SC rules exxsol hexane a pure hydrocarbon, duty cut to 2.5%
While the customs department has sought the imported product ‘n-Hexane’ or ‘Exxsol Hexane’, used as process solvent in various industrial processes, to be treated as petroleum oil, RIL said the product is a pure hydrocarbon available as a separate chemical compound under customs and excise heads and a lower customs duty will be imposed on the product.
Upholding the decision of the Customs Excise and Service Tax Appellate Tribunal, which also supported lower duty on imported exxsol hexane or n-Hexane, a Bench comprising Justices Aravind Kumar and Prasanna B Varale said the customs department cannot be unjustly enriched due to misclassification of products; This is prima facie inconsistent with the classification of the same product within the Harmonized System Nomenclature Notes. The high court said the revenue implications in such matters were very wide and had a significant impact on the country’s Exim status.
Exxsol hexane is said to be a saturated acyclic hydrocarbon that exists as a discrete chemical compound in pure commercial form. “Furthermore, no other substances are intentionally added during or after the manufacturing process or deliberately left behind in such a way that it would be classified as a mixture with impurities,” he said.
According to the court, the initial burden of proof was not fulfilled by the ministry and “no verbal or documentary evidence was presented to support the claim that the imported goods had motor spirit” in accordance with the principles specified in the Customs Tariff Law.
RIL had maintained that the presence of impurities did not change the composition of the imported product as the major component of n-Hexane compound remained at 63.93%. The company stated that the show cause notice filed by the customs department failed to prove the use of n-Hexane as fuel in spark ignition engines and did not provide any details regarding the same.
