2011 (7) TMI 279 - AT - Customs

Import of consignments of N-Hexane (Exxsol Hexane) - Classification - Assessment was made provisional pending the chemical test reports of the samples - The sample is a mixture of saturated Hydro carbons in the form of clear colorless liquid flashing below 25 degree centigrade and having boiling range 66 Centigrade to 69 Centigrade - Revenue entertained a view that since the flash point of the imported goods was below 25 degree centigrade and the distillation range was between 60 to 70 degree centigrade, the imported material was not a pure compound but an admixture of various hydrocarbons classifiable under Chapter 27 - Held that - Note that for classifying the product under Chapter 27, the criteria of not only the flash point is required to be matched but the fact that the product is suitable for use as for spark ignition engine is also to be established - The Revenue has nowhere advanced any argument or evidence to show that the product is suitable for use as fuel either by itself or in admixture - the goods imported by them are used as solvents and there is no material evidence placed to allege that the same are used as spark ignition engine - In the absence of the same, the Revenue s contention that the product is falling under Chapter 27, cannot be upheld - Decided in favour of assessee.

Summary

Issues Involved:
1. Classification of N-Hexane under Customs Tariff Heading 2901.10 vs. 2710.00.
2. Consideration of chemical test reports and HSN Notes.
3. Applicability of Chapter Note 1(b) to Chapter 29 of the Customs Tariff.
4. Suitability of the product for use as fuel in spark ignition engines.

Detailed Analysis:

1. Classification of N-Hexane under Customs Tariff Heading 2901.10 vs. 2710.00:
The respondents imported N-Hexane and claimed its classification under Customs Tariff Heading 2901.10 and Central Excise Tariff Heading 2901.90. The Revenue, based on chemical test reports, argued that the product was an admixture of hydrocarbons and should be classified under Chapter 27. The Assistant Commissioner supported this view, but the Commissioner (Appeals) reversed the decision, favoring the classification under Chapter 29 based on HSN Notes and the specific mention of Hexane under heading 2901.10.

2. Consideration of chemical test reports and HSN Notes:
The chemical test reports indicated that the sample was a mixture of saturated hydrocarbons with a flash point below 25 degrees centigrade. The respondents argued that N-Hexane is a separately defined chemical compound with a specific formula, supported by HSN explanatory notes and previous Tribunal judgments. The Commissioner (Appeals) agreed, noting that the Customs Tariff is based on HSN Notes, which specifically list Hexane under heading 2901.10.

3. Applicability of Chapter Note 1(b) to Chapter 29 of the Customs Tariff:
The Revenue contended that the product was a mixture of isomers of Hexane, excluded from Chapter 29 per Chapter Note 1(b). The respondents countered that the product was commercially pure Hexane, supported by SGS reports and Kirk-Othmer Encyclopaedia. The Tribunal found that the product matched the composition of commercially pure Hexane (Hexane-A) and thus should be classified under Chapter 29.

4. Suitability of the product for use as fuel in spark ignition engines:
The Revenue argued that the product could be used as fuel, citing its derivation from petroleum oil. However, the respondents provided evidence that the product was used as a solvent, not as fuel. The Tribunal noted that the Revenue failed to prove the product's suitability for use in spark ignition engines, a necessary criterion for classification under Chapter 27.

Conclusion:
The Tribunal upheld the Commissioner (Appeals)'s decision, confirming that N-Hexane should be classified under Customs Tariff Heading 2901.10 and Central Excise Tariff Heading 2901.90. The Tribunal emphasized the importance of HSN explanatory notes and the need for the Revenue to prove the product's suitability for use as fuel. The appeal by the Revenue was rejected.