In re Kodarma Chemical Private Limited (CAAR Delhi)
M/s. Kodarma Chemical Private Limited, a company specializing in the extraction of aromatic hydrocarbons like benzene, toluene, and mixed xylenes, sought an advance ruling on the classification of Pyrolysis Gasoline (Pygas) under the Customs Tariff Act, 1975. The applicant proposed that Pygas, which contains a higher proportion of aromatic hydrocarbons than non-aromatic ones, should be classified under Chapter 2707, which covers aromatic hydrocarbons. The goods in question are derived from the distillation of petroleum or coal tar products, with a Certificate of Analysis showing that Pygas contains substances like benzene, toluene, and xylene. The applicant also noted that the distillation range of Pygas does not meet the criteria for light oils under Chapter 2710, which deals with petroleum oils, as its final boiling point is lower than 210°C, and aromatic hydrocarbons exceed non-aromatic ones by weight.
The Customs Authority reviewed the classification criteria for both Chapters 2707 and 2710. It found that the applicant’s classification under Chapter 2707 was correct, given the aromatic content exceeding non-aromatic hydrocarbons. However, potential changes in the properties of the goods, such as alterations in aromatic content or distillation characteristics, could lead to a reclassification. If the aromatic hydrocarbons were removed or reduced, or if the boiling point changed, Pygas could be classified under Chapter 2710 or even other relevant chapters for derived products. The ruling affirmed that, based on current properties, Pygas should be classified under Chapter 2707, sub-heading 2707 99 00 for other aromatic hydrocarbons. Nevertheless, the classification may need revisiting if the composition of the product changes in the future.
