner of Income-tax [1991] 191 ITR 656, in the case of Deputy Commissioner of Sale .....

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..... ration or growth. According to Webster's Comprehensive Dictionary, the word "product" means "anything produced or obtained as a result of some operation or work". I do not agree that frozen semen falls under dairy product for two reasons; firstly semen extracted from the bull through syringes, is not obtained as a result of any processing. Secondly, it is obtained at the place where bull is kept and not at a place where milk is kept and milk products like butter, cheese, etc., are made. To this extent, the view of the Tribunal cannot be sustained. However, I am of the view that extraction of semen and its preservation in liquid nitrogen to avoid its decay does not amount to manufacturing. Semen remains the same at .....

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