Facts
The Respondent-Assessee imported "n-Hexane" (or "Exxsol Hexane"), classifying it as a saturated acyclic hydrocarbon under Customs Tariff Heading (CTH) 2901.10 and Central Excise Tariff Heading (CETH) 2901.90
Source reference: p. 2-3The Revenue challenged this, relying on a test report showing a distillation range of 67°C–70°C and a flash point below 25°C, arguing the product was an admixture of hydrocarbons classifiable as "Motor Spirit" under CTH 2710.00 and CETH 2710.12
Source reference: p. 3The Assistant Commissioner ruled in favor of the Revenue
Source reference: p. 4-5the Commissioner (Appeals) reversed this, citing HSN Notes
Source reference: p. 6-7The CESTAT subsequently dismissed the Revenue’s appeal, holding that n-Hexane is a separately chemically defined organic compound
Source reference: p. 7-10Issues
1. Whether the imported product, "n-Hexane," merits classification under Chapter 27 (Petroleum Oil/Motor Spirit) or Chapter 29 (Pure Hydrocarbon/Separate Chemical Compound)
Source reference: p. 2, 16 / para. 1, 34Law Applied
General Rules for the Interpretation of the Import Tariff, specifically Rule 3(a), which mandates that a specific description prevails over a general one
Source reference: p. 21, 23The burden of proof for classification lies with the Revenue, as established in Union of India v. Garware Nylons Ltd.
Source reference: p. 20HSN Explanatory Notes are a "safe guide" for interpreting the Tariff Act (CCE v. Wood Craft Products Ltd.)
Source reference: p. 25Three-fold test for "Motor Spirit" defined in the Supplementary Notes to Chapter 27: (i) it must be hydrocarbon oil, (ii) have a flash point below 25°C, and (iii) be suitable for use as fuel in spark ignition engines (CCE v. GAIL (India))
Source reference: p. 38-39DGFT decisions regarding classification doubts are final and binding under Para 2.3 of the Foreign Trade Policy
Source reference: p. 45Reasoning
The Court found that n-Hexane meets the criteria for Chapter 29 as a "separate chemically defined organic compound" because it possesses a constant ratio of elements (C6H14) and a definitive linear structural diagram, distinguishing it from its branched isomers
Source reference: p. 41-42Regarding the Revenue's claim under Chapter 27, the Court held that while the flash point was indeed below 25°C, the Revenue failed to provide any evidence that the product was suitable for use as fuel in spark ignition engines—a mandatory third condition for "Motor Spirit"
Source reference: p. 38-40The presence of impurities did not disqualify the product from Chapter 29, as they resulted naturally from the distillation process (unconverted starting materials) and were not deliberately added or left behind to alter its use
Source reference: p. 43-44The Court also emphasized the DGFT Policy Circular dated 14.07.2004, which explicitly clarified that Hexane falls under Chapter 29
Source reference: p. 44-45Holding
The Court answered the issue by holding that "n-Hexane" is correctly classifiable under CTH 2901.10 and CETH 2901.90
The Revenue failed to discharge its burden of proof to show the product was a Motor Spirit under Chapter 27
Source reference: p. 47The Court affirmed the CESTAT order and dismissed the Revenue's appeal
Source reference: p. 49Original Court PDF
Commr.Of Customs KandlavsM/S Reliance Industries Ltd.
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