Tension had gripped Mohad town, about 23 kms from the district headquarters, on Sunday night after some persons shouted slogans in favour of Pakistan and celebrated its cricket team's win by bursting firecrackers.
According to police, the suspects had also raised anti- India slogans.
"We have dropped the sedition charge under section 124-A of the Indian Penal Code and have invoked IPC section 153 (a) instead against them for disturbing communal harmony," Burhanpur Superintendent of Police RRS Parihar told PTI on phone today.
On Monday, the police had arrested 15 persons, aged between 19 and 35, and had booked them for sedition and criminal conspiracy (IPC section 120-B).
They were arrested on Monday and the next day produced in a court which sent them to jail.
The accused are lodged at a jail in Khandwa, the neigbouring district of Burhanpur.