A Chemical “n-Hexane” Cannot Be Taxed as Motor Spirit Unless Revenue Proves It Is Actually Suitable for Use as Engine Fuel
Case Name: Commissioner of Customs, Kandla, Gujarat v. M/s Reliance Industries Limited
Citation: 2026 INSC 536
Date of Judgment/Order: 25 May 2026
Bench: Justice Aravind Kumar and Justice Prasanna B. Varale
Held: The Supreme Court held that n-Hexane/Exxsol Hexane is classifiable under Chapter 29 as a saturated acyclic hydrocarbon and a separately chemically defined organic compound, and not under Chapter 27 as petroleum oil or motor spirit. The Court held that merely because n-Hexane has a flash point below 25°C and a boiling range of 63°C to 70°C, it cannot be classified as motor spirit unless the Revenue also proves that it is suitable for use as fuel in spark ignition engines. Since the Revenue failed to discharge this burden and since HSN Notes and the DGFT policy circular specifically support classification of Hexane under Chapter 29, the assessee’s classification was upheld.
Summary: The dispute concerned the customs and excise classification of imported n-Hexane/Exxsol Hexane. The assessee classified the product under CTH 2901.10 and CETH 2901.90 as a saturated acyclic hydrocarbon existing as a separate chemically defined compound. The Revenue sought classification under CTH 2710.00 and CETH 2710.12 as petroleum oil/motor spirit, relying mainly on the SGS test report showing a flash point below 25°C and distillation range between 63°C and 70°C. The Commissioner (Appeals) and CESTAT rejected the Revenue’s view and held that Hexane is specifically covered under Chapter 29. The Supreme Court examined the chemical nature of n-Hexane, the HSN Explanatory Notes, the General Rules of Interpretation, the DGFT policy circular dated 14.07.2004, and the requirement that motor spirit must not only have a flash point below 25°C but must also be suitable for use as fuel in spark ignition engines. The Court found that n-Hexane has the formula C6H14, has a definitive linear structure, and is commercially recognised as a separate chemical compound, while the impurities present were not deliberately added and did not convert it into a Chapter 27 product.
Decision: The Supreme Court dismissed the Revenue’s appeal and affirmed the CESTAT order dated 15.07.2011, thereby upholding classification of n-Hexane under Chapter 29 rather than Chapter 27. The Court held that the Revenue had failed to prove that the imported product was motor spirit and that the specific classification of Hexane as a saturated acyclic hydrocarbon under Chapter 29 prevailed over the general petroleum classification urged by the Revenue. Pending applications were disposed of.