Facts of the Case

The appellant, M/s.S.M.Mohammed Ibrahim & Co. Pvt. Ltd., operating as Kalamani Tobacco Factory, Pudukkottai, Tiruvarur, had earlier filed W.P.(MD)No.12813 of 2020 before the Madurai Bench of the Madras High Court, seeking a direction against the Additional Commissioner, Office of the Assistant Commissioner of GST & Central Excise, Tiruchirappalli, to reclassify and declare its tobacco products as unmanufactured tobacco under Heading 2401 20 90 of the Customs Tariff. The learned Single Judge's order in that writ petition went against the appellant, prompting the present writ appeal under Clause 15 of the Letters Patent, seeking to set aside the order dated 24.10.2024 and to have the products reclassified under heading 2401 20 90, having regard to the nature and process adopted, the relevant HSN explanatory notes, and judicial pronouncements on the point.

Issues Involved

  1. Whether the appellant's tobacco product, processed in the manner disclosed, was correctly classifiable as unmanufactured tobacco under CETH 2401 20 90 for the purpose of the applicable tax/duty rate.

Petitioner's Arguments

  • Having regard to the nature and process adopted in preparing its product, the relevant HSN explanatory notes, and prior judicial pronouncements, the appellant's product was correctly classifiable as unmanufactured tobacco under CETH 2401 20 90, consistent with the classification recognised in the earlier Pachiappa Chettiar case.

Respondent's Arguments

  • The GST & Central Excise authorities had proceeded on the basis that the appellant's product did not qualify for classification under CETH 2401 20 90 in the manner claimed, a position that had earlier found favour with the learned Single Judge.

Court Order / Findings

  • The Court held that, in view of the order made in the companion appeal W.A.(MD)No.746 of 2025, so long as the appellant confines its activity to what was approved in the Pachiappa Chettiar case, its product would fall under CETH 2401 20 90.
  • Applying the reasoning recorded in that companion matter, the Court set aside both the order impugned in the writ petition and the order of the learned Single Judge under appeal.
  • Both the writ petition and the writ appeal were allowed, with the connected miscellaneous petition closed.

Important Clarification

Classification of a tobacco product as "unmanufactured tobacco" under CETH 2401 20 90, for GST/Central Excise purposes, turns on whether the processor's activity stays within the scope of processing previously judicially approved (here, in the Pachiappa Chettiar line of cases); a processor confining itself to that approved activity is entitled to the corresponding classification and the tax treatment that follows from it.

Sections Involved

  • Customs Tariff Act, 1975 – Heading 2401 20 90 – the tariff entry for unmanufactured tobacco, determinative of the applicable GST/compensation cess rate on the appellant's product.
  • Clause 15 of the Letters Patent – the provision under which the intra-court writ appeal was filed.

Decision – In Favour of

The decision was in favour of the Assessee, with both the writ petition and writ appeal allowed and the product held classifiable under CETH 2401 20 90, subject to the appellant confining its activity to the approved scope.

Case Details

  • Court: Madurai Bench of the Madras High Court
  • Case Number: W.A.(MD)No.779 of 2025 (with C.M.P.(MD)No.5257 of 2025), arising from W.P.(MD)No.12813 of 2020
  • Coram: Hon'ble Mr. Justice G.R. Swaminathan and Hon'ble Mr. Justice K. Rajasekar
  • Date of Order: Reserved on 01.08.2025; Pronounced on 17.04.2026

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