2026 (3) TMI 769 - HC - Customs

Most Akin Test: combined laboratory testing across required parameters supports classification as ADF/HFHSD and upholds seizure.

Laboratory reports cumulatively covering the required 21 parameters were applied to determine classification; using the Supreme Court-endorsed 'most akin' ... Validity of Seizure of consignments of industrial oil - classifiable as Automotive Diesel Fuel (ADF) / High-Speed Diesel (HFHSD) - Most-akin test for tariff classification - legality of laboratory test reports covering prescribed IS parameters - permissibility of testing samples in multiple laboratories -environmental protection concern - preponderance of probability. Most-akin test for tariff classification - HELD THAT:- The Court applied the Supreme Court in the case of Gastrade International [2025 (4) TMI 23 - SUPREME COURT] 'most akin' principle and held that where laboratory reports unambiguously record that the sample is mainly composed of diesel fraction, is adulterated with lighter hydrocarbons, and is 'most akin' to HFHSD/ADF, the imported product must be classified accordingly. The Test Reports of CRCL, Visakhapatnam and MRPL together showed conformity with multiple stringent parameters of HFHSD/ADF (notwithstanding non-compliance on flash point), and CRCL expressly opined the sample is 'most akin to HFHSD / adulterated HFHSD'. On that basis the product declared as industrial oil was held to be ADF/HFHSD and therefore a restricted commodity not freely importable. [Paras 33, 35, 36, 48, 50] The goods are to be classified as ADF/HFHSD under the 'most akin' test and treated as restricted commodities. Validity of laboratory test reports covering prescribed IS parameters - HELD THAT:- The Court held that the CRCL and MRPL reports cumulatively tested the 21 parameters identified by the Supreme Court and that their findings cannot be discarded merely because different parameters were tested in different laboratories. The reports were not challenged on their substance by the petitioners, the sampling was not disputed, and CRCL had unequivocally recorded that the sample met most HFHSD/ADF characteristics while being adulterated. Consequently, the combined test results were found adequate to justify the Department's classification. [Paras 30, 31, 32, 36, 52] The combined laboratory reports covering the prescribed parameters are valid and sufficient to support the classification and seizure. Permissibility of testing samples in multiple laboratories - Whether sending samples to more than one laboratory for testing is impermissible in light of Gastrade International - HELD THAT: - Distinguishing Gastrade International, the Court held that the Supreme Court's directions do not preclude testing in more than one laboratory; what is essential is that the parameters prescribed under the relevant Indian Standards be tested. Where one laboratory lacks capacity to test all parameters, testing in multiple accredited laboratories that together cover the required parameters is permissible and their results cannot be rejected solely because different laboratories performed different tests. [Paras 26, 30, 51, 52] Testing of samples in multiple laboratories is permissible provided the prescribed parameters are tested and the combined results conform to the Supreme Court's directions. Final Conclusion: The writ petitions are dismissed: the combined CRCL and MRPL test reports satisfy the requirement of testing the prescribed parameters and, applying the 'most akin' test, the imported commodity is classified as ADF/HFHSD (a restricted product), and the seizure is justified; testing in multiple laboratories was held permissible where the requisite parameters are covered. Issues: (i) Whether the seized consignments of industrial oil are correctly classifiable as Automotive Diesel Fuel (ADF) / High-Speed Diesel (HFHSD) and whether the seizures under Section 110 of the Customs Act, 1962 are justified; (ii) Whether samples tested in more than one laboratory (CRCL and MRPL) and combined test results complying with the Supreme Court's directions (testing of 21 parameters) can be relied upon for classification and seizure.Issue (i): Whether the seized consignments are ADF/HFHSD and whether seizure is justified.Analysis: The laboratory reports collectively cover the 21 parameters; CRCL recorded the sample as mainly diesel fraction (95-98%), opined adulteration with lighter hydrocarbons and that the sample is most akin to HFHSD/adulterated HFHSD; MRPL testing shows conformity with multiple parameters of IS 1460:2025 and IS 16861:2018 but failure on flash point and some other parameters. The definition of adulteration under Section 2(a) of the Malpractices Order, 2005 applies where foreign substances cause non-conformity with BIS specifications. The Supreme Court's guidance in Gastrade International requires testing of all 21 parameters, attention to flash point, and application of the 'most akin' test for classification; those principles are applied to the combined reports here.Conclusion: The consignments are held to be most akin to ADF/HFHSD (adulterated HFHSD) and the seizures under Section 110 of the Customs Act, 1962 are justified; conclusion is against the importers.Issue (ii): Whether tests from multiple laboratories can be relied upon and whether conducting tests in more than one laboratory vitiates the results.Analysis: The testing in two laboratories cumulatively covers the 21 parameters required by the Supreme Court; samples were drawn properly and testing was conducted in presence of representatives; the fact that different parameters were tested in different competent laboratories does not invalidate results where combined testing conforms to the Supreme Court's directions and the laboratories' reports are not challenged on competence or mala fides.Conclusion: Tests conducted across CRCL and MRPL are permissible and may be relied upon for classification; reliance on combined laboratory reports is in favour of the respondents.Final Conclusion: Applying the legal requirement to test all 21 parameters and the 'most akin' test to the combined laboratory findings, the classification of the imported product as ADF/HFHSD is sustainable and the seizure is not to be set aside; the writ petitions are dismissed.Ratio Decidendi: Where technical classification of imported petroleum products with confiscatory consequences is in issue, combined laboratory testing covering all 21 parameters required by the relevant IS specifications is mandatory and the goods must be classified by applying the 'most akin' test; unambiguous laboratory opinion that the sample is most akin to a restricted petroleum product and evidence of adulteration justify seizure under the Customs Act.