CESTAT Favors Berger Paints: Ethyl Benzene Recognized as Xylene Isomer in Customs Classification Dispute [Read Order]
CESTAT ruled in favor of Berger Paints, holding that Ethyl Benzene qualifies as a Xylene isomer under CTH 29024400.
![CESTAT Favors Berger Paints: Ethyl Benzene Recognized as Xylene Isomer in Customs Classification Dispute [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/Berger-Paints.jpg "CESTAT Favors Berger Paints: Ethyl Benzene Recognized as Xylene Isomer in Customs Classification Dispute [Read Order]")
In a significant ruling made by the Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), the tribunal held that Ethyl Benzene qualifies as a Xylene isomer for the purpose of classification under CTH 29024400. Berger Paints (Appellant 1) and Krest Organics (Appellant 2) purchased chemicals, including Mixed Xylene Isomers (Dimethylbenzene), from the...
In a significant ruling made by the Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), the tribunal held that Ethyl Benzene qualifies as a Xylene isomer for the purpose of classification under CTH 29024400.
Berger Paints (Appellant 1) and Krest Organics (Appellant 2) purchased chemicals, including Mixed Xylene Isomers (Dimethylbenzene), from the importer, Kunjal Synergies Pvt. Ltd (Appellant 3).
The imported mixture was a combination of Xylene isomers (o-xylene, m-xylene, and p-xylene) Ethyl Benzene.While filing the ex-bond Bills of Entry, all appellants classified the goods under the tariff head of 29024400 as Mixed Xylene Isomers.
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However, the Customs Department disputed this classification.
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They argued that, as per the Harmonized System of Nomenclature (HSN) Explanatory Notes, classification under CTH 29024400 requires the mixture to contain 95% or more by weight of Xylene isomers.
Since Customs did not consider Ethyl Benzene to be an isomer of Xylene, they excluded its weight from the calculation. As a result, the combined weight of the remaining Xylene isomers fell below the 95% threshold. Therefore the classification under CTH 29024400 was rejected.
The customs then reclassified the solvent under CTH 27073000 and imposed differential customs duty and interest. They also levied penalties under Sections 114A and 114AA of the Customs Act, 1962, for alleged misdeclaration.
The counsels’ for the appellants, Sudhir Mehta and Anurag Bagaria, opposed this reclassification.
The counsel contended that Ethyl Benzene shares the same molecular formula (C₈H₁₀) as the Xylene isomers, thereby qualifying as an isomer of Xylene.Therefore, for the purpose of classification under CTH 29024400 (Mixed xylene isomers), Ethyl Benzene should be included in the total weight of xylene isomers.
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The counsel pointed out that the classification made by the appellant was considered a common domestic practice followed by many, including Reliance Industries Pvt. Ltd. The same practice has been acknowledged by the excise and GST authorities.
The counsel also stressed that classification is a legal issue, not a misdeclaration, and they have consistently declared the goods under CTH 29024400 since 2011.
Meanwhile, the counsel for the respondent, Subrata Debnath, justified the reclassification made by the customs department.
He argued that Ethyl Benzene, despite having the same molecular formula as xylene, has a different chemical structure. Therefore, it should not be considered as xylene isomer for this specific tariff classification.
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The arguments were presented before the division bench comprising Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member).
The tribunal accepted the appellant's argument that Ethylbenzene is a Xylene isomer, sharing the same molecular formula (C₈H₁₀). Including it, the isomer content exceeded 95%, meeting the HSN criteria for CTH 29024400. Hence, the original classification was upheld.
The Bench also took note of the consistent domestic classification practice followed by other major suppliers, including Reliance Industries.
The tribunal held the original classification to be legally correct and set aside the reclassification and penalties imposed by Customs.
To Read the full text of the Order CLICK HERE
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