AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (5) TMI 1534
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....eated as a Petroleum Oil and is to merit classification under Customs Tariff Heading 2710.00 (hereinafter referred to as 'CTH 2710.00') and Central Excise Tariff Heading 2710.12 (hereinafter referred to as 'CETH 2710.12') as contended by the Appellant-Revenue, or as a Pure Hydrocarbon existing as a Separate Chemical Compound under Customs Tariff Heading 2901.10 (hereinafter referred to as 'CTH 2901.10') and Central Excise Tariff Heading 2901.90 (hereinafter referred to as 'CETH 2901.90') as claimed by the Respondent - Assessee. 2. At the outset, we deem it pertinent to clarify that the imported products are "Exxsol Hexane RD/ Hydrosol n-Hexane" which also bear the common chemical nomenclature of "n-Hexane" or "Normal Hexane". Henceforth, the imported product shall be referred to as "n - Hexane" for convenience. I. FACTUAL MATRIX AS IN THE CASE OF COMMISSIONER OF CUSTOMS, KANDLA v. M/S RELIANCE INDUSTRIES LTD. 3. The Respondent-Assessee filed Bill of Entry claiming clearance of n-Hexane under Customs Tariff Heading 2901.10 ('CTH 2901.10') and Central Excise Tariff Heading 2901.90 ('CETH 2901.90') by self-classifying the same as a Saturated Acyclic Hydrocarbon existing as a ....
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....ff Heading 2710.00 and Central Excise Tariff Heading 2710.12. This conclusion was primarily based on the chemical test results delivered by SGS Redwood Services, which indicated that the flash point of n-Hexane is less than 25°C and its distillation range lies between 64°C and 70°C. Consequently, it was held that the imported substance is not a pure compound but a mixture of various hydrocarbons, and is therefore appropriately classifiable under Chapter 27. 7. Finally, the Adjudicating Authority came to a finding that since the flash point of imported material was less than 25°C, it is a Motor Spirit falling under CTH 2710.00 and CETH 2710.12 under the broad heading of Chapter 27. In view of the foregoing reasoning, the Adjudicating Authority rejected the claims of the Respondent-Assessee and ruled that the imported substance was liable to be classified under CTH 2710.00 and CETH 2710.12. 8. On being aggrieved by the said order passed by the Adjudicating Authority, the Respondent-Assessee preferred an Order-in-Appeal before the Office of the Commissioner. III. FINDINGS OF THE COMMISSIONER IN ORDER-IN-APPEAL PREFERRED BY THE RESPONDENT-ASSESSEE 9. The Com....
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....l questions inter alia was decided by the Commissioner of Appeals by placing emphasis on the Foreign Trade Policy regarding the classification of any item in the Indian Trade Classification based on Harmonized System [hereinafter referred to as 'ITC (HS)'], more particularly para 2.3 which specifically provided that the any doubt in respect of classification of any item shall be referred to the Directorate General of Foreign Trade (hereinafter referred to as 'DGFT') and the decision of the DGFT shall be final. In pursuance to doubts raised, the DGFT had clarified that the classification of Hexane shall be under Chapter 29 of the Customs Tariff vide Policy Circular dated 14.07.2004. 15. The SGS Report stated that the Distillation Range is at 67.2°C and that as per the Kirk-Othmer Encyclopedia, wherein the chemical characteristics of Hexane in Table 10 categorically provides that the Distillation Range is 68.3°C and the Flash Point at -23°C which is less than 25°C. On comparison between the two, there appears not much difference in the composition of the product. Pure hexane, being derived from the method of fractional distillation of crude petroleum oil and is not....
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....ed. The SGS Chemical Test Report of the imported goods recorded that the imported good is a "mixture of saturated hydrocarbons in the form of clear colourless liquid flashing below 25°C and having boiling point between 66°C to 69°C". Hence, the Learned ASG submitted that factually, the nature of the product was that of an isomer with impurity. 23. On the legal aspects, the Learned ASG submitted that the main point for consideration is that the product imported by the Respondent-Assessee is excluded from Chapter 29 of Customs Tariff Act. He refuted the reliance of the CESTAT on CCE v. Woodcrafts Products Limited (supra) by contending and submitting that the Tariff Act is dependent on HSN Notes only to the extent of a dispute and if warranted so. However, if the Tariff Act is explicit on the classification of a product, HSN Notes need not be employed to determine the heading under which the imported product ought to be placed. 24. Thus, it was submitted that in the instant case, once the Tariff Act was clear on the classification of the imported product under Chapter 27, the CESTAT erred in placing reliance on HSN Notes and the Explanation appended. As per Chapter n....
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....otice that any impurity has been deliberately added during the manufacturing process or deliberately left behind or in any other manner making it a mixture. 30. In addition, the Learned Senior Counsel also submitted that the imported Hexane in the commercially pure form has 63.93% of n-Hexane and the remaining are other components correctly classified under unconverted starting materials which are not deliberately added to the imported product. Thus, the thrust of the argument of Learned Senior Counsel was the presence of impurities did not change the composition of the imported product as the major component of the compound, i.e., n-Hexane remained at 63.93%. 31. With regard to the HSN Explanatory Note, the Learned Senior Counsel submitted that the classification of Hexane under CTH 2901.10 and CETH 2901.90 is also supported by Policy Circular No.40 (RE-2003)/2002-2007 dated 14.7.2004 issued by the DGFT wherein it is clearly mentioned that the import of Hexane will fall under Chapter 29. 32. It was contended and submitted that for a compound to fall under Chapter 27, more particularly CTH 2710.00 and CETH 2710.12, it must be a Motor Spirit and must satisfy two conditions,....
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....eneric term for a hydrocarbon that consists of six Carbon atoms and fourteen Hydrogen atoms. n-Hexane, covered under the umbrella of Hexane, is one such saturated hydrocarbon bearing Chemical Formula C6H14, most commonly existing in a straight chain structure, represented by a definitive structural diagram as indicated below. n-Hexane is a compound that exists in pure form. The following is the 3-Dimension structural representation of n-Hexane [Hexane | C6H14 | CID 8058 - PubChem - NIH]. 38. As seen from the pictorial representation, the compound is linear, acyclic, has 6 carbon atoms (represented by grey balls) balanced by Hydrogen bonds (white sticks attached the grey ball). Moving on to the concept of n-Hexane being an isomer, according to International Union of Pure and Applied Chemistry (IUPAC), an isomer is "One of several species (or molecular entities) that have the same atomic composition (molecular formula) but different line formulae or different stereochemical formulae and hence different physical and/or chemical properties". This means that the number of the carbon and hydrogen atoms remains the same but the arrangement of the same differs, giving each separate comp....
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.... classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classification to deny it the parentage and consign it to an orphanage of the residuary clause." 42. Most recently, this court in Gastrade International v. Commissioner of Customs (2025) 8 SCC 342 at para 45 observes: "There cannot be any dispute to the proposition of law as noted by the High Court that the burden of proof as regards the classification of any goods of importation is upon the Revenue/Customs authority and the standard of proof in proceedings under the Tariff Act is not "beyond reasonable doubt". However, whether "preponderance of probability" can be the appropriate test for classification under the Customs Act would be required to be examined in the light of the "General Rules for the interpretation of this Schedule" as provided in the First Schedule - Import Tariff in Part 2 of the Tariff Act (hereinafter referred to as the "Rules")" 43. Once we have established that the burden of proof is to be discharged by the Appellant-Revenue and that the test is of preponderance of probability, we now advert to the next limb of arguments raised by the parties, ....
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.... rule of specific over general has gained judicial stamp. 47. Primarily, the controversy involved in the present matter is whether n-Hexane is to be classified under Chapter 27 or under Chapter 29 which attracted the contours of Rule 3(a) of the General Rules of Interpretation which specifically states that the heading which provides for the most specific description shall be preferred to headings providing a more general description. The Rule makes it clear that if any good is classifiable under two headings, the one that is most specific shall be preferred over the one which is general. For applying the said Rule, we deem it appropriate to critically examine Chapter 27 as well as Chapter 29 of the HSN Explanatory Notes in comparison to that of the Customs Tariff and Central Excise Tariff Headings. 48. The contention of the Appellant-Revenue that since the boiling point of the imported good is between 63 - 70°C and since the flash point is below 25°C, it must be classified as a Petroleum oil to be used in spark ignition engine under Chapter 27 is vehemently rebutted by the Respondent-Assessee by categorically referring to the point that Hexane is a separate chemicall....
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....fied in heading No. 27.11; (b) Medicaments of heading No. 30.03 or 30.04; or (c) Mixed unsaturated hydrocarbons of heading No. 33.01, 33.02 or 38.05. References in heading No. 27.10 to "petroleum oils and oils obtained from bituminous minerals include not only petroleum oils and oils obtained from bituminous minerals but also similar oils, as well as those consisting mainly of mixed unsaturated hydrocarbons, obtained by any process, provided that the weight of the non-aromatic constituents exceeds that of the aromatic constituents. : : : GENERAL The Chapter covers, covers, in general, coal and other natural mineral fuels, petroleum oils and oils obtained from bituminous minerals, their distillation products, and products of a similar kind obtained by any other process. It also covers mineral waxes and natural bituminous substances. Goods of this Chapter may be crude or refined; however, with the exception of methane and propane, when they are separate chemically defined organic compounds in the pure or commercially pure state, they are to be classified in Chapter 29. 29. For certain of these compounds (e.g., ethane, benzene, phenol, pyridine) there are....
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....exceeds that of the aromatic constituents. 27.10 2710.00 Petroleum oils and oils obtained from bituminous minerals, other than crude; Preparations not else-where specified or included, containing by weight 70% or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations Mineral Fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes. Notes: This Chapter does not cover: Separately chemically defined organic compounds, other than pure methane and propane which are to be classified in heading No. 21.11 Medicaments of Chapter 30 Mixed Unsaturated Hydrocarbons of Chapter 33 to 38 References in heading No,. 27.10 to 'Petroleum oils and oils obtained from bituminous minerals' include not only petroleum oils and oils obtained from bituminous minerals but also similar oils, as well as those consisting mainly of unsaturated hydrocarbons, obtained by any process, provided that the weight of the non-aromatic constituents exceeds that of the aromatic constituents. 4.'Flash Point' shall be determined in accordance with the tests prescribed in the rules made in the P....
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....ich, with The separate chemically defined compounds of this Chapter may contain impurities regard to sugars, restricts the scope of the heading to chemically pure sugars. The term "impurities" applies exclusively to substances whose presence in the single chemical compound results solely and and directly from the manufacturing process (including purification). These substances may result from any of the factors involved in the process and are principally the following: (a) Unconverted starting materials. (b) Impurities present in the starting materials. (c) Reagents used in the manufacturing process (including purification). (d) By-products. It should be noted, however, that such substances are not in all cases regarded as" impurities" permitted under Note 1 (a). When such substances are deliberately left in the product with a view to rendering it particularly suitable for specific use rather than for general use, they are not regarded as permissible impurities. For example, a product consisting of methyl acetate with methanol deliberately left in with a view to improving its suitability as a solvent is excluded (heading 38.14). For certain....
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....ITRATED OR NITROSATED DERIVATIVES 29.01 - ACYCLIC HYDROCARBONS. 2901.10 - Saturated - Unsaturated : 2901.21 -- Ethylene 2901.22 -- Propene (propylene) 2901.23 -- Butene (butylene) and isomers thereof 2901.24 -- Buta-1,3-diene and isoprene 2901.29 -- Other Acyclic hydrocarbons are compounds containing only carbon and hydrogen which have no rings in their structure. They can be classified in two categories : (A) Saturated acyclic hydrocarbons. (B) Unsaturated acyclic hydrocarbons. (A) SATURATED ACYCLIC HYDROCARBONS These form a homologous series which may be represented by the general formula (CₙH₂ₙ₊₂). They occur abundantly in nature and are the main components of petroleum oils. The basic hydrocarbon is methane(CH₄), with one atom of carbon. Methane and also propane (C₃H₈) with three atoms of carbon are, however, classified in heading 27.11 even if they are pure. The saturated acyclic hydrocarbons of this heading include: (1) Ethane (C₂H₆) with two atoms of carbon. ....
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....d its physical and chemical properties, one will be compelled to accept and admit that the classification ought to be done under Chapter 27 but we are inclined to critically examine Chapter 29. 56. For a product to fall under Chapter 27, more particularly under the CETH 2710.12 as a Motor Spirit, the Supplementary notes to Chapter 27 provide that a Motor Spirit is "any hydrocarbon oil (excluding crude mineral oil) which has its flashpoint below 25°C and which either by itself or in admixture with any other substance, is suitable for use as fuel in spark ignition engines". Hence, for a product to be classified as a Motor Spirit, it ought to fulfil 3 conditions, viz, it should be a hydrocarbon oil, have a flash point of below 25°C and it ought to be shown that the product is used as a fuel in spark ignition engines either by itself or in admixture with any other substance. 57. This Court in CCE v. GAIL (India) 2022 SCC OnLine SC 2130 held as under at Para 11 and Para 12 - "It is evident from the rival contentions, that the competing entries are "other" "motor spirits"- urged by the Revenue (TI 2710.11.19) whereas the other entry is "2710 19 90 --- Other". Now, ....
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....7, especially in the teeth of the judgment of this Court mandating sufficient satisfaction of all the 3 conditions. Thus, the contention the Appellant -Revenue is sans cogent evidence to show that the imported substance is a Motor Spirit. 59. Chapter Note 1 to Chapter 29 under HSN Explanatory Notes defines a "Separate Chemically Defined Compound" as "a substance consisting of one molecule species whose composition is defined by a constant ratio of elements and can be represented by a definitive structural diagram." The trigger for a compound for it to be a Separate Chemical Compound arises only when the said two criteria are satisfied, i.e., its composition must be defined by a constant ratio of elements and that it can be represented by a definitive structural diagram. As already depicted above, although the chemical formula of n-Hexane is C6H14 and so do the isomers of n-Hexane have the same chemical composition, the structural diagram of n-Hexane makes it fully differentiable from that of its isomers. The words included under Chapter 29 specifically state 'definitive structural diagram' meaning thereby that it is the structural formation of bonds of carbon and hydrogen that g....
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...., 3-Methyl Pentane (9.38%), Methyl cyclopentane (19.3%), Cyclohexane (0.78%), Benzene (2.81%) and Dimethyl pentane (0.16%) are the unconverted starting materials, which are not deliberately added during manufacturing process nor deliberately left to render the product suitable for specific use. As per the SGS Chemical Analysis Report, the percentage of n-Hexane is 63.93% with other impurities standing at a lesser rate than n-Hexane. As rightly observed by CESTAT, the percentage of n-Hexane in the SGS Test Report is congruent to the recordings under Table 10 of the Kirk-Othmer Encyclopedia and the same remains undisputed. IN RE: CLASSIFICATION OF HEXANE UNDER CHAPTER 29 AS CLARIFIED BY THE DGFT IN THE POLICY CIRCULAR 64. On perusal of the Policy Circular No. 40(RE-2003)/2002-2007 dated 14.07.2004, it is seen that clarifications were sought as to the import of Hexane covered under Chapter 29 of ITC (HS) Classification wherein the DGFT clarified that import of Hexane is covered under Chapter 29 of the ITC (HS) Classifications of Export and Import Items, 2002-07. 65. This Court in Atul Commodities Private Limited v. Commissioner of Customs (2009) 5 SCC 46 had held that accordi....
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....as the Assessee. No person or authority may be afflicted with a burden that will defeat the contours and objective of the provisions. IX. CONCLUSION 71. Hence, after thorough examination of the issue involved, we conclude with the findings as mentioned under - a) Initial burden of proof is not discharged by the Appellant-Revenue - The only contention raised by the Appellant-Revenue was that the Distillation range (boiling point) was between 63°C to 70°C and flash point was below 25°C. No oral or documentary evidence was led to support the submission that the imported good is a Motor Spirit as under the essentials laid down under Chapter 27. b) The application of Rule 3(a) of the General Rules of Interpretation of the HSN Notes, clearly applies to the present matter - HSN Notes guides Customs Tariff and tariff determination. In light of the same, the specific mention of Hexane under Chapter 29 of the HSN Notes clearly defines and places Hexane under Chapter 29 as it exists as a separate chemically defined compound exhibiting distinct chemical and physical properties. c) Since the burden has not been discharged by the Revenue, on examinati....