Manufactured tobacco classification prevails for gudakhu where tobacco content is substantial, excluding the residuary tariff entry.

Gudakhu composed substantially of tobacco, together with molasses, lime, clay and other ingredients, was treated as manufactured tobacco for Central Excise classification. Applying earlier Tribunal decisions and the prior High Court view, the specific tariff entry for manufactured tobacco prevailed and the residuary entry was inapplicable. On that classification, the assessee's claim for refund with consequential relief followed, and the impugned orders were set aside.

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Issues: Whether gudakhu was classifiable under Item 4 II of the Central Excise Tariff Schedule as manufactured tobacco, or under the residuary Item 68, and whether the appellants were entitled to refund of duty with consequential relief.

Analysis: The product was examined in the light of earlier Tribunal decisions and the earlier High Court view on gudakhu, which treated the article as falling within the concept of manufactured tobacco. The composition of the product, including substantial tobacco content along with molasses, lime, clay and other ingredients, was held not to take it out of Item 4. On that basis, the residuary Item 68 was held inapplicable.

Conclusion: Gudakhu was held classifiable under Item 4 II and not under Item 68, and the appellants were entitled to refund with consequential relief.

Final Conclusion: The appeals succeeded and the impugned orders were set aside, with consequential monetary relief to follow.

Ratio Decidendi: Where gudakhu is composed substantially of tobacco and answers the description of manufactured tobacco, it falls under the specific tariff entry for tobacco and cannot be relegated to the residuary entry.

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