TaxTMI 
TaxTMI 
2026 (5) TMI 209
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....nly) and accordingly, it gave an order of purchase of Distillate Marine Oil for industrial use only in Vibrant Petrochem FZE (Free Zone Establishment) located at UAE (United Arab Emirates) and in furtherance thereof, 2 commercial invoices and bill of lading were raised. Accordingly, the same were imported to India and to be discharged to a Port situated at Pipavav, Gujarat. After customs clearance, Bill of Entry being BE No.5270780 dated 24.10.2025 was generated. 3. The petitioner imported Distillate Marine Oil (HSN 2710 1961), which was to be discharged at the Port Pipavav, Gujarat. After clearance of the product, a bill of entry No.5270780 dated 24.10.2025 was issued and the consignment was transferred into Customs Bonded Storage Tank for the purpose of investigation and a procedural test of the Distillate Marine Fuel samples were sent to Central Revenue Control Laboratory (CRCL), New Delhi for examination and accordingly, a test report dated 14.11.2025 was issued by CRCL, New Delhi. After the test report was issued, Directorate of Revenue Intelligence (DRI) opined that there was presence of diesel fraction, leading to the seizure of the fuel. 4. It appears that thereafter,....
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....ly placed reliance on the parameter of lubricity for denying the release of the Distillate Marine Fuel. In this context, he has referred to the parameters of Distillate Marine Fuels, and the characteristics of lubricity, more particularly DMX, which is to be required at 520 at maximum and the same parameter would only be applicable in case the sulfur content is below 500 mg/kg (0.050 mass percentage), whereas in the Distillate Marine Fuel imported by the petitioner, the sulfur content is below 1% and hence, the parameter of lubricity will not get attracted. 9. In reference to the execution of the end-use declaration by the petitioners, as suggested by the respondent authorities, he has submitted that the conditions mentioned in said declaration, more particularly in paragraph No. 3, cannot be imposed upon the petitioner since the Distillate Marine Fuel can also be utilized for other purposes, and hence, the petitioner cannot be compelled to execute the end-use declaration to use the Distillate Marine Fuel solely for the marine purposes. In this regard, he has pointed out the IS of petroleum products/fuels (Class F) specifications of marine fuels IS 16731:2019/ISO 8217:2017. It i....
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....late Marine Fuel specified under IS 16731:2019/ISO 8217:2017, and only the DMX grade prescribes a minimum flash point of 43°C and all other grades namely DMA, DFA, DMA, DMZ, DFZ, DMB, and DFB are expected to have a minimum flash point of 60°C as per the IS. 13. While referring to the test reports, it is contended that the reports of the CRCL, New Delhi and MRPL reveal that the sample meets with 18 out of 21 parameters of ADF defined under the IS 1460. It is submitted that even if it is assumed that the imported product is to be considered as Distillate Marine Fuel, as declared under CH 2710 1961, conforming to IS 16731/ ISO 8217, it could only be classified under the DMX grade and can be strictly used for marine purposes and marine vessels only. Reference is made to the Merchant Shipping notice No. 3 of 2014 dated 19.03.2014, and it is contended that registration of bunker supplier/product supplier is mandatory, and only the registered bunker suppliers can supply bunkers to ship in Indian Coastal Waters and any ship found to have received bunkers from an unregistered supplier, is liable to be detained by Flag State, or Port State Control Authorities. It is submitted that....
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.... ISO 4261 and hence, it is submitted that imported product is to be evaluated under ISO 4261 for industrial use only and not as Distillate Marine Fuel, and in case the petitioner wants to use it as a Distillate Marine Fuel, he has to tender the end-use certificate, as prescribed by the authorities. 16. While distinguishing the judgement dated 09.12.2025 passed in Special Civil Application No.12943 of 2025 and allied matters, it is submitted by the learned Additional Solicitor General of India that this Court was not apprised about the format or conditions of the end-use certificate and hence, though the Court has directed to release the distillate oil in those matters by directing the traders to file an enduse certificate before the Customs authority, the essential conditions forming part of end use agreement, were not pointed out, which is pointed out before this Court in the present case. It is thus, submitted that the distillate oil, which was ordered to be released on the end-use certificate tendered at the relevant time by those traders cannot be applied for getting provisional release of Distillate Marine Fuel. ANALYSIS AND CONCLUSION 17. Initially, the learned Advoc....
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....ons of marine fuels. It is not in dispute that the said standard defines 7 grades of Distillate Marine Fuels namely, DMX, DMA, DFA, DMZ, DFZ, DMB, and DFB, which have various parameters, including sulfur content, flash point, viscosity, density, cloud point, cold filter, plug-in point, and power point. Thus, it is the case of the petitioner that it is not required to give the end-use declaration, as suggested by the respondents (at page No. 103) and the petitioner cannot be compelled to use the Distillate Marine Fuel solely for use / sale of marine purposes, but for industrial purpose also. 20. The petitioner is also aggrieved for submitting the documents, which are mentioned in the end-use declaration. We may incorporate the end-use declaration (at annexure-1), which has been placed on record by the respondent authorities and is being insisted upon by them. The same is as under: "ANNEXURE-I (END USE DECLARATION) [For import of products under Customs Tariff Heading (CTH) 2710 1961 for FUELS (Class F) or MARINE FUELS conforming to 15 16731] (To be printed on Importers letter head) IE Code: _________ GSTIN: ___________ I/We ____________....
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....y for use/sale of marine purposes. By placing reliance on the scope of the IS, the petitioner has tried to carve out a case that the Distilled Marine Oil (for industrial purpose only) imported by the petitioner, can also be used for other static diesel engines or similar type. 22. We are not inclined to accept the submissions of the petitioner for putting the Distillate Marine Oil for any other purposes, except marine purposes only by reading the scope of the IS for the following reasons: (a) IS 16731/ISO 8217 are prescribed for petroleum products - fuels (Class F) of marine fuels. The introduction of the IS reads as under: "This document was prepared in cooperation with ship owners, ship operators, shipping associations, national standard bodies, classification societies, fuel testing services, engine designers, marine fuel suppliers, fuel additive suppliers and the petroleum industry", to meet with the requirements for marine fuels supplied on a world-wide basis for consumption on board ships." Thus, the introductory or general statement of the IS as incorporated hereinabove above indubitably discloses that "the IS was prepared in cooperation with sh....
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.... F) of marine fuels, emphatically establishes that Distillate Marine Fuel is used for Marine purposes only. By applying the doctrine of "Ejusdem generis", the expression used in the scope i.e. Clause-1 "of the same or similar type" as those used for marine purposes has to be read in context with the diesel engines or similar type used in ships or for marine purpose only. Hence, we reject the contention of the petitioner, that the Distillate Marine Oil can be used for industrial purpose also. END USE DECLARATION 24. The petitioner in the affidavit dated 16.03.2026 has made a categorical statement that he is ready and willing to tender end-use certificate before the Customs authority. 25. The End Use Declaration for distant marine fuel, CTH 2710 1961 has been prescribed by the Directorate General of Shipping, which is statutory maritime authority appointed by the Government of India under section 7(1) of the Merchant Shipping Act, 1958 (Now the Merchant Shipping Act, 2025) for exercising of discharging the powers, authority, or duties imposed upon the Directorate General discharging power, authority, purpose, accent, discharging the powers, authorities, or duties confirmed i....
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....r informed that the end use of the sample under reference may be ascertained." 27. Thus, this Court was conscious of the fact that Marine Distillate Oil having a prescribed parameter of cloud point is required to be used in ships operating in colder weather conditions, and the end use has to be ascertained. 28. As mentioned hereininabove, the Distillate Marine Oil under IS 16731:2019 comprises of 7 types of marine fuels. The IS 16731/8217 have seven grades of distillate fuels used in marine fuel i.e. DMX, DMA/DFA, DMZ/DFSZ, DMB, and DFV having flash point of DMX. As per the Test Reports, the flash point of the tested sample of the petitioner is reported as 50.9°C by CRCL Delhi report dated 14.11.2025 and 48°C by MRPL report dated 26.12.2025. Pertinently, amongst the seven grades of Distillate Marine Fuel specified under IS 16731:2019/ISO 8217:2017, only the DMX grade prescribes a minimum flash point of 43°C. All other grades, namely DMA, DFA, DMZ, DFZ, DMB, and DFB, are expected to have a minimum flash point of 60°C as per the standard. 29. It is not disputed by the petitioner that as for the DGFT Import Policy, the Distillate Marine Oil under CTH 2710 1961....