Mr. Dwarkanath, the GAIL judgment requires the Revenue to prove that the product is 'suitable for use as fuel in spark ignition engines'. How have you proved that? The SGS report only gives chemical parameters, not end-use.

My Lord, the third condition in GAIL is 'suitable for use', not 'actually used'. The court can infer suitability from the chemical parameters. Any hydrocarbon oil with a flash point below 25°C is, by definition, volatile and combustible, making it suitable for use as fuel in spark ignition engines. The respondent has not produced any evidence to show that n-Hexane is not suitable for use as fuel. In fact, n-Hexane is used as a fuel additive and as a component in gasoline. The burden is not on the Revenue to prove actual use; it is on the assessee to show that the product is not suitable for use as fuel if they claim otherwise.

Chapter 29 of the HSN Explanatory Notes specifically mentions 'hexanes' under Heading 2901.10. Why should this not be the controlling classification?

My Lord, the HSN Notes are a guide, but they cannot override the explicit provisions of the Tariff Act. Moreover, Chapter Note 1(b) to Chapter 29 expressly excludes 'mixtures of acyclic hydrocarbon isomers' from Chapter 29. The imported product is a mixture — it contains only 63.93% n-Hexane, and the rest are other hydrocarbons, including isomers of hexane. The presence of these isomers means it is a mixture, and Note 1(b) applies. Once excluded from Chapter 29, the product falls back to Chapter 27, which is the residual heading for petroleum products.

The DGFT circular clearly states that Hexane falls under Chapter 29. Under the Foreign Trade Policy, that decision is final and binding. Why should the customs authorities not be bound by it?

My Lord, the DGFT circular relates to the ITC (HS) classification for import licensing purposes — it determines whether an import is permitted or prohibited, and whether an import license is required. Customs duty classification under the Customs Tariff Act is a separate matter. The two schemes serve different purposes. The DGFT's decision is binding for the purpose of foreign trade policy, but it cannot usurp the function of the customs authorities under the Customs Tariff Act. This Court has consistently held that classification for customs duty must be determined independently under the Tariff Act.

The Revenue has not led any evidence to show that the imported product was actually used as a motor spirit. The respondent has consistently stated that it is used as a solvent. How do you respond?

My Lord, the classification is determined at the time of import, not based on the actual use by the importer. The same product can be used for multiple purposes. The question is whether the product is suitable for use as motor spirit, not whether this particular importer used it as such. The physical parameters — flash point below 25°C and distillation range 63-70°C — demonstrate suitability. The respondent's statement about its intended use is irrelevant for classification. If the respondent wanted to claim a different classification, they should have imported a purer product.

For PetitionerTax Premium

n-Hexane Is Motor Spirit Classifiable Under Chapter 27 — (2026) INSC 536

The SGS Chemical Test Report establishes that n-Hexane has a flash point below 25°C and a distillation range between 63-70°C, satisfying the physical parameters of 'Motor Spirit' under Chapter 27.

Commissioner of Customs, Kandla v. M/s Reliance Industries Limited — (2026) INSC 536

Core Argument

The SGS Chemical Test Report establishes that n-Hexane has a flash point below 25°C and a distillation range between 63-70°C, satisfying the physical parameters of 'Motor Spirit' under Chapter 27. The product is an admixture of hydrocarbons, not a pure compound, and is therefore excluded from Chapter 29 by Chapter Note 1(b).

Key Precedents

CCE v. GAIL (India) 2022 SCC OnLine SC 2130 — Held that for classification as 'Motor Spirit' under Chapter 27, all three conditions must be satisfied, but the petitioner submits that the third condition (suitability for use) is satisfied by the flash point and distillation range.

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