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Informist, Monday, May 25, 2026

 

NEW DELHI – Settling a 14-year-old case, the Supreme Court Monday upheld Customs Excise and Service Tax Appellate Tribunal's order for lower customs duty for import of exxsol hexane or n-Hexane and rejected the customs department's plea against Reliance Industries Ltd. The apex court said that exxsol hexane imported by companies will be treated as a pure hydrocarbon attracting a customs duty of 2.5%, not motor spirit with a duty of 10%.

 

The apex court said that the initial burden of proof was not discharged by the customs department and the only contention raised by them was that the distillation range of exxsol hexane was between 63°C to 70°C and flash point was below 25°C indicating it is an admixture of various hydrocarbons. No oral or documentary evidence led to support this submission that the imported good is a motor spirit as under the essentials laid down under the the Customs Tariff Act, said the court.

 

Exxsol hexane is a saturated acyclic hydrocarbon existing as a separate chemical compound in pure commercial form, said the court. No other substance is deliberately added during or after the manufacturing process or deliberately left behind to classify it as a mixture with impurities, said the court.

 

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, said the court. The revenue implications in matters such as these are far and wide having significant impact on the Exim status of the nation, said the court.

 

The customs department had argued that the chemical test report of the imported goods stated that it was 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". Factually, the nature of the product was that of an isomer with impurity, hence higher customs duty should be levied on it, said the department.

 

Reliance Industries argued 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, said Reliance Industries, arguing for a lower customs duty on the product.

 

Monday, shares of Reliance Industries closed 0.9% higher at INR 1,367 on the National Stock Exchange.  End    

 

Reported by Surya Tripathi

Edited by Deepshikha Bhardwaj

 

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