CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL BANGALORE REGIONAL BENCH - COURT NO. 1 Central Excise Appeal No. 21562 of 2018 (Arising out of Order-in-Original No. MLR-EXCUS-000-COM-MS-04-

18-19 dated 13.06.2018 passed by the Commissioner of Central Excise & Central Tax, Mangaluru.)

M/s. Mangalore Refinery and Petrochemicals Limited, Appellant(s)

Bala Village, Kuthethoor, P.O. Via Katipalla, Mangaluru – 575 030.

VERSUS The Commissioner of Central Excise and Central Tax, 7^th Floor, Trade Centre, Respondent(s)

Bunts Hostel Road, Mangalore – 575 003.

APPEARANCE:

Mr. Ravi Raghavan and Mr. Nischal K.M., Advocates for the Appellant M r. P.R.V. Ramanan, Special Counsel (AR) for the Respondent CORAM: HON'BLE DR. D.M. MISRA, MEMBER (JUDICIAL)

HON'BLE MR PULLELA NAGESWARA RAO, MEMBER (TECHNICAL)

Final Order No. 20031 /2026 DATE OF HEARING: 18.07.2025 DATE OF DECISION: 16.01.2026 PER : DR. D.M. MISRA This is an appeal filed against the Order-in-Original No.

MLR-EXCUS-000-COM-MS-04-18-19 dated 13.06.2018 passed by the Commissioner of Central Excise and Central Tax, Mangalore.

2. Briefly stated the facts of the case are that the appellant is engaged in the manufacture and clearance of petroleum products falling under Chapter 27 of the Central Excise Tariff Act, 1985 (CETA, 1985). On the basis of intelligence, DGCEI initiated investigation against the appellant since the appellant were clearing one of their products viz. Mixed Xylene by misclassifying the same under Chapter heading 2902 of CETA. It is alleged that constituents of Xylene contained in the Mixed Xylene manufactured by the appellant is less than 82.72%; hence it merits classification under Chapter heading 2707 instead of 2902 of CETA, 1985. Consequent to completion of the investigation, show-cause notice was issued on 02.05.2017 demanding differential duty of Rs.11,74,60,396/- for the period from April 2012 to September 2016 along with interest and penalty. On adjudication, the demand was confirmed with interest and penalty of equivalent amount. Hence, the present appeal.

3.1. At the outset, the learned advocate for the appellant has submitted that the manufactured product Mixed Xylene is classifiable under Entry 29024400 of CETA, 1944. He has submitted that a combination of Ortho-xylene, Meta-xylene and Para-xylene i.e. Mixed Xylene is classifiable under the said Tariff Entry 29024400 of CETA, 1985. Relying on the Chapter Note 1(a)/(b) to Chapter 29 of CETA, he has submitted that it includes separate chemically defined organic compounds and mixtures of two or more isomers, which originate from the same organic compound. There is no specification prescribed in the Chapter Note which makes reference to purity or weight of isomers in the mixture. Therefore, by virtue of Chapter Note and the Tariff Entry, the mixed Xylene is correctly classifiable under Tariff Entry 2902 44 00 of CETA, 1985. He has submitted that the combination of or percentage of isomers by weight has no significance to determine the classification.

3.2. Rebutting the finding of the adjudicating authority which placed reliance on the HSN Explanatory Notes at Para (C)(I)(c) to Chapter 2902, the learned advocate has submitted that such reference is uncalled for when there is no ambiguity in the Chapter Heading of CETA, 1985. It is his contention that HSN being external aids to construction, need not be mandatorily referred to in in all cases. Alternatively, he has submitted that by applying HSN Explanatory Notes, the goods are classifiable under Heading 2902 of CETA, 1985. Further, referring to the definition of Xylene in the Explanatory Notes, he has contended that from the said definition, it is clear that Xylene, which contains 95% or more by weight of Xylene isomers, with all isomers being taken together, would be classifiable under Tariff Entry 29024400 of CETA, 1985 while Xylene of lower purity would be classifiable under Heading 2707 of CETA, 1985. He has submitted that Ethyl Benzene is also an isomer of Xylene; hence