A working case study in HS classification — Commissioner of Customs, Kandla v. Reliance Industries Ltd (2026 INSC 536)
On 25 May 2026, the Supreme Court of India closed a classification dispute that had been running since a Bill of Entry filed at Kandla over two decades earlier. The product was ordinary industrial n-Hexane. The question was deceptively simple: is it a petroleum oil (Chapter 27) or an organic chemical (Chapter 29)?
For anyone who classifies goods for a living, this case is a near-perfect teaching example. It packs the four things that decide most real-world classification fights into a single, clean fact pattern: the General Rules of Interpretation, the chapter notes, the burden of proof, and the quiet but decisive role of a binding administrative clarification. This case study walks through how each of those 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:
- Distillation / boiling range: roughly 63–70 °C
- Flash point: below 25 °C
- Purity: n-Hexane content of 63.93%, the balance being other hexane isomers and trace contaminants
Hold those numbers in mind — the entire dispute is a fight over what they mean.
The two competing headings
| Revenue’s claim | Importer’s claim | |
| Chapter | 27 — Mineral fuels, mineral oils | 29 — Organic chemicals |
| Customs heading | CTH 2710.00 | CTH 2901.10 |
| Central Excise heading | 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, and it is exactly the situation the GRI were written to resolve.
Step 1 — Why this is a classic GRI Rule 3(a) problem
When goods are prima facie classifiable under two or more headings, GRI Rule 3(a) applies: the heading that provides the most specific description is preferred to one that gives a more general description.
Here the contrast could not be sharper:
- 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 a 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.
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 only be consulted 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 true meaning of a tariff expression. The Court compared Chapters 27 and 29 of the HSN against the corresponding Customs and Central Excise headings and found them materially identical. So the Notes were squarely available.
And the Notes were decisive in two ways:
- Chapter 27 excludes separately chemically defined compounds. The General Note to Chapter 27 says that where petroleum fractions are treated to the point of becoming 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” vs. “mixture”
This is the conceptual heart of the case, and the part most worth internalising.
Chapter 29 applies to a separately chemically defined compound — defined in Chapter Note 1 as a single molecular species whose composition is a constant ratio of elements and which can be represented by a definitive structural diagram.
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, which Chapter Note 1(b) to Chapter 29 expressly pushes into Chapter 27. The Court drew the critical distinction:
A defined compound is permitted to 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 in the imported hexane — 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. So the product remained a defined compound with permissible impurities, not an excluded mixture.
Classifier’s takeaway: “It contains other substances” is not the end of the analysis. The dividing line is intent and origin: impurities from the process are tolerated; substances deliberately added or left in to tune the product for a use convert it into a mixture (or a preparation) and change the heading. Document the manufacturing process — it is evidence, not background.
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), the spark-ignition-engine use. 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 resemblance of physical properties is not proof of identity or end-use.
Classifier’s takeaway: when a heading carries a use-based or condition-based definition, every condition is an evidentiary burden. Matching one or two measurable properties is not enough — and physical similarity is not a substitute for proving the defining condition.
Step 5 — Burden of proof sits with the department
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 requiring oral or documentary evidence, not mere assertion (Garware Nylons, Dunlop India, Gastrade International).
Because Revenue proved only the flash point and never the engine-fuel use, it simply 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, force the question of what the department has actually proved. If you are asserting a reclassification, assemble evidence for every element of the heading’s definition before you issue the notice.
Step 6 — The binding DGFT clarification
There was also a clean, almost dispositive shortcut. 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.
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 — a saturated acyclic hydrocarbon and a separately chemically defined compound under 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) vs 2901 (Ch. 29). Apply GRI Rule 3(a).
- Which is more specific? → 2901 names “hexanes” by identity; 2710 describes a broad oil family. Specific beats general.
- Confirm with HSN Notes? → Ch. 27 excludes defined compounds; Ch. 29 lists hexane. Texts are pari materia, so the Notes apply.
- Defined compound or mixture? → Constant formula + definitive diagram = defined compound. Impurities are process-derived, not deliberate. Stays in Ch. 29.
- Does the Ch. 27 sub-heading even fit? → “Motor Spirit” needs all three conditions; engine-fuel use never proved. Fails.
- Who had to prove it? → Revenue. Burden not discharged.
- Any binding guidance? → DGFT circular places hexane in Ch. 29. Decisive.
Five things to take to your next classification file
- A named entry usually beats a descriptive family heading — work GRI Rule 3(a) before defaulting to the broader chapter.
- Lead with the HSN Explanatory Notes where the tariff mirrors them; “the tariff is clear” rarely defeats them.
- Impurities ≠ mixture. Process-derived impurities are permitted in a defined compound; deliberately added or retained substances are not. The manufacturing process is evidence.
- Condition-based headings are cumulative. Prove every limb — physical-property resemblance is not proof of end-use.
- Check for binding administrative clarifications first. A DGFT or CBIC circular can settle the matter on its own.
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.