A working case study in HS classification: Commissioner of Customs, Kandla v. Reliance Industries Ltd (2026 INSC 536), Supreme Court of India.
On 25 May 2026, the Supreme Court of India held that imported n-Hexane is an organic chemical of Chapter 29 (a saturated acyclic hydrocarbon, CTH 2901.10 / CETH 2901.90 under the Indian tariffs applied in the case), not a petroleum oil or “Motor Spirit” of Chapter 27. The dispute had been running since a Bill of Entry filed at Kandla over two decades earlier. The Court relied on Rule 3(a) of the General Rules of Interpretation, the Explanatory Notes on separately chemically defined compounds, Revenue’s failure to prove use as engine fuel, and a binding DGFT clarification.
The case brings together four elements that recur in classification disputes: the General Rules of Interpretation, the chapter notes, the burden of proof and binding administrative clarifications. Here they appear in one clean fact pattern, which makes the case a good teaching example. This study walks through how each of them worked and what you can carry into your own classification files.
The product, in plain terms
n-Hexane is a straight-chain saturated hydrocarbon with the molecular formula C₆H₁₄. It is produced by fractional distillation of petroleum and used industrially as a solvent: for extracting vegetable oils, as a polymerisation medium in HDPE manufacture, as a paint diluent, and in low-temperature calibration. It is not sold or used as engine fuel.
The chemistry test report (SGS) recorded two properties that became the whole battleground, and the judgment records the product’s purity:
- Distillation / boiling range: roughly 63–70 °C
- Flash point: below 25 °C
- Purity: n-Hexane content of 63.93%, the balance being other hydrocarbons (hexane isomers, methylcyclopentane, cyclohexane and benzene) and traces such as sulphur and chlorine
Keep those numbers in mind. The whole dispute is about what they mean.
The two competing headings
| Revenue’s claim | Importer’s claim | |
| Chapter | 27: Mineral fuels, mineral oils | 29: Organic chemicals |
| Customs Tariff heading (India) | CTH 2710.00 | CTH 2901.10 |
| Central Excise Tariff heading (India) | CETH 2710.12 | CETH 2901.90 |
| Characterisation | Petroleum oil → “Motor Spirit” | Separately chemically defined acyclic hydrocarbon (saturated) |
| Duty | Higher | Lower |
This is a textbook two-heading contest, the situation the General Rules were written to resolve.
Step 1: why the Court applied Rule 3(a)
When goods are prima facie classifiable under two or more headings, Rule 3(a) applies: the heading that provides the most specific description is preferred to one that gives a more general description (for the order in which the Rules apply, see this practical guide to the GRIs).
The two headings describe the goods very differently:
- Heading 2710 describes a broad class: “petroleum oils and oils obtained from bituminous minerals, other than crude…”, an undefined family of refined fractions (petroleum spirit, white spirit, kerosene, gas oils, fuel oils, naphtha and so on).
- Heading 2901 covers “acyclic hydrocarbons”, and its Explanatory Notes name the saturated members one by one: ethane, butanes, pentanes, hexanes, heptanes, octanes…
When one heading names your product by its own chemical identity and the rival heading only describes a broad family it might belong to, the specific entry wins. That is the spine of the decision.
A note on method: the legal notes point the same way before Rule 3 is reached. Note 1(a) to Chapter 27 excludes separate chemically defined organic compounds (other than pure methane and propane), and Note 1(a) to Chapter 29 covers them. Under Rule 1, headings are read with the Section and Chapter Notes, so a product that qualifies as a separate chemically defined compound is already outside Chapter 27 at that stage.
Classifier’s takeaway: before reaching for a residuary or “family” heading, check whether a more specific heading names the goods directly. A named entry almost always defeats a descriptive one under Rule 3(a).
Step 2: the HSN Explanatory Notes as the tie-breaker
Revenue argued that the Explanatory Notes should be consulted only when the tariff itself is ambiguous, and that the tariff “clearly” placed the goods in Chapter 27. The Court rejected the framing.
The settled position (running from Wood Craft Products through Business Forms and reaffirmed here) is that where the tariff and the HSN are pari materia, worded in substantially the same way, the HSN Explanatory Notes are a safe guide to the meaning of a tariff expression. The Court compared Chapters 27 and 29 of the HSN with the corresponding Customs and Central Excise headings and found them materially identical, so the Notes could be used. (On how the Explanatory Notes are used to settle disputes more generally, see the role of the Explanatory Notes in classification disputes.)
The Notes were decisive in two ways:
- Chapter 27 excludes separately chemically defined compounds. The General Explanatory Note to Chapter 27 says that where petroleum fractions are treated until they become separate chemically defined compounds in a pure or commercially pure state, they leave Chapter 27 and go to Chapter 29.
- Chapter 29 names hexane. The Explanatory Note to heading 29.01 lists hexanes among the saturated acyclic hydrocarbons it covers.
Classifier’s takeaway: the “tariff is clear, so ignore the Notes” argument rarely survives where the texts mirror the HSN. Build your reasoning from the Explanatory Notes, not around them.
Step 3: “separately chemically defined compound” or “mixture”
This is the centre of the case.
Note 1(a) to Chapter 29 covers separate chemically defined organic compounds, whether or not containing impurities. The Explanatory Notes describe such a compound as a single molecular species whose composition is defined by a constant ratio of elements and which can be represented by a definitive structural diagram, and the Court applied that description.
n-Hexane qualifies on both limbs:
- Its composition is constant: C₆H₁₄.
- Its straight-chain structure is a definitive diagram that distinguishes it from its branched isomers (2-methylpentane, 3-methylpentane, 2,3-dimethylbutane, etc.), which share the formula C₆H₁₄ but differ in arrangement.
Revenue’s counter was that the impurities made the product a mixture of isomers. Note 1(b) to Chapter 29 admits mixtures of isomers of the same organic compound but expressly excepts mixtures of acyclic hydrocarbon isomers, which go to Chapter 27. The Court drew the critical distinction:
A defined compound may contain impurities, provided those impurities arise solely from the manufacturing process (unconverted starting materials, impurities in the feedstock, reagents, by-products) and are not deliberately added or deliberately left in to make the product suitable for a specific use.
The other components recorded in the judgment (methylcyclopentane 19.3%, 3-methylpentane 9.38%, 2-methylpentane 3.48%, benzene 2.81%, and smaller traces) were unconverted starting materials from fractional distillation. Nothing was deliberately introduced or retained. The product therefore remained a defined compound with permissible impurities, not an excluded mixture.
Classifier’s takeaway: “It contains other substances” does not end the analysis. The dividing line is intent and origin. Impurities from the process are tolerated; substances deliberately added or left in to suit the product to a use turn it into a mixture (or a preparation) and change the heading. Document the manufacturing process: it is evidence, not background (see building an audit-proof HS classification file).
Step 4: the three-condition “Motor Spirit” test
Revenue’s fallback was that the goods were “Motor Spirit” under CETH 2710.12. The Supplementary Note to Chapter 27 defines Motor Spirit as any hydrocarbon oil (excluding crude mineral oil) that (a) is a hydrocarbon oil, (b) has a flash point below 25 °C, and (c) is suitable for use as fuel in spark-ignition engines, by itself or in admixture.
Relying on CCE v. GAIL (India), the Court stressed that these conditions are cumulative: all three must be satisfied. Revenue proved only (b), the flash point. It led no evidence at all on (c), use in spark-ignition engines. n-Hexane is a solvent; nobody runs an engine on it.
A flash point below 25 °C and a 63–70 °C boiling range may resemble a special-boiling-point spirit on paper, but similar physical properties do not prove identity or end-use.
Classifier’s takeaway: when a heading carries a use-based or condition-based definition, every condition is something to prove. Matching one or two measurable properties is not enough, and physical similarity does not replace proof of the defining condition. (A chapter note with cumulative conditions decided another recent chemical case: see when a surfactant fails its own test.)
Step 5: the burden of proof sits with the department
This is a recurring theme and the first conclusion in the judgment: in classification disputes, the burden of proof is on the Revenue to establish the heading it asserts. The standard is preponderance of probability, not “beyond reasonable doubt”, but it is still a real burden that needs oral or documentary evidence, not assertion (Garware Nylons, Dunlop India, Gastrade International).
Because Revenue proved only the flash point and never the engine-fuel use, it did not discharge that burden. The classification could not stand on an incomplete evidentiary record.
Classifier’s takeaway (for both sides): if you are defending a self-classification, press the question of what the department has actually proved. If you are asserting a reclassification, gather evidence for every element of the heading’s definition before you issue the notice.
Step 6: the binding DGFT clarification
There was also a shorter route. Under Para 2.3 of the Foreign Trade Policy, any doubt about the classification of an item under the ITC(HS) must be referred to the DGFT, whose decision is final and binding (Atul Commodities). The DGFT had already clarified, by Policy Circular No. 40(RE-2003)/2002-2007 dated 14.07.2004, that the import of hexane falls under Chapter 29 of the ITC(HS).
The Court observed that this circular alone was enough to dismiss the appeal (para 66), although its formal conclusions rest on all the grounds above together.
Classifier’s takeaway: before litigating a classification, search for binding administrative guidance: DGFT policy circulars, CBIC circulars, tariff rulings. A single binding clarification can end a dispute that chemistry and chapter notes would otherwise take pages to resolve.
The outcome
The Supreme Court dismissed the Revenue’s appeal and affirmed the CESTAT order. n-Hexane is correctly classified under CTH 2901.10 / CETH 2901.90, as a saturated acyclic hydrocarbon and a separately chemically defined compound of Chapter 29.
The chain of decisions: the original Adjudicating Authority sided with Revenue (Chapter 27); the Commissioner (Appeals), CESTAT and finally the Supreme Court all sided with the importer (Chapter 29).
The classification logic in one flow
- Two candidate headings? Yes: 2710 (Ch. 27) and 2901 (Ch. 29). Apply Rule 3(a).
- Which is more specific? 2901 names “hexanes” by identity; 2710 describes a broad oil family. Specific beats general.
- Do the HSN Notes confirm it? Ch. 27 excludes defined compounds; Ch. 29 lists hexane. The texts are pari materia, so the Notes apply.
- Defined compound or mixture? Constant formula and a definitive diagram make it a defined compound. The impurities come from the process and were not added deliberately. It stays in Ch. 29.
- Does the Ch. 27 subheading even fit? “Motor Spirit” needs all three conditions; engine-fuel use was never proved. It fails.
- Who had to prove it? Revenue. The burden was not discharged.
- Any binding guidance? The DGFT circular places hexane in Ch. 29. Decisive.
This case study is provided for educational and professional-development purposes in the field of tariff classification. It summarises and interprets a reported judgment for learning; it is not legal advice. For classification of a specific consignment, refer to the current ITC(HS) tariff, the relevant chapter and section notes, applicable circulars, and qualified professional or legal counsel.