While the customs department wanted the imported product -‘n-Hexane‘ or ‘Exxsol Hexane,’ which is used as a processing solvent in various industrial processes, to be treated as a petroleum oil , RIL said the product was a pure hydrocarbon existing as a separate chemical compound under the custom and excise tariff headings and a lower customs duty was to be levied on the product.
Upholding a Customs Excise and Service Tax Appellate Tribunal’s order that also favoured lower duty on imported exxsol hexane or n-Hexane, a Bench comprising Justices Aravind Kumar and Prasanna B Varale said that the customs department cannot be unjustly enriched due to wrong classification of products which is prima facie also against the classification of the same product under Harmonized System Nomenclature Notes. The revenue implications in matters such as these are far and wide having significant impact on the Exim status of the nation, the apex court said.
It said that Exxsol hexane is a saturated acyclic hydrocarbon existing as a separate chemical compound in pure commercial form. “Further no other substance is deliberately added during or after the manufacturing process or deliberately left behind to classify it as a mixture with impurities,” it said.
According to the court, the initial burden of proof was not discharged by the department and “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 the Customs Tariff Act.
RIL had contended that the presence of impurities did not change the composition of the imported product as the major component of the compound n-Hexane remained at 63.93%. The show cause notice by the customs department had failed to prove that n-Hexane was used as a fuel in spark ignition engines and is bereft of any details to the same, the company stated.