Spinner Harbhajan Singh has been cleared of racial abuse after the charges against him were dropped on Tuesday.
Harbhajan was originally suspended for three matches by match referee Mike Procter after being found guilty of racially abusing Australian all-rounder Andrew Symonds during the second Test.
The more serious charge of racial abuse had been downgraded to a lesser charge of using abusive language at Tuesday's appeal hearing in Adelaide and Harbhajan was fined 50 per cent of his match fees.
"The racial abuse charges have been dropped," BCCI board secretary Niranjan Shah said.
"It is finished. The punishment is only for using obscene language."
Harbhajan's appeal was heard by ICC-appointed Appeals Commissioner Justin John Hansen for nearly five hours.
The New Zealand High Court Judge's task was made easier by behind-the-scene efforts by the Australian cricket board and the BCCI to find a compromise in the shape of downgrading the charge against Harbhajan from racial abuse (section 3.3 of ICC Code of Conduct) to that of using language which is offensive and of seriously insulting nature (section 2.8).
This compromise was reportedly presented to Hansen at the hearing.
A delighted BCCI, which had raised the stakes by announcing on Monday that the Indian team would be called back home if the racial charge was not withdrawn, promptly welcomed the verdict and declared that the tour would go ahead.
"The BCCI welcomes the Commissioner's decision and the Indian team's tour will continue," BCCI vice president Rajiv Shukla said in Delhi.
"We accept the Commissioner's verdict and we are happy that the racial charge has been dropped. We hope that the series will now continue in a cordial atmosphere," Shukla said.
BCCI President Sharad Pawar too was elated with the outcome and he thanked senior counsel VR Manohar for successfully defending Harbhajan.
"We are happy. I thank Mr Manohar. He has done well. He did not even charge us any fee and worked for the player's cause. Now Harbhajan will play in forthcoming matches," Pawar said.
"From the beginning, we have been consistently taking the stance that it's practically impossible for us to accept racist charge against an Indian player. I'm happy the Judge accepted our argument," he said.
Manohar, father of BCCI president-elect Shashank Manohar, said it was just a matter of abusing with no racial undertone about it.
"Racial abuse is a big crime and though he (Harbhajan) has admitted saying something, it was not a racial abuse. He had not hurled the word monkey on Symonds," Manohar said.
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The Indian team, which was asked to stay put in Adelaide till the entire issue was sorted out, has now been asked to proceed to Melbourne for the Twenty20 tie against Australia scheduled to be held on Friday.
"The team will now move to Melbourne tomorrow," Shah said.
Hansen will now submit his report to the International Cricket Council which is expected to come out with a statement later in the day.
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