Tariff classification of gudakhu as manufactured tobacco rejected residuary treatment where the product retained tobacco character.

Gudakhu retained the essential character of tobacco and was classifiable under the specific entry for manufactured tobacco rather than the residuary entry. The Tribunal relied on the Orissa High Court's earlier view that gudakhu is akin to hookah tobacco and falls within the meaning of manufactured tobacco, and it also noted the exemption notification referring to gudaku in granules as consistent with treatment under the tobacco entry. In the absence of any contrary decision or sufficient basis to treat the product as miscellaneous goods, classification under the residuary item was rejected and the tobacco entry was applied.

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Issues: Whether gudakhu manufactured by the appellants was classifiable as manufactured tobacco under Item 4 of the Central Excise Tariff Schedule, or liable to be assessed under Item 68 as residuary goods.

Analysis: The product had already been considered in the appellants' own case by the Orissa High Court, which had examined the constituents of gudakhu and held that it was akin to hookah tobacco and within the meaning of manufactured tobacco. The Tribunal treated that reasoning as applicable to the present dispute in the absence of any contrary decision. It also noted the exemption notification issued under Rule 8(1), which specifically referred to gudaku in granules and indicated that gudakhu was being treated as falling within the tobacco entry. The materials before the Tribunal showed that the product retained the essential character of tobacco, and there was no sufficient basis to treat it as a miscellaneous product under Item 68.

Conclusion: Gudakhu was held to fall under Item 4 as manufactured tobacco and not under Item 68. The impugned order was set aside and the appeal was allowed, with consequential relief.

Ratio Decidendi: Where a product retains the essential character of tobacco and is covered by the specific tariff entry for manufactured tobacco, it cannot be classified under the residuary entry.

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