Case Law Details
In re M/s Prabhat Gudakhu factory (GST AAR ODISHA)
In the scheme of classification of tobacco product for the purpose of assigning HSN Code under tariff sub-heading 2403 11, only water pipe tobacco intended for smoking in a water pipe are included and not any other form of tobacco. As explained above, the applicant is engaged in the manufacture of gudakhu in paste form only which is used only as a tooth paste and never used for smoking in a water pipe. As a result, it can never be classified under tariff sub-heading 2403 11.
As per the scheme of classification, tariff sub-heading 2403 99 is a residual sub-heading under which all forms of chewing tobacco and other forms of tobacco not specified under other sub-headings of Chapter heading 2403 are classified. The said sub-heading is not just confined to chewing tobacco only such as khaini, gutkha and zarda etc. it also includes cut tobacco, tobacco extracts and snuffs which do not belong to the family of chewing tobacco. The sub-heading which reads as ‘2403 99 – other’ bears the essential character of a residual entry so as to classify all other forms of tobacco not specified in the preceding sub-headings. No doubt it classifies certain known chewing tobacco products under the sub-heading but, it also includes cut tobacco, tobacco extracts, snuff and other. The entry ‘other’ appearing against 2403 99 90 is intended to cover all other tobacco products not specified under the preceding sub-headings under chapter 24 and also not specified under the tariff items specified under sub-heading 2403 99. Thus, the contention of the applicant that a tariff item can be classified under the sub-heading 2403 99 only if the said item belongs to the family of chewing tobacco like ‘gutkha’, zarda or khaini is totally misplaced in as much as the said sub-heading also specifies other tobacco products such as cut tobacco, tobacco extracts and snuff etc. Therefore, the general rule of classification as relied upon by the applicant cannot be applied in the case of gudakhu as manufactured and sold by the applicant simply because it does not belong to the family of chewing tobacco such as zarda and gutkha.
Gudakhu as manufactured by the applicant is certainly not classified under any specific tariff item in any of the sub-headings under the Heading 24 03. Accordingly, it can be classified and rightly so under the residual tariff item ‘2403 99 90 – other’ of the said Chapter Heading because of its composition, character and use.
Also Read AAAR Order- Gudakhu manufactured for use as tooth paste classifiable under tariff item 2403 9990
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