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Chewing tobacco’ with the brand name ‘Kavi cut tobacco’ is classifiable under CTH 2403 9910 and rate of compensation cess will be 160%

Classification of Goods The applicant has sought advance ruling on the

“Classification of the product intended for manufacture and applicable rate of Compensation Cess.”

the product in question is ‘Chewing tobacco’.
The product in question is a processed one in as much as the same is cured in jaggery water, undergoes the process of stalking and semi-drying, then cut into small pieces in minced form which is stored in a separate area for a few hours/days on which some natural/agricultural preservatives for maintaining the product in wet form is applied, packed in pouches/pottlams for supply. Also, the test reports of the chewing tobacco- before processing and after processing furnished by the applicant shows that the chemical parameters Moisture, total ash and acid insoluble ash are different in % content, indicating the product has been subjected to processing. Therefore, the product of the applicant does not merit classification as “unmanufactured tobacco” under CTH 2401 but rightly classifiable under CTH 2403 9910 as “Chewing tobacco”.

The nest question raised is on the rate of Compensation cess applicable to the Product. The rate of Compensation cess is provided vide Notification no. 01/2017-Compensation Cess/rate) dated 28.06.2017 and Sl.No. 26 provides the Compensation Cess Rate as 160% for the product “chewing tobacco” which is supplied “without lime tube”.—Kavi Cut Tobacco (Arumugam), In Re… [2020] 23 TAXLOK.COM 021 (AAR-Tamil Nadu)