Propane-butane mixture classification and exemption scope depend on tariff predominance and prospective notification amendment

A propane-and-butane mixture with butane predominance up to 98% was treated as butane under Heading 2711 1300 on application of Interpretative Rule 3(b), rather than as LPG under Heading 2711 1900. For clearances before 02.05.2005, the mixture did not qualify for NIL duty under the then-existing exemption entries because only LPG was expressly covered. The later substitution of the notifications to add liquefied propane, liquefied butane and propane-butane mixtures operated prospectively from 02.05.2005, not retrospectively. Any ambiguity in the exemption wording was resolved against the assessee and in favour of the Revenue.

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Issues: Whether the imported liquefied petroleum gas butane mixture was classifiable under Heading 2711 1900 as LPG or under Heading 2711 1300 as propane and butane mixture, and whether the exemption benefit under the pre-02.05.2005 notifications was available.

Analysis: The product was found to be a mixture of propane and butane with butane predominating up to 98%, and it was also described in the import documents as LPG-butane. The later notifications that extended relief to liquefied propane, liquefied butane and mixtures showed that these goods were treated as distinct from LPG alone. For the period prior to 02.05.2005, the exemption entry did not expressly cover the imported mixture, and in exemption matters any ambiguity must be resolved strictly against the claimant and in favour of Revenue.

Conclusion: The goods were correctly classified under Heading 2711 1300, and the exemption benefit was not available for the relevant import period; the denial of refund was upheld.

Ratio Decidendi: Exemption notifications must be construed strictly, and where the wording does not expressly cover the claimed goods, the benefit cannot be extended on the basis of presumed equivalence or ambiguity.

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