In Advance Ruling No. UP ADRG - 21/2023 -AAR- AAR (UP) rules mixing of scent in raw unmanufactured tobacco results in 'manufactured chewing tobacco', classifiable under CTH 24039910
Members Rajendra Kumar (Central Tax) & Harilal Prajapati (State Tax) [02-03-2023]

Read Order: In Re: M/s Pandey Traders

Chahat Varma

New Delhi, June 13, 2023: The Uttar Pradesh bench of the Authority for Advance Rulings has ruled that the mixing of scent (mixture of various perfumes and not jarda scent) in raw unmanufactured tobacco dust by M/s. Pandey Traders (applicant), was a cumulative process of manufacturing and resulted in a different and irreversible good, i.e., ‘manufactured chewing tobacco’ and was classifiable under the specific heading under CTH 24039910.

Briefly stated, the applicant was engaged in mixing of scent in the raw/unmanufactured tobacco dust, procured from various traders. The applicant sought clarification on whether mixing of scent (mixture of various perfumes) in raw unmanufactured tobacco would change the character of unmanufactured tobacco to manufactured tobacco. They also inquired whether the processing of unmanufactured tobacco dust by adding the scent of various perfumes would have the same effect.

Based on the explanation provided by the ICAR-CTRI and the Explanatory General Notes to Chapter 24, the Authority observed that only tobacco cured at the farm level before supply to the market was classified as ‘unmanufactured tobacco’. The process of perfuming by mixing scent, as claimed by the applicant, was not covered under this classification. The Explanatory General Notes specified that only natural fermentation was included. Therefore, the product of the applicant did not fall under CTH 24012090.

The Authority determined that the process undertaken by the applicant was not comparable to the process of winnowing, crushing, and separating through sieving, where the better part was used for chewing tobacco as ‘unmanufactured tobacco for chewing’. Instead, the process undertaken by the applicant was similar to the manufacturing process of ‘Chewing tobacco’, as acknowledged by the ICAR-CTRI.

The Authority held, “it is evident that the raw material undergoes a set of processes and emerges as a distinct product which makes it marketable/consumable for the chewing needs. Therefore, the product supplied by the applicant is ‘Manufactured Tobacco product for Chewing’.”