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2016 (10) TMI 15 - ALLAHABAD HIGH COURT

2016 (10) TMI 15 - ALLAHABAD HIGH COURT - TMI - Classification of goods - "Enzymes" - classified under the entry of the chemical under Notification No.1084 dated 25.02.2003, taxable @ 4% - to be treated as an unclassified item liable to tax @ 10% - enzyme treated as chemical or protein? - Held that - An enzyme is in the nature of chemical substance, which acts upon a protein and helps in the process of absorption of food by converting the sugars and starch into energy for the body. - In comm .....

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dated 25.02.2003 to be chargeable to tax as chemical @ 4% - revision dismissed - decided against Revenue. - Sales/Trade Tax Revision No. 82 of 2015 - Dated:- 27-9-2016 - Hon'ble Bharati Sapru, J. For the Applicant : S.C. For Opposite Party : Nishant Mishra ORDER Heard Sri B.K. Pandey and Sri Nimai Das, learned Standing Counsel for the State and Sri S.D.Singh, learned Senior Counsel assisted by Sri Nishant Mishra, learned Counsel for the assessee. This revision has been filed by the State aga .....

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eferred to in this revision is quoted here-under:- "Whether under the facts and circumstances of the case, the Commercial Tax Tribunal was legally justified in holding that the enzyme falls under Notification no.1084 dated 25.2.2003 hence liable to tax @ 4% and not as unclassified item liable to tax @ 10% as determined by the assessing authority?" The entry, which is sought to be examined is here-under:- Sl.No Description of Goods Point of Tax Rate of tax percentage (i) Chemicals of al .....

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nsel has sought to argue that an enzyme is in the nature of protein and, therefore, it cannot be classified under the entry of chemicals of all kinds but it should be treated as an unclassified item and should be charged to tax @10%. Learned Counsel for the assessee argues to the contrary. He relies on a decision of Hon'ble Apex Court in the case of Mauri Yeast India Pvt. Ltd. vs. State of U.P. reported in 2008 (225) E.L.T. 321 (S.C.) wherein the Hon'ble Apex Court while examining the si .....

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Technician of repute of U.S. Wheat Associates, New Delhi has done an extensive research on yeast and its functions. It is profitable to refer to the following passage from his writing:- "Yeast is unicellular microscopic plant. Its structure consists of cell wall, protoplasm, and vacuole. It requires food (in the form of simple sugar), moisture and temperature climate for its growth and reproduction. Yeast multiplies by budding. When yeast cell is placed in a liquid medium at optimum tempera .....

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inging about or speeding up certain chemical changes. For example, food is digested through the action of certain enzymes, starch is converted into sugar by the action of enzymes. Although an enzyme does affect chemical changes, a very small quantity of enzyme is capable of converting a very large quantity of substance from one form to another form, but enzyme itself is neither destroyed nor changed. Hence, enzymes are known as catalytic agents." It is on this paragraph of the aforesaid jud .....

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f a large class of complex pertinacious substances of high molecular weight formed in and produced by living matter which are responsible for promoting the chemical reactions upon which life depends (e.g. digestion, respiration, reproduction). They accomplish this by acting like catalysts while themselves undergoing little or no change. Their action is often specific and reversible and may be dependent upon temperature. PH, and the presence of various coenzymes and activators (metallic salts, vi .....

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apparently not by animals. Amino acid as:- one of a class of organic acids having amino (NH2-) groups in place of hydrogen atoms, in the hydrocarbon groups of fatty acids or other organic acids. They occur in all plant and animal tissues and are considered the basic units of proteins, from which they may be obtained by hydrolysis. Catalyst as:- Catalyst (kaet'list) n. a substance that alters the rate of a chemical reaction and is itself unchanged by the process. Catalysts usually increase t .....

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it may, therefore, be concluded that enzymes are in the nature of a chemical. Learned Counsel for the assessee has placed reliance on the decision of Hon'ble Apex Court in the case of Mauri (supra) and has sought to argue that the burden of proof to establish his case lay squarely on the department, but the department did not produce any evidence or lead any evidence to show why enzymes would not be included in the classification of chemicals, which was all encompassing and would include en .....

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milar article was being classified and was included as a chemical under similar entry and lastly learned counsel for the assessee argues that the argument of the learned Standing Counsel that it should be treated as an unclassified item in the residuary clause is unacceptable because that could only happen in a case where specially when the product could not be covered under a specific entry. In this case he has argued that although the learned Standing Counsel has sought to cover enzymes as pro .....

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medical dictionary the Enzyme is defined as:- "ENZYME is the name applied to a chemical ferment produced by living cells. The first enzyme was obtained in a reasonably pury state in 1926 and shown to be a protein. Since then several hundred enzymes have been obtained in pure crystalline form. Many more have been purified to less exacting standards and all have been proved to be proteins. They are present in the digestive fluids and in many of the tissues, and are capable of producing in sm .....

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es coagulation. PROTEIN as :- PROTEIN is the term applied to members of a group of non-crystallizable nitrogenous substances widely distributed in the animal and vegetable kingdoms and forming the characteristic materials of their tissues and fluids. They are essentially combinations of amino acids." Thus, the reading of two definitions shows that while proteins are in the nature of food, an enzyme is not a protein but it is only chemical substance of fluid released in the body by the proce .....

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