HSN Notes Control n-Hexane Classification

The Supreme Court dismissed the Revenue’s appeal in a tariff classification dispute concerning n-Hexane, also described as Exxsol Hexane RD or Hydrosol n-Hexane. The question was whether the imported product fell under Chapter 27 as petroleum oil, or under Chapter 29 as a pure hydrocarbon and separate chemical compound.

The Revenue had relied on the chemical test report, especially the distillation range and flash point, to argue that the product was an admixture of hydrocarbons and therefore classifiable under CTH 2710.00 and CETH 2710.12. The assessee maintained that n-Hexane was a saturated acyclic hydrocarbon in pure commercial form, specifically covered under CTH 2901.10 and CETH 2901.90.

The adjudicating authority accepted the Revenue’s view and classified the product under Chapter 27. On appeal, the Commissioner (Appeals) reversed that finding. The appellate authority held that the Harmonized System Nomenclature Notes are the guiding light in tariff interpretation, and noted that HSN Chapter 29.01 specifically mentions Hexane. On that basis, the product was held classifiable under Chapter 29.

CESTAT affirmed that view, and the Supreme Court agreed. The Court accepted the reasoning that the specific mention of Hexane in the HSN Notes, together with the nature of the product as a separate chemically defined compound, supported classification under Chapter 29. The Court also noted that the Revenue had not discharged the burden of showing that the product should be treated as a mixture for Chapter 27 purposes.

The Court further referred to the DGFT policy circular dated 14.07.2004, which clarified that import of Hexane falls under Chapter 29 of the Customs Tariff Act. On that reasoning, the Court dismissed the appeal and affirmed the CESTAT order dated 15.07.2011.

Practical takeaway: In tariff disputes, a specific HSN entry and the chemical identity of the product can prevail over a broader Chapter 27 classification based only on test parameters.