Holding

The Supreme Court held that classification of imported goods under the Customs Tariff must be determined by the "most akin" test under Rule 4, and that the incomplete and inconclusive laboratory evidence does not satisfy the burden of proof to deem the goods High Speed Diesel.

Summary

The appellants imported oil from the UAE and declared it as Base Oil SN 50, but the Directorate of Revenue Intelligence re‑classified it as High Speed Diesel (HSD) and seized it. The Adjudicating Authority, CESTAT and the High Court each held the oil to be HSD, relying on three laboratory reports that tested only a portion of the 21 parameters prescribed in IS 1460:2005 and on expert testimony that was evasive about the untested parameters. The appellants challenged the classification, arguing that the evidence was inconclusive and that the burden of proof required compliance with all specifications. The Supreme Court examined the standards of proof, the relevance of expert opinion, and the interpretation rules of the Customs Tariff, concluding that the "most akin" test under Rule 4, not the preponderance of probability, governs classification. Finding the laboratory reports and expert evidence insufficient to prove the oil was HSD, the Court set aside the High Court judgment and allowed the appeals, giving the benefit of doubt to the appellants.

Issues considered

Whether the imported oil should be classified as Base Oil SN 50 or as High Speed Diesel (HSD) under the Customs Tariff.
Whether the Customs Authority may rely on the test of preponderance of probability to establish the classification.
Whether the "most akin" test under Rule 4 of the General Rules for interpretation of the Schedule should be applied instead of preponderance of probability.
Whether laboratory reports that test only a subset of the parameters under IS 1460:2005 are sufficient to prove the goods are HSD.
What standard of proof applies in customs classification proceedings – preponderance of probability or a higher degree of probability.

Legislation cited

Customs Act, 1962s. 111(d), s. 111(m), s. 112(a), s. 112(b), s. 114AA, s. 117
Customs Tariff Act, 1975s. First Schedule, s. Rule 4, s. Second Schedule
Evidence Act, 1872s. 3, s. 45
Petroleum Act, 1934s. 2(c)

Subjects

most akin testHigh Speed DieselBase Oilpreponderance of probabilityFlash point of petroleumExpert OpinionStandard of proofIS 1460:2005Classification of petroleum productsBeyond reasonable doubt

Judgment

[2025] 3 S.C.R. 1350 : 2025 INSC 411

Gastrade International
v.
Commissioner of Customs, Kandla
(Civil Appeal No. 4475 of 2025)
28 March 2025
[B.V. Nagarathna and
Nongmeikapam Kotiswar Singh,* JJ.]

Issue for Consideration
Whether, the imported goods is to be treated as Base Oil as claimed
by the appellants or High Speed Diesel (HSD) determined by the
Customs Authorities, which is contested by the appellants. The
High Court had concluded that the Customs Authority had been
able to prove that the imported product is HSD by applying the
test of preponderance of probability. Whether the High Court was
justified, by applying the test of preponderance of probability and
concluding that the substance in question is HSD.

Headnotes†
Customs Act, 1962 – ss.111(d) and (m), 112 (a) and (b), 114AA
and 117 – Customs Tariff Act, 1975 – First and Second
Schedules – First Schedule-Import Tariff in Part 2 of the Tariff
Act – Rule 4 – Petroleum Act, 1934 – s.2(c) – The Adjudicating
Authority held that the product in question was not Base
Oil, but HSD and accordingly, ordered confiscation of the
same apart from levying penalties – However, the Appellate
Authority, the Customs, Excise and Service Tax Appellate
Tribunal (CESTAT) held the same to be Base Oil and not HSD,
thus reversing the decision of the Adjudicating Authority – The
High Court reversed the decision of the Appellate Tribunal and
affirmed the decision of the Adjudicating Authority holding
the imported goods to be HSD – Correctness:
Held: 1. High Speed Diesel (HSD) has been defined as any
hydrocarbon oil conforming to the Indian Standards Specification
of Bureau of Indian Standards IS: 1460:2005 – In the instant
case, based on the three laboratory tests and evidence of the
expert opinion, the High Court had concluded that the Customs

* Author
[2025] 3 S.C.R. 1351

Gastrade International v. Commissioner of Customs, Kandla

Authority had been able to prove that the imported product is
HSD by applying the test of preponderance of probability – The
High Court had not referred to the General Rules in arriving at its
conclusion by invoking the “most akin” test as contemplated under
Rule 4 of General Rules for the interpretation of this Schedule
as provided in the First Schedule-Import Tariff in Part 2 of the
Tariff Act – The first report was prepared by Central Excise and
Customs Laboratory at Vadodara – No clear opinion was given in
the first test result by the expert that the samples are indeed that
of HSD or can be treated to be that of HSD – The first test based
on examination of 8 parameters against 21/22 prescribed cannot
be considered to be a definitive opinion to take the view that the
sample is indeed that of HSD – The second test report furnished
by the Central Revenues Control Laboratory, CRCL, New Delhi
on 03.07.2018, the said report indicates that the sample was
tested in respect of 12 out of 21/22 prescribed parameters and
this Court finds that of the aforesaid 12 parameters, at least on 2
parameters, the sample does not appear to fulfil the requirements
of IS 1460:2005 – The second test report does not specifically
state that because of the characteristics ascertained, the samples
can be treated as that of HSD – The third report prepared by the
Central Laboratory of Indian Oil Corporation Limited also does
not give a clear and categorical opinion that the samples tested
indeed are of HSD – The Expert witness also, who undertook the
tests evaded answering the crucial question as to the importance
of the 8 parameters for deciding whether the sample is of HSD or
not – Neither the expert nor the test results stated categorically
that these samples are indeed that of HSD on fulfilment of some
of the parameters – Because of the evasive and non-committal
answers given by the expert witness, the legitimate conclusion
that can be drawn is that his opinion and also the test results
are inconclusive, unclear and cannot be said to be fully reliable
to determine the oil as HSD – In the instant case, the finding
of the High Court is based primarily on applying the test of
preponderance of probability which may not necessarily fulfil the
“most akin” test – The High Court came to the conclusion based
on the incomplete test reports and non-committal opinion of the
expert who in categorical terms had not stated that the imported
goods are HSD – There was no opinion that the imported goods
are most similar to HSD to satisfy the test of “most akin” – The
definitive opinion and finding that the imported goods are “most
1352 [2025] 3 S.C.R.

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akin” to HSD is missing in the reports and opinion for classifying
the imported goods as HSD – Therefore, the results of the test
are inconclusive, so being the opinion of the expert, this Court
disagrees with the conclusion of the High Court – Benefit of
doubt given to appellants because of inconclusive evidence.
[Paras 32, 43, 46, 47, 48, 50, 52, 63, 71, 84, 86, 87]

Evidence Act, 1872 – s.45 – Expert Opinion – Discussed:
Held: The opinion of the experts, however weighty they may be,
are not binding on the court and is only relevant for the court
to consider it to come to a final decision on any fact in issue –
However, since courts are not experts in the discipline of science,
they ordinarily accept the scientific report and act upon it – But
where the expert opinion suffers from certain shortcomings or
ambiguities, lack of clarity, or inadequacy, it would be subject
to judicial scrutiny and it would not be safe to rely wholly on the
same under such circumstances. [Para 57]

Petroleum Act, 1934 – s.2(c) – Flash-point – Classification
of petroleum products – Significance of flash point in
determining whether the petroleum product is HSD or not:
Held: Under Section 2(c) of the Petroleum Act, 1934 flashpoint
of any petroleum has been defined as the lowest temperature at
which it yields a vapour which will give a momentary flash when
ignited, determined in accordance with the provisions of Chapter
II and the rules made thereunder – The Petroleum Act classifies
petroleum products under three categories, depending on the
quantum of flash point – Specification regarding flash point is
accordingly of some significance, even if it may not be the most
important parameter in determining whether a petroleum product
is HSD or not. [Paras 68, 69, 70]

Evidence Act, 1872 – s.3 – Different standards of proof –
Preponderance of probability – Beyond reasonable doubt:
Held: Under Section 3 of the Evidence Act, 1872, a fact is said
to be proved when, after considering the matters before it, the
court either believes it to exist, or considers its existence so
probable that a prudent man ought, under the circumstances
of the particular case, to act upon the supposition that it exists,
which clearly indicates that the Evidence Act does not insist
[2025] 3 S.C.R. 1353

Gastrade International v. Commissioner of Customs, Kandla

upon absolute standard of proof – Evidence Act also nowhere
defines as to the meaning of proof based on “preponderance of
probability” and “beyond reasonable doubt” which are different
standards of proof – Different standards of proof have evolved
in criminal and civil jurisdictions in course of time considering the
differential stakes involved in these proceedings – In a criminal
proceeding, the stakes are higher for a defendant as it involves
precious rights and liberties of the person with a potential to
lose the same if convicted of the offence charged – On the other
hand, civil liability is less blameworthy, and penalty, if any, is less
severe – What the aforesaid decisions postulate is that there may
be varying range in the degree of probabilities – Certainly, where
the proceedings involve requirement of fulfilment of technical/
scientific parameters with confiscatory and penal consequences,
the degree of probability would be of a higher order and not mere
probability. [Paras 75, 76, 78]

Case Law Cited
State of H.P. v. Jai Lal [1999] Supp. 2 SCR 318 : (1999) 7 SCC
280; Dayal Singh v. State of Uttaranchal [2012] 10 SCR 157 :
(2012) 8 SCC 263; M. Siddiq (Ram Janmabhumi Temple-5 J) v.
Suresh Das [2019] 18 SCR 1 : (2020) 1 SCC 1 – relied on.
Collector of Customs, Madras and Others v. D Bhoormall [1974]
3 SCR 833 : AIR 1974 SC 859; A.N. Guha & Co v. Collector
[1996 (86) ELT 333]; R.V.E Venkatachala Gounder v. Arulmigu
Viswesaraswami & V.P, Order dated 08.10.2003 in Civil Appeal
number 10585 of 1996; Durga Oil Company v. State of U.P. [1998]
3 SCR 922 : (1998) 6 SCC 299 – referred to.

List of Acts
Customs Act, 1962; Customs Tariff Act, 1975; Petroleum
Act, 1934.

List of Keywords
The “most akin” test; High Speed Diesel; Base Oil; The principle
of preponderance of probability; Flash point of any petroleum;
Expert Opinion; Standard of proof; Indian Standards Specification
of Bureau of Indian Standards IS: 1460:2005; Classification of
petroleum products; Beyond reasonable doubt.
1354 [2025] 3 S.C.R.

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Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4475 of 2025
From the Judgment and Order dated 20.01.2022 of the High Court
of Gujarat at Ahmedabad in TA No. 299 of 2021
With
Civil Appeal No(s). 4476 and 4477 of 2025

Appearances for Parties
Advs. for the Appellant:
Arvind P. Datar, Sr. Adv., S. Jaikumar, Kartik Jindal, Anant Gautam,
Aashdeep Kaur, Rajesh Kumar Gautam.
Advs. for the Respondent:
N. Venkataraman, A.S.G., Gurmeet Singh Makker, Rupesh Kumar,
Adit Khorana, Ms. Aakanksha Kaul, Udai Khanna, Navanjay
Mahapatra, Mukesh Kumar Maroria.

Judgment / Order of the Supreme Court

Judgment

Nongmeikapam Kotiswar Singh, J.

Delay condoned in Special Leave Petition arising out of Diary
No.32623 of 2024. Leave granted in all the Special Leave Petitions.
2. The issue involved in this batch of appeals is, whether, the imported
goods is to be treated as Base Oil as claimed by the appellants or
High Speed Diesel (HSD) as determined by the Customs Authorities,
which is contested by the appellants. If the product is treated as HSD,
it would be a prohibited item that could not have been imported by a
private entity other than a State Trading Enterprise, in which event
it would be liable to be confiscated and penalty be imposed on the
appellant importers.
3. The Commissioner of Customs, the Adjudicating Authority held
vide order dated 03.12.2019 that the said product is not Base Oil,
but HSD and accordingly, ordered confiscation of the same apart
from levying penalties. On the other hand, the appellate authority,
the Customs, Excise and Service Tax Appellate Tribunal (CESTAT)
[2025] 3 S.C.R. 1355

Gastrade International v. Commissioner of Customs, Kandla

held the same to be Base Oil and not HSD, thus reversing the
decision of the Adjudicating Authority. On being challenged before
the High Court of Gujarat, by the Customs Authorities, the High
Court reversed the decision of the Appellate Tribunal and affirmed
the decision of the Adjudicating Authority holding the imported
goods to be HSD.
4. In order to appreciate the issues in proper perspective, a brief
reference of the relevant facts may be necessary.

Facts in brief
5. The three appellants, M/s Gastrade International, M/s Rajkamal
Industrial Pvt Ltd and M/s Divinity lmpex imported the goods from
UAE by sea per vessel ‘’Al Heera” which was docked at Kandla
Port. The importers declared the goods as “Base Oil SN 50” seeking
clearance of the same under Chapter Heading 27101960, which is for
Base Oil. On the basis of the Intelligence Report, the Directorate of
Revenue Intelligence (“DRI”), classifying the said cargo as HSD under
Chapter Heading 27101930, which is prohibited from being imported
except only by State Trading Enterprises, seized the said cargo. As
per Import Policy ITC (HS), 2017, High Speed Diesel (HSD) and Low
Diesel Oil (LDO) are covered under the EXIM Code 27101930 and
27101940 and in terms of policy as notified under Notification dated
20.05.2015 issued by the DGFT Department of Commerce, these
items could be imported only by the State Trading Enterprises and
thus, not by appellants. The samples of the seized goods were sent
to Central Excise and Customs Laboratory at Vadodara for testing
which returned the report on 11.05.2018 with the finding that the
samples drawn from the seized goods had characteristics of High
Speed Diesel Oil/Automative Fuel Oil conforming to IS 1460: 2005
in respect of 8 parameters and that the samples were “other than
Base Oil”. The appellant-importers contested the said test report
and the requested the Customs authorities for retesting the samples
at the Central Revenues Control Laboratory (CRCL), New Delhi or
Indian Institute of Petroleum, Dehradun. Accordingly, the samples
were sent to CRCL.
6. The Central Revenues Control Laboratory to which the samples were
again sent also submitted a report dated 03.07.2018 with the finding
that the samples conform to the specifications of HSD Oil (Automotive
1356 [2025] 3 S.C.R.

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Diesel Fuel) as per IS 1460: 2005 in respect of 10 parameters and
each of the samples is “other than Base Oil”.
7. Not satisfied with the aforesaid results, one of the appellants,
M/s Rajkamal Industrial Pvt. Ltd. approached the High Court of
Gujarat by filing a Special Civil Application No. 10882 of 2018 in
which the High Court passed an interim order on 30.07.2018 directing
the Department to send requisite quantity of samples to the Indian
Oil Corporation Ltd. (IOCL), Mumbai which is one of the notified
laboratories as per the Department’s circular dated 16.11.2017.
8. The samples were accordingly sent to the Central Laboratory, Indian
Oil Corporation Limited in Mumbai which submitted the report dated
14.08.2018 stating that the sample had been tested as per Indian
Standard 1460: 2005 and the sample met 14 parameters as per the
laboratory capability out of prescribed 21 parameters in terms of the
specification IS: 1460: 2005.
9. The DRI, thereafter, issued show cause notices to the appellants on
24.04.2019 alleging improper classification. In the said show cause
notices, it was stated that the imported goods are classifiable as
HSD under CTH 27101930, that the imported goods were liable to
be confiscated under Sections 111(d) and (m) of the Customs Act,
1962 ( for short, “Act”) and that penalties are liable to the imposed
under Sections 112(a) and (b) of the Act and the Directors of the
appellant-companies were also liable to be imposed penalties under
Sections 112(a) and (b), Section 114AA and the Section 117 of the Act.
The show cause notices also stated that the earlier imports were
liable to be classified as Light Diesel Oil under CTH 27101940
and these were also liable to be confiscated under Sections 111(d)
and (m) of the Act and penalty be imposed under Sections 112 (a)
and (b) and Section 114AA of the Act.
Show cause notice was also issued to the buyer, in respect of the
appellant – Gastrade International Pvt. Ltd., of the earlier imported
goods stating that the earlier imports were LDO under CTH 27101940
and were liable to be confiscated under Sections 111(d) and (m)
of the Act and penalties were liable to be imposed under Section
112(b). Show cause notice was also issued to the exporters of the
said goods as to why penalty should not be imposed on them under
Sections 112(a) and (b), 114AA and 117 of the Act.
[2025] 3 S.C.R. 1357

Gastrade International v. Commissioner of Customs, Kandla

Finding by the Adjudicating Authority
10. After considering the replies furnished by the parties and considering
the evidence, both oral and documentary, relied upon, and hearing
the parties, the Adjudicating Authority, the Principal Commissioner
of Customs, Custom House, Kandla passed the Orders-in-Original
No. KND-CUSTM-000-COM-12-2019-20 dated 05.12.2019, KND-
CUSTM-000-COM-13-2019-20 dated 05.12.2019, and KND-CUSTM-
000-COM-14-2019-20 dated 05.12.2019, rejecting the claim of the
appellants and upholding the departmental findings. In the course
of the enquiry and hearing conducted by the Adjudicating Authority,
one of the experts, namely Dr. Gobind Singh, Manager (Lab), IOCL
Central Laboratory, Mumbai was also examined.
11. The Adjudicating Authority concluded that as per the findings of
the three independent laboratories of repute, the samples meet the
parameters specified under IS 1460:2005 prescribed for High-Speed
Diesel, a hydrocarbon oil and the importers could not produce any
authentic or authoritative literature about what is Base Oil SN 50 and
thus failed to prove that the goods imported were Base Oil falling under
Chapter 27101960 of Customs Tariff Act, 1975 (for short, “Tariff Act”).
12. The Adjudicating Authority also repelled the contention of the
appellants that since IOCL had tested only 14 out of 22 parameters
for IS 1460:2005, and thus, all the parameters had not been tested,
it cannot be said that the sample is of HSD. It was also held that
the appellants could not point out which of these remaining eight
parameters will not be satisfied if tested.
13. Accordingly, the Adjudicating Authority held that the goods were liable
to confiscation under Sections 111 (d) and (m) of the Act. The Directors
of the appellants were held liable for penalty under Sections 112(a)
and 114AA of the Act. However, granting permission to the appellants
to redeem the confiscated goods for re-export on payment of fine.
14. Being aggrieved by the aforesaid orders in original passed by the
Adjudicating Authority, the appellants preferred appeals before the
Custom Excise Service Tax Appellate Tribunal (CESTAT).

Finding by the Appellate Authority (CESTAT)
15. According to the CESTAT, as per the statutory definition provided
in the Tariff Act which needs to be construed strictly, only such
1358 [2025] 3 S.C.R.

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hydrocarbon oil that conforms to the Indian Standard Specification
IS1460:2005 can be classified as HSD. As per the said specification,
21/22 parameters have been mentioned and no exception has
been provided to the effect that if any or some of the parameters
out of 21/22 parameters are not met, even then the product will be
determined as HSD. According to CESTAT, only such product that
meets all the 21/22 parameters as specified in IS 1460:2005 can
be qualified as HSD. The CESTAT held that in the present case,
since eight parameters were not tested, it cannot be said that the
product is conforming to IS 1460:2005, and if it is not conforming to
IS 1460:2005, it does not fall within the definition of HSD as provided
under Supplementary Note of Chapter 27.
The CESTAT also held that the burden is on the Department to
establish the classification of goods as HSD, which conforms to IS
1460:2005, and in the absence of testing of all the parameters, it
can be only an assumption of the Department that on the basis of
14 parameters, a product can be classified as HSD.
16. The CESTAT also took the view that the test report of IOCL Laboratory
is not conclusive. The CESTAT was of the opinion that the expert,
Dr. Gobind Singh who was examined had not considered that the
flash point is an important parameter for testing the goods and he
could not give any firm opinion as regards the parameter of flash
point. The CESTAT held that the test conducted by Dr. Gobind Singh
of IOCL cannot be considered to be conclusive to determine that the
product is HSD. The CESTAT was of the view that in the present
case as the flash point tested was above 93°C, the goods cannot be
classified as HSD. The CESTAT also held that the Department had
with a predetermined mind got the goods tested for HSD, whereas
the said goods should have been tested as to whether these are
Base Oil or not, and only when the parameters are not met for Base
Oil then the Department could have resorted to carrying out the test
for classifying the goods either under HSD or any other classification.
17. The CESTAT held that even if the product is not Base oil, since it
was not proved by the Department beyond doubt that the impugned
goods are HSD, the case of the Department would fail.
18. Accordingly, the CESTAT held that the goods are not classifiable as
HSD under CTH 27101930. Consequently, the claim of the appellants
for classification of goods as Base Oil under CTH 271019160 was
[2025] 3 S.C.R. 1359

Gastrade International v. Commissioner of Customs, Kandla

maintained and in view of the submission made by the appellants
that irrespective of the decision of the classification, they would seek
permission to re-export, the appellants were allowed to re-export
the goods and the CESTAT set aside the order of confiscation,
imposition of penalty and the redemption fine by the Department
vide a common order dated 28.09.2021 passed in the aforesaid
Customs Appeal No.10240 of 2020, Customs Appeal No.10291 of
2020 and Customs Appeal No.10298 of 2020.
19. Being aggrieved by the aforesaid decision of the CESTAT, the
Department preferred three appeals before the High Court of Gujarat,
which were registered as Revenue Tax Appeal No.297 of 2021,
Revenue Tax Appeal No. 298 of 2021 and Revenue Tax Appeal
No.299 of 2021, which were allowed by a common judgement and
order dated 20.01.2022 passed by the High Court, which is the
subject matter of challenge in this batch of appeals.

Finding by the High Court
20. Before the High Court, the issue of maintainability of the appeals
under Section 130 of the Act was raised, which was decided in favour
of the Department. However, the appellants have not pressed this
issue before us and as such we make no observation about the
decision, and we confine our consideration only on the issue as to
whether the High Court was correct in concluding that the imported
oil is not Base Oil as claimed by the appellant-importers and is HSD
as classified by the Department.
21. The High Court noted that though it would appear that what had
been decided by the Tribunal could be termed as a question of fact,
and whether the subject goods fall within one category or the other
would essentially be a question of fact, yet while deciding the same,
if the Tribunal overlooks certain basic principles of law applicable to
the case on hand and records findings which could be termed as
perverse, then definitely such a decision of the Tribunal would give
rise to a question of law and hence maintainable.
The High Court thereafter proceeded to examine the materials on
record.
22. Coming to the evidence of Shri Gobind Singh, Manager (Lab), IOCL
Central Laboratory, Mumbai, the High Court observed that a plain
reading of the statement and cross-examination of Dr. Gobind Singh
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would indicate that the expert in no uncertain terms had made himself
clear that all the 14 tests which were carried out revealed only one
thing that the sample was of High-Speed Diesel, and not Base Oil
as asserted by the assessees.
The High Court also noted that the expert was honest enough to
admit that the IOC laboratory was equipped to conduct only 14 tests
and it had no facility or means to conduct the remaining seven tests.
The High Court then considered whether the analysis could be said
to be complete or conclusive as regards the nature of the sample
only if all the 21 tests were undertaken, more particularly when the
expert had asserted that all the 14 tests carried out indicated only
one thing that the sample analysed was that of High Speed Diesel.
23. The High Court went on to observe that it is not in dispute that
the onus of establishing that the sample meets the specification
IS1460:2005 lay upon the Customs Authority, and the burden of
proof is on the Authority to show that the particular goods or item in
question is taxable in the manner claimed by them. According to the
High Court, there should be material to enter an appropriate finding
in that regard and the material may be either oral or documentary,
and it is for the Authority to lay evidence on that behalf even before
the Adjudicating Authority.
24. The High Court went on to observe relying on the decisions of
this Court in Collector of Customs, Madras and others Vs.
D Bhoormall, AIR 1974 SC 859; A.N. Guha & Co Vs. Collector
[1996 (86) ELT 333]; R.V.E Venkatachala Gounder Vs. Arulmigu
Viswesaraswami & V.P. [Order dated 08.10.2003 in Civil Appeal
number 10585 of 1996] that the Department is not required to prove
its case with mathematical precision to a demonstrable degree and
legal proof is not necessarily a perfect proof.
25. It was observed by the High Court that so long as the Department has
been able to establish its case with such a degree of preponderance,
the existence of fact could be said to have been proved. The High
Court observed that the only ground on which the Tribunal interfered
with the findings recorded by the Adjudicating Authority was that the
laboratories were not in a position to conduct all 21 tests. According
to the High Court, the Tribunal ignored the fact that all the tests
carried out in three different laboratories revealed only one thing that
the sample showed the characteristics of HSD. The High Court then
[2025] 3 S.C.R. 1361

Gastrade International v. Commissioner of Customs, Kandla

observed that if the Department was able to lead evidence to this
extent, the onus thereafter shifted upon the assessee to establish
that these tests cannot be said to be conclusive of the fact that the
subject good is HSD. However, no such attempt had been made
by the assessees.
26. The High Court further went on to observe that it was not at all
convinced with the findings recorded by the Tribunal. The High
Court held that the Tribunal could be said to have ignored the
material evidence in the form of the three test reports of three
different laboratories, certifying the samples to meet the specification
IS1460:2005 and assessees have not been able to show anything
based on which the High Court can take the view that if all the
prescribed 22 tests are not carried out, the report would remain
incomplete and would not be admissible in evidence or would not
be conclusive of the nature of the sample.
27. The High Court observed that if these 14 tests indicate the sample
to be one of the HSD, this evidence could not have been discarded,
ignored or overlooked only on the ground that seven other tests
could not be undertaken by the laboratories because of lack of
adequate facility to conduct these seven tests. According to the High
Court, to say so would require the Department to prove its case with
mathematical accuracy and beyond reasonable doubt. Accordingly,
the High Court allowed the appeals preferred by the Department
and set aside the order of the CESTAT.

Consideration by this Court
28. From the above three decisions of the Adjudicating Authority, the
Appellate Authority (CESTAT), and the High Court, it is quite evident
that their decisions primarily hinged upon the reports of the three
laboratories, namely, Central Excise and Customs Laboratory at
Vadodara, Central Revenues Control Laboratory (CRCL), New Delhi
and Central Laboratory, Indian Oil Corporation Limited, Mumbai
where the samples of the questioned goods were sent for testing as
to whether these conformed to the Indian Standards Specification
of Bureau of Indian Standards IS: 1460:2005. All three fora also
referred to the expert evidence of Dr Gobind Singh.
29. Considering the different conclusions arrived at by the three fora
on the same set of the results of the tests conducted by three
1362 [2025] 3 S.C.R.

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different laboratories, it would be necessary to examine these tests
to understand how these fora had arrived at their conclusions.
30. Since the reference point of these tests is Indian Standard
Specification of the Bureau of Indian Standards, IS1460:2005, which
prescribes the specifications for HSD under the Tariff Act, it would
be necessary to refer to these parameters before we proceed to
examine the implications of the results of the three tests and arrive
at the correct conclusion.
31. Section 2 of the Tariff Act provides the rates at which duties of
customs shall be levied under the Customs Act as specified in the
First and Second Schedules to the Tariff Act.
Chapter 27 of the First Schedule to the Tariff Act deals with the
rate of duties leviable in respect of mineral fuels, mineral oils, and
products of their distillation; bituminous substances; mineral waxes.
Supplementary Note to Chapter 27 defines various kinds of oils
specifying the attributes to these, including that of HSD. Accordingly,
relevant portions of this Supplementary Note are reproduced
hereunder for easy reference.
“SUPPLEMENTARY NOTES:
In this Chapter the following expressions have the
meanings hereby assigned to them:
a) Motor Spirit means any hydrocarbon oil (excluding
crude mineral oil) which has its flashpoint below 250C
and which either by itself or in admixture with any other
substance, is suitable for use as fuel in spark ignition
engines. “Special boiling point spirits (subheadings 2710
12 11, 2710 12 12 and 2710 12 13) means light oils, as
defined in Chapter Note 4, not containing any anti-knock
preparations, and with a difference of not more than 600C
between the temperature at which 5% and 90% by volume
(including losses) distil;
b) “Natural gasoline liquid (NGL)” is a low–boiling liquid
petroleum product extracted from Natural Gas;
c) “Superior kerosine Oil (SKO)” means any hydrocarbon
oil conforming to the Indian Standards Specification of Bu-
reau of Indian Standards IS:1459-1974 (Reaffirmed 1996);
[2025] 3 S.C.R. 1363

Gastrade International v. Commissioner of Customs, Kandla

d) “Aviation turbine fuel (ATF)” means any hydrocarbon
oil conforming to the Indian Standards Specification of
Bureau of Indian Standards IS:1571:1992:2000;
e) “High-speed diesel (HSD)” means any hydrocarbon oil
conforming to the Indian Standards Specification of Bureau
of Indian Standards IS: 1460:2005;
f) “Light diesel oil (LDO)” means any hydrocarbon oil
conforming to the Indian Standards Specification of Bureau
of Indian Standards IS: 15770:2008;
g) “Fuel oil means any hydrocarbon oils conforming to
the Indian Standards Specification of Bureau of Indian
Standards IS:1593:1982 (Reaffirmed in the year 1997);
h) “Lubricating oil” means any oil, which is ordinarily used,
for lubrication, excluding any hydrocarbon oil, which has
its flash point below 93.30 Centigrade;
i) “Jute batching oil” and “textile oil” are hydrocarbon oils
which have their flash point at or above 93.30C, and is
ordinarily used for the batching of jute or other textile fibres;
j) The expression “petroleum jelly crude” (subheading 2712
10 10) by the ASTM D 1500 method
k) For the purposes of these additional notes, the tests
prescribed have the meaning hereby assigned to them
1) “Flash Point” shall be determined in accordance with
the test prescribed in this behalf in the rules made under
the Petroleum Act, 1934 (30 of 1934);
2) …………………………………………………..
………………………………………………………
5) …………………………………………………..
32. Thus, High Speed Diesel (HSD) has been defined as any hydrocarbon
oil conforming to the Indian Standards Specification of Bureau of
Indian Standards IS: 1460:2005.
33. As regards the Indian Standards Specification of Bureau of
Indian Standards IS1460:2005 relating to High Speed Diesel, the
specifications provided are as follows:
1364 [2025] 3 S.C.R.

Supreme Court Reports

EURO IV/BHARAT STAGE IV EMISSION NORMS COMPLAINT –
SPECIFICATION FOR AUTOMOTIVE DIESEL FUEL

Sl No. Characteristics Requirements Test Method
[P:] of IS 1448/
ISO/ASTM
(1) (2) (3) (4)
i) Acidity, inorganic Nil [P : 2]
ii) Acidity, total, mg of To Report [P : 2]
KOH/g, Max
iii) Ash, percent by 0.01 [P : 4]/ISO
mass, Max 6245
iv) Carbon residue 0.30 [P : 8]/ISO
(Ramsbottom) on 10370
10 percent residue1),
percent by mass,
Max
v) Cetane number, Min 512) [P : 9]/ISO
5165
vi) Cetane index, Min 462) D 4737/ISO
4264
vii) Pour point3), Max: [P : 10]/D 5949
or D 5950 or D
5985
a) Winter 3° C
b) Summer 15 C
viii) Copper strip Not worse than [P : 15]/ISO
corrosion for 3 h at No. 1 2160
50°C
ix) Distillation, percent 95 [P : 18]/ISO
v/v, recovered at 3405
360°C, Min
x) Flash point* :
a) Abel, °C, Min 35 [P : 20]
b) Pensky Martens 66 [P : 21]
closed cup , °C, Min
4)
[2025] 3 S.C.R. 1365

Gastrade International v. Commissioner of Customs, Kandla

xi) Kinematic viscosity, 2.0 to 4.5 [P : 25]/ISO
cSt, at 40°C 3104
xii) Sediment, percent - [P : 30]
by mass, Max
xiii) Total contamination, 24 EN 12662
mg/kg, Max
xiv) Density at 15°C5), 820-845 [P : 16] or [P :
kg/m3 32]6)/D 4052/
ISO 3675 or
ISO 12185
xv) Total sulphur7), mg/ 50 ISO 20846 or
kg, Max ISO 20847 or
ISO 20884/ [P
: 83]/D 5453/ D
2622/D 4294/
[P : 34]8)
xvi) Water content, mg/ 200 ISO 12937
kg,

xvii) Cold Filter Plugging [P : 110]/D
Point (CFPP)3), Max: 6371
a) Winter 6°C
b) Summer 18°C
xviii) Oxidation stability9), 25 ISO 12205 or
g/m3, Max ASTM D 22749)
xix) Polycyclic Aromatic 11 IP 391 or EN
Hydrocarbon (PAH), 12916
percent by mass,
Max

xx) Lubricity corrected 460 ISO 12156-1/
wear scar diameter Cor 1
(wsd 1.4) at 60°C,
microns, Max
xxi) Oxygen content10), 0.6 Annex B
percent by mass,
Max
1366 [2025] 3 S.C.R.

Supreme Court Reports

1) This limit is applicable prior to addition of ignition improvers,
if used. In case a value exceeding the limit is obtained on
finished fuels in the market, ASTM D 4046/ISO 13759 shall
be used to establish the presence of nitrate containing
compound. In such case the present limit for carbon
residue cannot be applied. However, the use of ignition
improver does not exempt the manufacturer from meeting
this requirement prior to the addition of additives.
2) For Fuel processed from Assam crude, Cetane number
and Cetane index is relaxed by 3 units.
3) Winter shall be the period from November to February in
central and northern plains of India (both months inclusive)
and rest of the months of the year shall be called as
summer.
4) Applicable for Naval applications and fishing vessels
requiring High Flash Automotive Diesel Fuel.
5) For fuel processed from Assam crude, the density range
is relaxed to 820-855.
6) In case of dispute, IS 1448 [P : 32] shall be the referee
test method.
7) For Automotive Diesel Fuel supplied to Indian Navy, the
limit of sulphur shall be in agreement between the buyer
and the supplier.
8) In case of dispute, IS 1448 [P : 34] shall be the referee
test method.
9) This test shall be carried out only at the refinery or
manufacturer’s end. In case of dispute, ASTM D 2274
shall be the referee method.
10) Shall be applicable only for Automotive Diesel Fuel blended
with 5 percent (v/v) Bio-diesel conforming to IS 15607 and
the limit shall proportionately vary as and when the different
blending percent of Bio-diesel is permitted.
…..
…..
[2025] 3 S.C.R. 1367

Gastrade International v. Commissioner of Customs, Kandla

34. It may be relevant herein to mention that flash point has been defined
under Section 2 (c) of the Petroleum Act, 1934 as follows:
“2 (c) ‘Flash-point’ of any petroleum means the lowest
temperature at which it yields a vapour which will give a
momentary flash when ignited, determined in accordance
with the provisions of Chapter II and the rules made
thereunder;”
35. We will now examine the results of the three tests conducted by the
three laboratories, which are reproduced as follows:-
1. Central Excise and Customs Laboratory at
Vadodara.
Report dated 11.05.2018.
Lab No. RCL/AH/DRI/216/07.05.2018
TANK NO. 1
Report
The sample is in the form of light pale yellow colored
liquid. It is composed of mineral hydrocarbon oil having
following characteristics:-
1. Flash point (PMCC) = Above 66°
2. ASH Content = Nil
3. Acidity= NIL
4. Water Content= NIL
5. Density at 15° = 0,8301 g/ml
6. Distillation recovery
a. At 350° = more than 85%
b. At 360° = more than 95%
7. Kinetic viscosity at 40° = 3.80 CST
8. Sediment = NIL
In view of the above analytical parameter the sample has
characteristics of high speed diesel oil/Automotive Fuel
Oil confirming to IS: 1460:2005 & amended thereafter in
terms of parameters 1 to 8 mentioned above.
1368 [2025] 3 S.C.R.

Supreme Court Reports

It is other than base oil
Sealed remnant returned

Dispatch No. 177
Sd/-
Date:11.05.2018
11.05.2018
Pradeep Maroo
Chemical Examiner Grade-II
Seen
Deepali
02/07/2018

2. Central Revenues Control Laboratory (CRCL),
New Delhi.
Report dated 03.07.2018.
Government of India
Ministry of Finance, Department of Revenue Central Board
of Indirect Taxes & Customs Central Revenues Control
Laboratory Hillside Road, Pusa, New Delhi-110012
Tel.:011-21520123/25843494, Fax: 011-25843495
Email: dir.crcl-cbec@nic.in Website: http://crcl.gov.in
____________________________________________
F.No.-27-Cus/C-05 to 14/2018-19 Dated: 03.07.2018

To
The Additional Director,
Directorate of Revenue Intelligence,
Ahmedabad Zoal Unit,
No. 15, Magnet Corporate Park,
100 ft Thaltej-Hebatpur Road.
Near Sola Flyover, Thaltej,
Ahmedabad-380054
Sub. : Testing of samples declared as Base Oil
SN 50- reg.
[2025] 3 S.C.R. 1369

Gastrade International v. Commissioner of Customs, Kandla

Please refer to your letter F. No. DRIAZU/CI/ENQ-l2/2018
dated 06.06.2018 on the subject cited above forwarding
therewith 10 samples described as Base Oil SN 50
pertaining to B/E No. 6252179, 6251273, 6251276.
6251277, 6251258. 6251267. 6251268, 6252184, 6251270
and 6251278 all dated 04.05.2018 and TM No. 1A to 1OA
dated 06.06.2018 for retesting.
The samples u/r have been registered here under Lab
Nos. CLR-05 to CLR 14 dated 14.06.2018 respectively.
The samples have been analyzed and Test reports are
as under:-
Report:-
Each of the ten samples is in the form of pale yellow
colored liquid. Each is composed of mineral hydrocarbon
oil, having more than 70% mineral hydrocarbon oil and
possesses following characteristics:-

Test Results of the samples

Lab No. CLR- CLR- CLR- CLR- CLR- CLR- CLR- CLR- CLR- CLR-
05 06 07 08 09 10 11 12 13 14

TM Mo. 1A 2A 3A 4A 5A 6A 7A 8A 9A 10A

Characteristic Limit as per
IS 1460:2005
and amended

Acidity. Inorganic Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil

Acidity, total mg of To report 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05
KOH/g

Ash percent by mass 0.01 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
(max.)

Carbon residue 0.30 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01
(Ramx bottom) on (mat.)
10% resdue percent
by mass

Density at 15°C 0.8200 .8287 .8316 .8310 .8288 .8284 .8286 .8286 .8282 .8284 .8281
0.8450

Flash Point (PMCC) 66° (min.) 113°C 115°C 93°C 88°C 98°C 100°C 95°C 78°C 106°C 111°C

Kinematic 40°C, cSI 2.0 to 4.5 3.7 4.4 4.4 4.4 4.0 3.9 3.5 4.1 4.0 4.0
1370 [2025] 3 S.C.R.

Supreme Court Reports

Kinematic Viscosity - 4.3 4.9 4.8 4.7 4.7 4.3 4.3 4.3 4.3 4.3
37.8°C

Distillation range, °C 95 238- 234- 234- 238- 240- 238- 240- 240- 240- 238-
356 358 352 354 356 344 354 350 342 325

Percent v/v
Recovered ot 360°C 356°C 358°C 352°C 354°C 356°C 344°C 354°C 350°C 342°C 325°C

95% volume
recovered at

Pour Point, Max 3°C 8°C 8°C 8°C 8°C 8°C 8°C 8°C 8°C 8°C 8°C
15°C

a) Winter

b) Summer

Cetaile Index 46 (min.) 65.7 66.0 65.6 66.2 66.0 66.5 66.6 66.6 67.0 67.7

Water content, 200 (max.) Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
percent v/v mg/kg

On the basis of above analytical parameters, each of the
ten samples conforms to the specifications of High Speed
Diesel Oil/ (Automotive Diesel Fuel as per IS 1460:2005
and further amended).
Each is other than Base Oil.
Sealed remnants are returned separately.
Sd/-
03.07:2018
(K. C. Agrawal)
Joint Director
Copy to: The Chemical Examiner Gr-I (I/e) Central Excise
& Customs Laboratory, Vadodara.

3. Central Laboratory, Indian Oil Corporation
Limited, Mumbai.
Report dated 14.08.2018
Indian Oil Corporation Limited
Central Laboratory
“K” Oil H Installation. Sewri (East), Mumbai-400 015
Telefax 0222416 3062 (D). 022 2292 4761
Marketing Division
[2025] 3 S.C.R. 1371

Gastrade International v. Commissioner of Customs, Kandla

QUALITY CONTROL TEST REPOT FOR HIGH SPEED DIESEL
SPECIFICATION NO. IS:1460-2005 AMENDED NO.2
MARCH 2010
Test Required High Speed Diesel Analysis
Test Report No. & Date LSE/3791/2018 dated
14/08/2013
Name of Customer Directorate 01 Revenue
Intelligence, Ahmedabad
Source of Sample 7S (Composite), Vessel MT. AL
HEERA
Sample Drawn By Jointly by Representative of
DRI, Ahmedabad
Seal No. Glass bottle sealed with Lead
Seal (Yellow tag with Panchas
signature)
Date of Sampling 05/05/2018
Date of Sample Received 09/08/2018
Reason for Testing AS per letter ref. DRI/AZU/CI/
ENQ-12(INT 02/2018/2018:
dated 08/08/2018. Goods
declared as “Base Oil SN 50-IN
Bulk” to be tested as per High
Speed Diesel Specification IS
1460:2005 amended.

SL. CHARACTERISTICS REQUIREMENTS TEST METHOD RESULTS
No (P) of IS:1448/
ISO/ASTM
I. Acidity, inorganic Nil P:2 Mil
II Acidity, total, mg of To report P:2 0.06
KOH/g, Max
III Ash, percent by mass, 0.01 P:4 0.002
Max
IV Carbon residue (Rams 0.30 P:8 0.03
bottom) on 10 percent
residue, percent by
mass, Max
1372 [2025] 3 S.C.R.

Supreme Court Reports

V Cetane Number, Min. 51 P:9 FNA
VI Cetane index, Min 46 D-4737 66.9
VII Pour Point, Max: 3°C/15°C P:10 3
(a) Winter/(b) Summer
VIII Copper strip corrosion Not worse than P:15 1a
for 3 hrs at 50°C No.1
IX Distillation, % v/v, 95 P:18 95
recovered at 360”C,
Min
X Flash Point: 35 P:20 --112
a) Abel°C Min 66 P:21
b) Pensky martens
closed cup, °C, Min
XI Kinematic viscosity, 2.0 to 4.5 P:25 3.997
cSt, at 40 C
XII Sediment, percent by - P:30 0.02
mass, Max
XIII Total Contamination, 24 EN 12662 FNA
mg/Kg, Max
XIV Density at 15°C, kg/m3 820-845 P:16 829.5
XV Total Sulphur, mg/kg, 50 D-4294 37
Max
XVI Water content, mg/kg, 200 ISO-12937 75
Max
XVII Cold Filter Plugging 6°C/18”C P:110 FNA
Point °C (CFPP), Max,
(a) Winter/(b) Summer
XVIII Oxidation Stability, g/ 25 ISO:12205 FNA
m3
XIX Policyclic Aromatic 11 IP-391 FNA
Hydrocarbon (PAH), %
m, Max
XX Lubricity Corrected 460 ISO:12156-1 FNA
Wear Scar Dia @
60°C, microns, Max
XXI Oxygen Content, % m, 0.6 Annex. B- FNA
Max
[2025] 3 S.C.R. 1373

Gastrade International v. Commissioner of Customs, Kandla

REMARKS:
1. FNA: Stands for “Facility Not Available”
2. Flash point test was first done by Abel apparatus but,
since it was more than 66°C, it was done by PMCC.
3. As stated in Point no. 6 of your letter No. DR1/AZU/
CI/ENQ-l2(INT-02/2018)/2018 dated 08/08/2018 stating
as per the order of the Hon’ble High Court of Gujarat.
this sample has been tested as per Indian Standard 15:
1460:2005 as amended & under this specification there
are total XXI tests covered out of which we have
tested only XIV parameters as per our lab capability.
4. This sample meet the specification for only XIV
parameters tested at our lab as per the specification
IS:l460:2005 amended.

NOTE

1. This test report refers only to the particular sample
submitted for testing. Results relate to sample as
received.
2. This test report shall not be reproduced except in
full, without the written approval of the laboratory.
3. Form No: QF/OPN/07
4. The test results reported are valid at the time of &
under stated conditions of the test.
--- - End of test report------
Tested by
Sd/-
Dr. Gobind Singh
Manager (Lab).
Indian Oil Corporation Limited.
14.08.2018
Reviewed by
Sd/-
14.08.2018
1374 [2025] 3 S.C.R.

Supreme Court Reports

36. Apart from the aforesaid three test results, all three forums had also
referred to the evidence of the expert, namely, Dr. Gobind Singh,
Manager (Lab), IOCL Central Laboratory, Mumbai, more specifically
to his cross-examination, while arriving at the respective conclusions.
Hence, it may be apposite to reproduce the same as below:
(i) The cross-examination of Shri Singh at the instance
of M/s. Rajkamal Industrial Pvt. Ltd., is as under:
“(Before the Principal Commissioner of Customs,
Custom House, Kandla)
Cross Examination of Shri Gobind Singh, Manager
(Lab), IOCL, Central Laboratory, Mumbai in the matter
of SCN F. No.DRI/AZU/CI/INQ-12(INT-2/2018 dated
22.04.2019 issued to M/s. Rajkamal Industrial Pvt Ltd
& Others by Shri Hardik Modh, Advocate.
Q: What is your name?
A: Dr. Gobind Singh.

Q: Where have you been working and for how long?
A: I have been working in IOCL at Sewree at Mumabi
since 2012.

Q: How many samples have you tested in respect
of petroleum products?
A: I have tested large number of samples running
into hundreds of samples.

Q: Are you aware of letter dated 04.08.2018 written
by the Assistant Director of DRI whereby it was
requested to Mr. Vivek W. Sawant, DGM, IOCL to
test the samples as requested under test memo in
accordance with the parameters prescribed under IS
1460:2005 for “High Speed Diesel” and to categorize
the identity of the goods. Had you tested these good
only to ascertain whether the parameters prescribed
under Indian Standard IS 1460:2005 for High Speed
Diesel?
A: Yes.
[2025] 3 S.C.R. 1375

Gastrade International v. Commissioner of Customs, Kandla

Q: As per the letter dated 04.08.2018, you were
requested to verify whether the samples were HSD
as per IS 1460:2005. Have you followed these
instructions?
A: Yes.

Q: Have you signed the test reports annexed with
“Relied upon Documents” as Sr. No.25 to the Show
Cause Notice dated 22.04.2019?
A: Yes.

Q: What does it mean ‘reviewed by’?
A: The samples were tested by me and checked,
supervised and signed by my senior at the lab.

Q: Table I of IS 1460:2005 provides total 22
parameters are to be tested for ascertaining whether
the sample meets with the criteria of HSD?
A: The Sample meets with the specification IS
1460:2005 for the parameters tested at our laboratory
which are 14 parameters tested as per our lab
capabilities.

Q: Does it mean that the other 8 parameters are not
important for ascertaining or deciding whether the
sample meets with the criteria of HSD?
A: Already provided in the report that in the lab the
samples were tested as per IS 1406:2005 and there
is facility available only for testing of 14 parameters
and for the remaining 8 parameters, the facility is not
available for which I can’t comment.

Q: Do you know the function/characteristics of the 8
parameters provided under IS 1406:2005 that have
not been tested?
A: As the 8 parameters have not been tested, I can’t
comment in respect of these parameters.
1376 [2025] 3 S.C.R.

Supreme Court Reports

Q: On perusal of report, have you concluded that
it meets with the criteria of high speed diesel of IS
1460:2005?
A: Again, it is submitted in the report that the samples
tested for 14 parameters as per IS 1406:2005, at the
lab which itself is for high speed diesel?

Q: In respect of Flash Point, two methods are
prescribed, Abel as well as PMCC. Remark No.2
of test report provides that flash point was tested
by Abel apparatus method but since it was more
than 66°C, sample was tested by PMCC. In which
situation, sample of HSD is required to be tested at
Abel method and PMCC method?
A: If the temperature is above 66°C then PMCC is
required and if the temperature is below 66°C than
it is required to do with Able method.

Q: Do you think so one of the ingredients for
considering HSD is flashpoint?
A: Can’t comment on ingredients. The minimum
temperature for Flash Point 35°C as prescribed in
standard. We have submitted the report.

Q: What is the maximum and minimum flashpoint for
considering the sample as HSD?
A: Only the minimum limit is talked about that is
35°C and there is no maximum limit prescribed in
the standard.

Q: If case, the Flash Point exceeds above 100°C,
150°C, 200°C etc., then does it still pertains to HSD
standard?
A: Can’t comment as above 35°C whatever the Flash
Point is, it does not matter.
Q: Point No.1 of supplementary note of Chapter 27
of Customs Tariff Act provides that “Jute Batching
[2025] 3 S.C.R. 1377

Gastrade International v. Commissioner of Customs, Kandla

Oil”, “Textile Oil” are Hydrocarbon Oils, which have
their flash points on and above 93°C. In case flash
point exceeds 93°C, what you call it?
A: Can’t comment. As flashpoint isn’t the only
parameter. We have tested the samples that were
submitted to us as per IS 1460:2005.

Q: IOCL supplies HSD to various parties. Have you
ever come across any situation in which you have
found the Flash Point of all these test reports above
93°C and considered as a HSD?
A: Flash Point is not the only parameter which is
used to measuring the sample as per IS 1460:2005.

Q: Can you Say it is an automotive diesel?
A: Already written in the lab report and we have
tested the samples as per the parameters as per IS
1460:2005.”

(ii) The cross-examination of Shri Singh at the instance
of M/s. Gastrade International is as under:
“(Before the Principal Commissioner of Customs,
Custom House, Kandla)
Cross Examination of Shri Gobind Singh, Manager
(Lab), IOCL, Central Laboratory, Mumbai in the matter
of SCN F. No. DRI/AZU/CI/ENQ-11(INT-2/2018 dated
24.04.2019 issued to M/s. Gastrade International &
Others by Shri Hardik Modh, Advocate.

Q: What is your name·?
A: Dr. Gobind Singh.

Q: Where have you been working and for how long?
A: I have been working in IOCL at Sewree at Mumbai
since 2012.

Q: How many samples have you tested in respect
of petroleum products?
1378 [2025] 3 S.C.R.

Supreme Court Reports

A: I have tested large number of samples running
into hundreds of samples.

Q; Are you aware of letter dated 04.08.2018 written
by the Assistant Director of DRI whereby it was
requested to Mr Vivek W. Sawant, DGM, IOCL to
test the samples as requested under test memo in
accordance with the parameters prescribed under IS
1460:2005 for “High Speed Diesel” and to categorize
the identity of the goods. Had you tested these good
only to ascertain whether the parameters prescribed
under Indian Standard IS 1460:2005 for High Speed
Diesel?
A. Yes.

Q: As per the letter dated 04.08.2018, you were
requested to verify whether the samples were HSD
as per IS : 1460:2005. Have you followed these
instructions?
A: Yes.

Q: Have you signed the test reports annexed with
‘Relied upon Documents at Sr. No.14 to the Show
Cause Notice dated 24.04 2019?
A. Yes.

Q: What does it mean ‘reviewed by’?
A: The samples were tested by me and checked,
supervised and signed by my senior at the lab.

Q: Table I of IS 1480:2005 provides total 22
parameters are to be tested for ascertaining whether
the sample meets with the criteria of HSD?
A: The Sample meets with the specification IS
1460:2005 for the parameters tested at our laboratory
which are 14 parameters tested as per our lab
capabilities.
[2025] 3 S.C.R. 1379

Gastrade International v. Commissioner of Customs, Kandla

Q: Does it mean that the other a parameters are not
important for ascertaining or deciding whether the
sample meets with the criteria of HSD?
A: Already provided In the report that in the lab the
samples were tested as per IS 1406:2005 and there
is facility available only for testing of 14 parameters
and for the remaining 8 parameters, the facility is not
available for which I can’t comment.

Q: Do you know the function/characteristics of the 8
parameters provided under IS 1406:2005 that have
not been tested?
A; As the 8 parameters have not been tested, I can’t
comment in respect of these Parameters.

Q: On perusal of report, have you concluded that
it meets with the criteria of high speed diesel Of IS
1460:2005?
A: Again, it is submitted in the report that the samples
tested for 14 parameters as per IS 1406;2005, at the
lab which itself is for high speed diesel.

Q: In respect of Flash Point, two methods are
prescribed, Abel as well as PMCC. Remark No. 2
of test report provides that flash point was tested
by Abel apparatus method but since it was more
than 66°C, sample was tested by PMCC. In which
situation, sample of HSD is required to be tested at
Abel method and PMCC method?
A: If the temperature is above 66°C then PMCC is
required and If the temperature is below 66°C than
it is required to do with Able method.

Q: Do you think so one of the Ingredients for
considering HSD is flashpoint?
A: Can’t comment on ingredients. The minimum
temperature for Flash Point 35°C as prescribed in
standard. We have submitted the report.
1380 [2025] 3 S.C.R.

Supreme Court Reports

Q: What is the maximum and minimum flashpoint for
·considering the sample as HSD?
A: Only the minimum limit Is talked about that is
35°C and there is no maximum limit prescribed in
the standard.

Q. If case, the Flash Point exceeds above 100 •c,
150 •c, 200 •c etc., then does it still pertains 10 HSD
standard?
A: Can’t comment as above 35°C whatever the Flash
Point is, it does not matter.

Q: Point No. I of supplementary note of Chapter 27
of Customs Tariff Act provides that “Jute Batching Oil,
“Textile Oil” are Hydrocarbon oils, which have their
flash points on and above 93°C. In case flash point
exceeds 93°C, what you call It?
A: Can’t comment. As flashpoint isn’t the only
parameter. We have tested the samples that were
submitted to us as per IS 1460:2005.

Q: IOCL supplies HSD to various parties. Have you
ever come across any situation in which you have
found the Flash Point of all these test reports above
93°C and considered as a HSD?
A: Flash Point is not the only parameter which is
used to measuring the sample as per IS 1460:2005.

Q: Can you say it is an automotive diesel?
A: Already written in the lab report and we have
tested the samples as per the parameters as per IS
1460:2005.

(iii) The cross-examination of Shri Singh at the instance
of Divinity Impex is as under:
Cross-examination of Shri Gobind Singh, Manager
(Lab), IOCL, Central Laboratory, Mumbai in the matter
of SCN F.No.DRI/AXU/CI/ENQ-13(INT-02/2018)/2018
[2025] 3 S.C.R. 1381

Gastrade International v. Commissioner of Customs, Kandla

dated 24.04.2019 issued to M/s. Divinity Impex &
Others by Shri Kumar Pal Mehta, Practising Company
Secretary and Authorized representative of M/s
Divinity Impex.
Q: What is your name?
A: Shri (Dr.) Gobind Singh.

Q: What is your qualification?
A: P.hd Chemistry.

Q: How many years of experience do you have?
A: 7 years.

Q: How many samples have you tested till now?
A: Whatever the samples that are submitted to me,
I have tested them.

Q: What are the exact numbers of samples you
have tested?
A: whatever the number of samples that are submitted
to me by DRI, I have tested them.

Q: Have you personally examined the samples?
A: Yes.

Q: When did you receive the samples from DRI?
A: 09.08.2018.

Q: Have you yourself prepared the report?
A: There is a procedure for that. The samples were
received by concerned authority, after that I have
tested and prepared the report and my senior has
reviewed the report thereafter.

Q: After how many days of the seizure of the sample
by the DRI, the sample was received by you?
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Adjudicating Authority intervened and said that this is
a matter of record and it is a sheer wastage of time
of Adjudicating Authority and the person whose cross
examination is being done.

Q: What is the standard specification for testing the
samples of HSD?
A: IS 1460:2005.

Q: How many parameters were tested for the
samples?
A: A total of 14 parameters were tested as prescribed
in the standard as per the Lab capabilities.

Q: Did certain parameters were not tested due to
the testing facility of other parameters not being
available at the lab?
A: Yes, as the lab is a marketing lab and it is not a
refining lab.

Q: Have your tested the sample as per IS 1460:2005?
A: This sample has been tested as per the standard
IS 1460:2005 and under this specification there are
total 22 tests covered out of which we have tested
only 14 parameters as per our Lab capability.”
(emphasis added)

37. Since the findings and conclusions reached by the Adjudicating
Authority and Appellate Tribunal merged with the High Court’s decision,
we will focus our attention on the High Court’s analysis and conclusion.
38. The conclusion of the High Court that the questioned imported good
is HSD was based on the following premise:
(i) Though it is the settled position of law that the burden of showing
the correct classification lies on the Revenue, it would suffice
if the Revenue is able to establish its case with such a degree
of preponderance that the existence of a fact could be said to
have been proved, and it is not necessary to establish on a part
[2025] 3 S.C.R. 1383

Gastrade International v. Commissioner of Customs, Kandla

of the Revenue to prove the fact with mathematical precision.
(ii) Once the Revenue has been able to prove the classification on
the basis of preponderance of probabilities, the burden would
then shift to the assessee to prove its claim.
(iii) In the present case, the High Court was satisfied that in respect
of the sample, in the third test since 14 out of 21 parameters
laid down under the Indian Standards Specification of Bureau
of Indian Standards IS1460:2005 relating to HSD were satisfied
the sample would be of High Speed Diesel and not Base Oil.
(iv) Though the High Court was conscious of the fact that all the tests
in respect of the 21 parameters laid down under IS1460:2005
relating to High Speed Diesel were not conducted but only in
respect of the 14 parameters in the third test, and since the
IOCL laboratory was equipped to conduct only 14 tests as it
had no facility to conduct remaining seven tests, by applying
the principle of proof on preponderance of probability, the
High Court took the view that the Revenue had been able to
discharge its burden of the fact that the imported goods was
High Speed Diesel and not Base Oil.
(v) In holding so, the High Court was impressed by the evidence
of the expert Dr. Gobind Singh of the IOCL laboratory who had
conducted the test and the High Court was of the view that
such expert evidence could not have been ignored.
(vi) The High Court took the view that the Tribunal had ignored the
fact that all the tests carried out in three different laboratories
reveal only one thing that the sample showed the characteristics
of HSD.
(vii) The High Court also held that the assessees have not been able
to show anything on the basis of which it could be said that if all
the prescribed 21/22 tests are not carried out, the report would
remain incomplete and would not be admissible in evidence or
would not be conclusive of the nature of the sample.
(viii) The High Court also took the view that since the 14 tests
indicate the sample to be one of High Speed Diesel, merely
on the ground that 7 other test could not be undertaken by
the laboratories because of lack of adequate facility to conduct
these test, such an evidence could not have been ignored in
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view of the legal position that the Revenue need not prove its
case with mathematical accuracy and beyond reasonable doubt.
39. There cannot be any dispute to the proposition of law as noted by
the High Court that the burden of proof as regards the classification
of any goods of importation is upon the Revenue/Customs authority
and the standard of proof in proceedings under the Tariff Act is not
“beyond reasonable doubt”. However, whether “preponderance of
probability” can be the appropriate test for classification under the
Customs Act would be required to be examined in the light of the
“General Rules for the interpretation of this Schedule” as provided in
the First Schedule – Import Tariff in Part 2 of the Tariff Act (hereinafter
referred to as the “Rules”)
40. The aforesaid Rules provide the principles on the basis of which
the goods in the First Schedule to the Tariff Act are to be classified,
which had escaped the attention of all the three forums below and
each forum had adopted its own methodology to determine the
proper classification of the goods/substance in issue as discussed
above dehors the aforesaid rules for interpretation.
41. Rule 1 of the aforesaid Rules lays down that the classification shall
be determined on the basis of the terms of the headings and relative
Section or Chapter Notes.
Rule 2 is to be invoked when it relates to an incomplete or unfinished
article or a mixture of substances, with which we are not concerned.
Rule 3 is attracted when for certain reasons, the goods are prima
facie classifiable under two or more headings. This situation also
does not arise in the present case.
Rule 4 further provides that goods which cannot be classified in
accordance with the above rules shall be classified under the heading
appropriate to the goods to which they are “most akin”.
For better appreciation, relevant portions of the aforesaid Rules are
reproduced herein below.
General Rules for the interpretation of this Schedule
Classification of goods in this Schedule shall be
governed by the following principles:
1. The titles of Sections, Chapters and sub-chapters are
provided for ease of reference only; for legal purposes,
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Gastrade International v. Commissioner of Customs, Kandla

classification shall be determined according to the terms
of the headings and any relative Section or Chapter Notes
and, provided such headings or Notes do not otherwise
require, according to the following provisions:
2. (a) Any reference in a heading to an article shall be
taken to include a reference to that article incomplete or
unfinished, provided that, as presented, the incomplete
or unfinished articles has the essential character of the
complete or finished article. It shall also be taken to include
a reference to that article complete or finished (or falling
to be classified as complete or finished
by virtue of this rule), presented unassembled or
disassembled.
(b) Any reference in a heading to a material or substance
shall be taken to include a reference to mixtures or
combinations of that material or substance with other
materials or substances. Any reference to goods of a given
material or substance shall be taken to include a reference
to goods consisting wholly or partly of such material or
substance. The classification of goods consisting of more
than one material or substance shall be according to the
principles
of rule 3.
3. When by application of rule 2(b) or for any other reason,
goods are, prima facie, classifiable under two or more
headings, classification shall be effected as follows:
(a) The heading which provides the most specific description
shall be preferred providing a more general description.
However, when two or more headings each to headings
refer to part only of the materials or substances contained
in mixed or composite goods or to part only of the items
in a set put up for retail sale, those headings are to be
regarded as equally specific in relation to those goods,
even if one of them gives a more complete or precise
Description of the goods.(b) Mixtures, composite goods
consisting of different materials or made up of different
components, and goods put up in sets for retail sale,
which cannot be classified by reference to (a), shall be
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classified as if they consisted of the material or component
which gives them their essential character, in so far as
this criterion is applicable.
(c) When goods cannot be classified by reference to (a)
or (b), they shall be classified under the heading which
occurs last in numerical order among those which equally
merit consideration.
4. Goods which cannot be classified in accordance with
the above rules shall be classified under the heading
appropriate to the goods to which they are most akin.
5. In addition to the foregoing provisions, the following
rules shall apply in respect of the goods referred to therein:
(a) Camera cases, musical instrument cases, gun cases,
drawing instrument cases, necklace cases and similar
containers, specially shaped or fitted to contain a specific
article or set of articles, suitable for long-term use and
presented with the articles for which they are intended, shall
be classified with such articles when of a kind normally sold
therewith. This rule does not, however, apply to containers
which give the whole its essential character;
(b) Subject to the provisions of (a) above, packing materials
and packing containers presented with the goods therein
shall be classified with the goods if they are of a kind
normally used for packing such goods. However, this
provisions does not apply when such packing materials or
packing containers are clearly suitable for repetitive use.
6. For legal purposes, the classification of goods in the
sub-headings of a heading shall be determined according
to the terms of those sub headings and any related sub
headings Notes and, mutatis mutandis, to the above rules,
on the understanding that only sub headings at the same
level are comparable. For the purposes of this rule the
relative Section and Chapter Notes also apply, unless the
context otherwise requires.
xxxxxxxxxxx”
(emphasis added)
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Gastrade International v. Commissioner of Customs, Kandla

42. The aforesaid Rule 4 abundantly makes it clear that goods which
cannot be classified in accordance with the preceding rules shall
be classified under the heading appropriate to the goods to which
they are “most akin.”
There may be situations where, because of scientific advancements,
innovations and discoveries, there may be new imported products
that may not exactly fit the specifications mentioned under the
Chapters, Headings, or Notes under the Tariff Act. In such events, if
the attributes of these articles show close resemblance, thus, “most
akin” to those articles/goods which are already specified in the First
Schedule to the Tariff Act, these new products will be classified
accordingly with which these imported goods are “most akin” or bear
closest resemblance or similarity.
43. In the present case as discussed above, based on the three laboratory
tests and evidence of the expert opinion, the High Court had concluded
that the Customs Authority had been able to prove that the imported
product is HSD by applying the test of preponderance of probability.
The High Court had not referred to the aforesaid Rules in arriving
at its conclusion by invoking the “most akin” test as contemplated
under Rule 4.
44. Before we proceed further, it would be apposite to critically examine
the aforesaid test reports and the evidence of the expert.
45. A careful perusal of the first report furnished by the Central Excise
and Custom Laboratory at Vadodara on 11.05.2018 would show that
the samples were tested in respect of only 8 parameters out of 21.
Even in respect of the said 8 parameters, as regards the flash point,
for which the specification is 66 (minimum) as per Pensky Martens
Closed Cup (PMCC) test, the result mentions it to be above 66°C.
Therefore, in respect of flash point it cannot be said that the sample
conforms to this specification.
The test report mentions that in view of the analytical parameter,
“the sample has characteristics of High Speed Diesel/Automotive
Fuel Oil” conforming to IS1460:2005 and that it is not Base Oil.
However, the said report does not specifically give the opinion that
the sample is that of HSD or can be treated as that of HSD. The
report merely says that the sample has characteristics of HSD Oil.
There is a sea of difference when the opinion says that a sample
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has characteristics of High Speed Diesel in contradistinction to the
other possible opinion that the sample is or can be considered to
be High Speed Diesel Oil. If a questioned article bears only certain
characteristics of a specified article, can the questioned article be
treated to be or equated with the specified article? We are afraid,
the answer has to be in the negative, unless the opinion clearly
states that because of the salient features in the questioned article
(samples), the questioned article and the specified article (HSD
in the present case) are substantially similar so as to identify the
questioned article with the specified article.
46. The first report of the Central Excise and Custom Laboratory at
Vadodara, however, neither says that because of the characteristics
ascertained, the tested sample can be treated as that of HSD. In
other words, no clear opinion has been given in the first test result
by the expert that the samples are indeed that of HSD or can be
treated to be that of HSD.
47. Therefore, in our opinion, the first test based on examination of 8
parameters against 21/22 prescribed cannot be considered to be a
definitive opinion to take the view that the sample is indeed that of
HSD. It would be speculative or assumptive to say on the basis of
the aforesaid opinion that the sample is that of HSD.
48. Coming to the second test report furnished by the Central Revenues
Control Laboratory, CRCL, New Delhi on 03.07.2018, the said
report indicates that the sample was tested in respect of 12 out of
21/22 prescribed parameters and we find that of the aforesaid 12
parameters, at least on 2 parameters, the sample does not appear
to fulfil the requirements of IS 1460:2005.
49. As per IS 1460:2005, the flash point is 66° C (minimum), whereas
the test result in respect of the said sample is shown as 113°C which
is far above the prescribed minimum specification.
Further, in respect of the Distillation Range of which the IS 1460:2005
has prescribed as 85 (minimum) at 350°C and 95 (minimum) at 370° C,
the result of the test of the samples shows it to be 238 at 356° C, 234
at 358°C, 234 at 352°C, 238 at 354°C, 240 at 356°C, 238 at 344°C,
240 at 354°C, 240 at 350°C, 240 at 342°C and 238 at 325°C. These
figures reflected in the test result are far above the prescribed figure
of 85 (minimum) and 95 (minimum) as per IS 1460:2005.
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Gastrade International v. Commissioner of Customs, Kandla

Under the circumstances, though the second test was conducted in
respect of 12 out of 21 parameters as per IS 1460:2005, in respect
of 2 parameters, of flash point and distillation range, the samples
did not match the IS 1460:2005 specifications. Thus, it can be said
that the samples conform to only 10 parameters. If that is so, can it
be said that the samples are of High Speed Diesel? We doubt so.
50. It has been noticed as in the case of the opinion given in the first
test report, the second report also merely mentions that each of the
ten samples conforms (though not so in respect of two parameters
as mentioned above) to the specifications of High Speed Diesel/
Automotive Diesel Fuel as per IS 1460:2005. The second test
report does not specifically state that because of the characteristics
ascertained, the samples can be treated as that of HSD. The second
report also avoids giving any such categorical finding or opinion
that the samples are of HSD except for stating that these samples
conform to the IS specification (though only in respect of 10 out of
21 specifications).
51. Coming to the third test report prepared by the Indian Oil Corporation
Limited dated 14.08.2018 upon which much reliance has been placed
by the High Court, similar inconclusive opinion has been given.
Interestingly, we have also noted that in respect of a parameter
namely, flashpoint, the third report mentions that the flash point of
the sample is 112° C which is far above the minimum flashpoint
mentioned under the IS specification which is 66°C. It may be noted
that in the first report, the flashpoint of the sample has been shown
as above 66°C, which itself is quite vague unlike in the second and
third reports, which mention very high flash points. Therefore, it cannot
be said that as far as the parameter of flashpoint is concerned, the
samples truly conform to the Indian Standard Bureau of Specification
IS 1460:2005.
What troubles us is whether on the basis of tests conducted only in
respect of 14 out of 21 parameters in the third test, can it be said
that the samples are that of HSD?
52. It is noteworthy that as in the case of earlier two laboratory test
reports, the third report prepared by the Central Laboratory of Indian
Oil Corporation Limited also does not give a clear and categorical
opinion that the samples tested indeed are of HSD.
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In the REMARKS in the third report, it is mentioned under paragraph
4 that,
“This sample meet the specification for only XIV parameters
tested at our lab as per specification IS:1460:2005 a
mended”.
No other remark or observation or opinion is given to the effect that
in view of the conformity to 14 out of 21 parameters, the sample
qualifies to be treated as High Speed Diesel.
53. It was left to the Adjudicating Authority/ High Court to draw the
inference that the samples are of HSD in absence of such opinion
by the experts.
54. One noticeable aspect in the present case is that the Adjudicating
Authority/Tribunal/High Court had been called upon to decide this
issue, when there are clearly laid down scientific criteria to determine
whether the oil in issue is HSD or not. The fact to be proved herein is
not an incident, situation, phenomenon or happening that may require
a bundle of evidence to prove its existence based on the standard of
preponderance of probability. The issue involved is about the proper
classification of an existing material/article based on certain specified
specifications. For this one only needs to refer to the specifications
mentioned under IS 1460:2005 and once the sample conforms to the
specifications, it would be accordingly identified/classified as HSD
which would not require any analysis or appreciation of evidence.
The rules do not provide that any substance that partly complies
with the aforesaid parameters will be considered or deemed to be
that specified substance. If tests had been done in respect of all the
21 parameters as per IS 1460:2005, and if the results conform to
all these parameters, there will be no difficulty in concluding that the
samples are indeed that of HSD. The problem has arisen because
the tests were done only with respect of a few parameters and not
all, leaving it to the discretion of the Adjudicating Authorities/Tribunal/
High Court to determine whether it has been proved based on these
tests that the samples are indeed that of the HSD. Thus, this exercise
has introduced an element of subjective appraisal and evaluation of
the pieces of evidence.
55. In the present case, the evidence/materials on which the High Court
based its conclusion are the test reports and the evidence of the
expert, Dr. Gobind Singh. Since the test reports are not conclusive
[2025] 3 S.C.R. 1391

Gastrade International v. Commissioner of Customs, Kandla

as regards all the 21 stipulated parameters under IS 1460:2005
and the evidence of Dr. Gobind Singh is also not definitive, the test
report and expert opinion would be required to be assessed properly.
56. Section 45 of the Evidence Act of 1872 deals with expert opinion,
which reads as follows:
“Section 45.
Opinions of experts.
When the Court has to form an opinion upon a point
of foreign law, or of science or art, or as to identity of
handwriting or finger impressions, the opinions upon that
point of persons specially skilled in such foreign law,
science or art, or in questions as to identity of handwriting
or finger-impressions are relevant facts.
Such persons are called experts.”
57. The opinion of the experts, however weighty they may be, are not
binding on the court and is only relevant for the court to consider it to
come to a final decision on any fact in issue. However, since courts
are not experts in the discipline of science, they ordinarily accept
the scientific report and act upon it. But where the expert opinion
suffers from certain shortcomings or ambiguities, lack of clarity, or
inadequacy, it would be subject to judicial scrutiny and it would not
be safe to rely wholly on the same under such circumstances.
58. We may briefly recapitulate the views of this Court relating to expert
witnesses.
59. This Court in State of H.P. v. Jai Lal, (1999) 7 SCC 280 observed
that the credibility of expert witness depends on the reasons stated
in support of his conclusions and the data and material furnished
which form the basis of his conclusions. It was thus observed as
follows:
“18. An expert is not a witness of fact. His evidence is
really of an advisory character. The duty of an expert
witness is to furnish the Judge with the necessary scientific
criteria for testing the accuracy of the conclusions so as
to enable the Judge to form his independent judgment by
the application of this criteria to the facts proved by the
evidence of the case. The scientific opinion evidence, if
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intelligible, convincing and tested becomes a factor and
often an important factor for consideration along with
the other evidence of the case. The credibility of such a
witness depends on the reasons stated in support of his
conclusions and the data and material furnished which
form the basis of his conclusions”
(emphasis added)

60. This Court in Dayal Singh v. State of Uttaranchal, (2012) 8 SCC
263 reiterated the aforesaid view.
It was also observed that the essential principle governing expert
evidence is that the expert is not only to provide reasons to support
his opinion but the result should be directly demonstrable. Thus, if
the report of an expert is slipshod, inadequate or cryptic and the
information of similarities or dissimilarities is not available in his
report and his evidence in the case, then his opinion is of no use.
It was reiterated that the purpose of an expert opinion is primarily to
assist the court in arriving at the final conclusion. Such report is not
binding upon the court. The court is expected to analyse the report,
read it in conjunction with the other evidence on record, and then form
its final opinion as to whether such report is worthy of reliance or not.
It was thus observed as follows:
“35. This brings us to an ancillary issue as to how
the Court would appreciate the evidence in such
cases………………. The courts, normally, look at
expert evidence with a greater sense of acceptability,
but it is equally true that the courts are not absolutely
guided by the report of the experts, especially if
such reports are perfunctory, unsustainable and are
the result of a deliberate attempt to misdirect the
prosecution…………
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
39. The Indian law on expert evidence does not proceed on
any significantly different footing. The skill and experience
of an expert is the ethos of his opinion, which itself should
be reasoned and convincing. Not to say that no other view
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Gastrade International v. Commissioner of Customs, Kandla

would be possible, but if the view of the expert has to find
due weightage in the mind of the court, it has to be well
authored and convincing. ………………..
40. We really need not reiterate various judgments which
have taken the view that the purpose of an expert opinion is
primarily to assist the court in arriving at a final conclusion.
Such report is not binding upon the court. The court is
expected to analyse the report, read it in conjunction
with the other evidence on record and then form its final
opinion as to whether such report is worthy of reliance or
not………………….”
61. Though these observations were made in the context of criminal
trials, keeping in mind the basic principles underlying the relevance
and assessment of expert opinion, in our view, would be beneficial
in the present case as well.
62. In the light of the above, we will examine the test results and
evidence of the expert witness, Dr. Gobind Singh, Manager (Lab) of
the IOCL, Mumbai on which the High Court relied heavily to come
to the conclusion that the Revenue/Department had been able to
establish their case that the imported goods were HSD.
During the cross examination of the expert witness, the following
questions were asked about 8 parameters on which the samples
were not tested:
“Q: Does it mean that the other 8 parameters are not
important for ascertaining or deciding whether the sample
meets with the criteria of HSD?
A: Already provided in the report that in the lab the samples
were tested as per IS 1406:2005 and there is a facility
available only for testing of 14 parameters and for the
remaining 8 parameters, the facility is not available for
which I can’t comment.

Q: Do you know the function/characteristics of the 8
parameters provided under IS 1460:2005 that have not
been tested?
A: As the 8 parameters have not been tested, I can’t
comment in respect of these parameters.
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63. From the above, it is clearly noticeable that the expert who undertook
the tests evaded answering the crucial question as to the importance
of the 8 parameters for deciding whether the sample is of HSD or
not. It is to be remembered that the Indian Specifications of Bureau
of Indian Standard IS:1460:2005 specifically provides 21 parameters,
which are the attributes of High Speed Oil and nothing is mentioned
under the Rules as to whether compliance with only certain of the
specifications would justify treating the article as HSD.
64. As regards the third test, only 13 specifications conformed to the
specifications (and not 14 as mentioned in the report since in respect
of the flash point, the sample did not meet the specification). In the
absence of fulfilment of the remaining of specifications, can it be said
authoritatively that the samples will still qualify as HSD?
Interestingly as discussed above, neither the expert nor the test
results stated categorically that these samples are indeed that of
HSD on fulfilment of some of the parameters.
The expert was specifically asked as to whether the sample was
automotive diesel, which the expert evaded and did not give a clear
answer except for saying that it is already written in the report and
the sample has been tested as per the IS 1460: 2005 as evident
from the following question and answer.
“Q: Can you say it is an automotive diesel?
A: Already written in the lab report and we have tested
the samples as per the parameters as per IS 1460:2005.”
65. It may be noted that in the written report, it was not mentioned that
the sample is that of HSD though it mentions that it was tested as
per the parameters of IS 1460:2005 and has characteristics of some
of the parameters.
The Adjudicating Authority as well as the High Court, without there
being any such categorical opinion in the report or by the expert,
nevertheless, went on to conclude that the samples were indeed of
HSD by applying the test of preponderance of probability, which we
feel is problematic.
66. Apart from this lack of clarity of opinion by the expert and in the
test reports to the effect that the samples are of HSD, there is one
aspect which we consider is also important.
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Gastrade International v. Commissioner of Customs, Kandla

67. As noted above, all three test results show that the samples do not
meet the specification relating to flash point. Unfortunately, the expert
has avoided giving satisfactory answers to the searching questions
put to him relating to the flash point during the cross-examination,
though as an expert in the field, he was expected to know and
clarify the legitimate doubts about the significance of flash point
in determining the nature of the fuel as evident from the following
questions and answers.
“Q: Do you think so one of the ingredients for considering
HSD is flashpoint?
A: Can’t comment on ingredients. The minimum temperature
for Flash Point 35°C as prescribed in standard. We have
submitted the report.

Q: What is the maximum and minimum flashpoint for
considering the sample as HSD?
A: Only the minimum limit is talked about that is 35°C
and there is no maximum limit prescribed in the standard.

Q: If case, the Flash Point exceeds above 100°C, 150°C,
200°C etc., then does it still pertains to HSD standard?
A: Can’t comment as above 35°C whatever the Flash
Point is, it does not matter.

Q: Point No. I of supplementary note of Chapter 27 of
Customs Tariff Act provides that “Jute Batching Oil”, “Textile
Oil” are Hydrocarbon oils, which have their flash points
on and above 93°C. In case flash point exceeds 93°C,
what you call it?
A: Can’t comment. As flashpoint isn’t the only parameter.
We have tested the samples that were submitted to us
as per IS 1460:2005.

Q: IOCL supplies HSD to various parties. Have you ever
come across any situation in which you have found the
Flash Point of all these test reports above 93°C and
considered as a HSD?
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A: Flash Point is not the only parameter which is used to
measuring the sample as per IS 1460:2005

Q: Can you say it is an automotive diesel?
A: Already written in the lab report and we have tested
the samples as per the parameters as per IS 1460:2005.”
68. We are quite befuddled by the answers given by the expert about
flash point, as if he was not aware of the importance of flash point
in petroleum products. He was evasive as regards nonconformity on
this parameter in determining whether the samples are those of HSD.
Flash point has been mentioned in the Supplementary Note to
Chapter 27 in Appendix-2 to the Customs Tariff Act by stating that
it shall be determined following the test prescribed in this behalf in
the rules made under the Petroleum Act, 1934.
Under Section 2(c) of the Petroleum Act, 1934 flash-point of any
petroleum has been defined as the lowest temperature at which
it yields a vapour which will give a momentary flash when ignited,
determined in accordance with the provisions of Chapter II and the
rules made thereunder.
69. The Petroleum Act classifies petroleum products under three
categories, depending on the quantum of flash point, namely,
(i) “Petroleum Class A” which means petroleum having a flash-
point below twenty-three degrees Centigrade;
(ii) “Petroleum Class B” which means petroleum having a flash-
point of twenty-three degrees Centigrade and above but below
sixty-five degrees Centigrade;
(iii) “Petroleum Class C” which means petroleum having a flash-
point of sixty-five degrees Centigrade and above but below
ninety-three degree Centigrade.
70. Specification regarding flash point is accordingly of some significance,
even if it may not be the most important parameter in determining
whether a petroleum product is HSD or not. From the specification
provided under IS:1460:2005, HSD will have flash point of minimum
66° C. Thus, it will be treated as Petroleum Class C in terms of the
Petroleum Act. It is not anyone’s case that HSD is not a hydrocarbon
and not an automotive fuel. If that is so, it will be classifiable under
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the Petroleum Act as a Class C Petroleum product, if not Class B or
Class A product. As mentioned above, the range of the flash point
of Petroleum Class C is between 65° C and 93°C whereas the test
results show a higher flash point.
It has been submitted on behalf of the appellants, relying on the
decision of this Court in Durga Oil Company Vs State of U.P.,
(1998) 6 SCC 299, that HSD is petroleum Class B product. Thus,
by implication, if the flash point of the sample goes above 93° C,
it is questionable whether the imported oil can be considered to be
HSD, even though the maximum flash point for HSD has not been
specifically mentioned in the IS: 1460:2005, but only the minimum.
71. Because of the evasive and non-committal answers given by the
expert Dr. Gobind Singh, the legitimate conclusion that can be drawn
is that his opinion and also the test results are inconclusive, unclear
and cannot be said to be fully reliable to determine the oil as HSD.
72. We would however, like to clarify that we are not stepping into the
shoes of the scientific expert relating to the determination of the
nature of the oil, as to whether it is HSD or Base Oil. Nevertheless,
we are satisfied that there is a very germane and relevant factor on
which the expert had failed to clarify, and in respect of which the
test reports have also remained silent, that is, relating to flash point,
making the classification of the imported oil as HSD by the Customs
authority highly doubtful. If the expert or the test reports had clearly
mentioned that in spite of the high degree of flash point shown by
the samples, and non-examination in respect of all the parameters,
these samples can still be considered to be that of HSD, we would
have accorded due deference to such opinion.
But as noted above, neither the expert nor the test results categorically
and in clearly terms mention that these samples are that of HSD,
except for making an ambiguous remark that these samples conform to
certain parameters of HSD as per IS 1460:2005. As discussed above,
by mere conformation to certain parameters of HSD, the samples
cannot be equated with HSD. The expert opinion and the test results
are as vague as these can be qua classification of the oil as HSD.
73. However, as noted above, the High Court, by applying the test
of preponderance of probability concluded that the substance in
question is HSD.
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74. At this juncture it may be apposite to dwell briefly upon the meaning
of the expression “preponderance of probability” in contradistinction
to “proof beyond reasonable doubt”.
75. Under Section 3 of the Evidence Act, 1872, a fact is said to be
proved when, after considering the matters before it, the court either
believes it to exist, or considers its existence so probable that a
prudent man ought, under the circumstances of the particular case,
to act upon the supposition that it exists, which clearly indicates that
the Evidence Act does not insist upon absolute standard of proof.
Evidence Act also nowhere defines as to the meaning of proof based
on “preponderance of probability” and “beyond reasonable doubt”
which are different standards of proof.
76. Different standards of proof have evolved in criminal and civil
jurisdictions in course of time considering the differential stakes
involved in these proceedings. In a criminal proceeding, the stakes
are higher for a defendant as it involves precious rights and liberties
of the person with a potential to lose the same if convicted of the
offence charged. On the other hand, civil liability is less blameworthy,
and penalty, if any, is less severe.
77. The expression “preponderance of probability” has been explained by
this Court in M. Siddiq (Ram Janmabhumi Temple-5 J) v. Suresh
Das, (2020) 1 SCC 1. In the aforesaid case, this Court applied the
test of a prudent man who upon weighing the various probabilities
finds that the preponderance is in favour of the existence of the
particular fact. It was observed that even in the case of proof by
preponderance of probability, there may be degrees of probability
within that standard and “the degree depends on the subject-matter.”
It was held that,
“720. The court in a civil trial applies a standard of
proof governed by a preponderance of probabilities.
This standard is also described sometimes as a balance
of probability or the preponderance of the evidence.
Phipson on Evidence formulates the standard succinctly :
If therefore, the evidence is such that the court can say “we
think it more probable than not”, the burden is discharged,
but if the probabilities are equal, it is not. [Phipson on
Evidence] In Miller v. Minister of Pensions [Miller v. Minister
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of Pensions, (1947) 2 All ER 372.], Lord Denning, J. (as
the Master of Rolls then was) defined the doctrine of the
balance or preponderance of probabilities in the following
terms : (All ER p. 373 H)
“(1) … It need not reach certainty, but it must carry a
high degree of probability. Proof beyond reasonable
doubt does not mean proof beyond the shadow of
doubt. The law would fail to protect the community if
it admitted fanciful possibilities to deflect the course of
justice. If the evidence is so strong against a man as
to leave only a remote possibility in his favour which
can be dismissed with the sentence, “of course it is
possible, but not in the least probable” the case is
proved beyond reasonable doubt, but nothing short
of that will suffice.”
(emphasis supplied)

721. The law recognises that within the standard of
preponderance of probabilities, there could be different
degrees of probability. This was succinctly summarised
by Denning, LJ in Bater v. Bater [Bater v. Bater, [1951]
P. 35 (CA).], where he formulated the principle thus : (p. 37)
“… So also, in civil cases, the case must be proved by a
preponderance of probability, but there may be degrees
of probability within that standard. The degree depends
on the subject-matter.”
722. The definition of the expression “proved” in Section
3 of the Evidence Act is in the following terms:
“3. … “Proved”. — A fact is said to be proved when,
after considering the matters before it, the court
either believes it to exist, or considers its existence
so probable that a prudent man ought, under the
circumstances of the particular case, to act upon the
supposition that it exists.”
723. Proof of a fact depends upon the probability of its
existence. The finding of the court must be based on:
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723.1 The test of a prudent person, who acts under the
supposition that a fact exists.
723.2 In the context and circumstances of a particular case.
724. Analysing this, Y.V. Chandrachud, J. (as the learned
Chief Justice then was) in N.G. Dastane v. S. Dastane
[N.G. Dastane v. S. Dastane, (1975) 2 SCC 326.] held :
(SCC pp. 335-36, para 24)
“The belief regarding the existence of a fact may,
thus, be founded on a balance of probabilities. A
prudent man faced with conflicting probabilities
concerning a fact situation will act on the supposition
that the fact exists, if on weighing the various
probabilities he finds that the preponderance is in
favour of the existence of the particular fact. As
a prudent man, so the court applies this test for
finding whether a fact in issue can be said to be
proved. The first step in this process is to fix the
probabilities, the second to weigh them, though
the two may often intermingle. The impossible is
weeded out at the first stage, the improbable at
the second. Within the wide range of probabilities
the court has often a difficult choice to make but
it is this choice which ultimately determines where
the preponderance of probabilities lies. Important
issues like those which affect the status of parties
demand a closer scrutiny than those like the loan
on a promissory note: “the nature and gravity of
an issue necessarily determines the manner of
attaining reasonable satisfaction of the truth of the
issue [ Per Dixon, J, in Wright v. Wright, (1948) 77
CLR 191 (Aust).], CLR at p. 210”; or as said by
Lord Denning, “the degree of probability depends on
the subject-matter”. In proportion as the offence is
grave, so ought the proof to be clear [Blyth v. Blyth,
[1966] A.C. 643 : [1966] 2 WLR 634 : (1966) 1 All
ER 524 (HL).], All ER at p. 536’. But whether the
issue is one of cruelty or of a loan on a pronote,
the test to apply is whether on a preponderance of
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Gastrade International v. Commissioner of Customs, Kandla

probabilities the relevant fact is proved. In civil cases
this, normally, is the standard of proof to apply for
finding whether the burden of proof is discharged.”
(emphasis supplied)

725. The court recognised that within the standard of
preponderance of probabilities, the degree of probability
is based on the subject-matter involved.
726. In State of U.P. v. Krishna Gopal [State of U.P. v.
Krishna Gopal, (1988) 4 SCC 302 : 1988 SCC (Crl.).],
this court observed : (SCC p. 314, para 26)
“26. The concepts of probability, and the degrees of
it, cannot obviously be expressed in terms of units
to be mathematically enumerated as to how many
of such units constitute proof beyond reasonable
doubt. There is an unmistakable subjective element
in the evaluation of the degrees of probability and
the quantum of proof. Forensic probability must, in
the last analysis, rest on a robust common sense
and, ultimately, on the trained intuitions of the Judge.”
78. What the aforesaid decisions postulate is that there may be varying
range in the degree of probabilities. Certainly, where the proceedings
involve requirement of fulfilment of technical/scientific parameters
with confiscatory and penal consequences, the degree of probability
would be of a higher order and not mere probability.
79. In the present case, what we have observed is that the High Court,
on the basis of the laboratory tests, more particularly the third test
conducted by IOCL, Mumbai Laboratory and the opinion of the
expert, namely Dr. Gobind Singh, and by observing that it is not
necessary to establish on the part of the Revenue to prove the fact
with mathematical precision, held that the Department has been able
to establish its case on the basis of preponderance of probability
that the imported oil was not Base Oil but HSD, which could not
have been imported by the appellants and upheld the order of the
Adjudicating Authority.
80. However, this analysis and conclusions arrived at by the High Court
are problematic for the following reasons:
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(i) There was no expert opinion at all that the samples which were
tested were indeed of HSD.
(ii) The opinion as contained in the test results was merely
mentioning about conformity of the samples with certain
specifications of IS 1460:2005 and not about conformity with
all the specifications.
(iii) Once the rule making authority had clearly delineated the
requisite parameters for ascertaining the nature of the goods/
substance, compliance/conformity with the stated parameters
would be the requirement.
(iv) There are 21 parameters laid down under IS 1460:2005
and none of the tests have shown compliance with all these
parameters. The last and third test have reported compliance
with 14 parameters, though as discussed above in respect
of 2 of the aforesaid 14 parameters, namely, flash point and
distillation range, the same are not in conformity. Thus, it cannot
be said there is substantial compliance with the parameters of
IS 1460:2005.
(v) Flash point, though may not be the most important parameter,
yet, its importance in determining the nature of the Automotive
oil cannot be ignored. Flash point being a very important criteria
to classify petroleum products, non-compliance of the samples
on this parameter would make the classification doubtful.
(vi) Evasive answers and non-clarification on certain aspects of
the flash point of the samples by the expert Dr. Gobind Singh
certainly cast a serious doubt on the samples being identified
as that of HSD. The expert himself also has not said that the
samples are of HSD except for stating that the samples conform
to certain specifications of the IS 1460:2005.
(vii) In view of the ambiguity and lack of clarity in the expert opinion/
laboratory test results, it would be unsafe to draw the inference
that the Department had been able to prove their case even
by applying the test of preponderance of probability merely
because the samples conform to certain parameters.
(viii) If the Department with all the resources at their command
and access to various laboratory facilities could not get the
samples tested in respect of all the 21 parameters, expecting
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Gastrade International v. Commissioner of Customs, Kandla

the assesses/appellants to get the samples tested to show
that these do not conform the specifications and are not HSD
does not appear to be reasonable. Thus, shifting of onus to
the assesses to prove otherwise appears to be unreasonable
and meaningless.
(ix) The burden was not on the assessees to demonstrate that
non-conformity with the remaining 8 parameters would vitiate
the conclusion that the samples were of HSD.
81. The aforesaid difficulties in our opinion can be overcome, if we apply
the test of “most akin” as contemplated under Rule 4 of the General
Rules for Interpretation referred to above.
82. The real test for classification, according to us, would be as to
whether any goods or substance in question is “most akin” or bears
the closest resemblance or similarity to any of the specified goods
mentioned under the Headings and relative Section or Chapter Notes
under the Tariff Act, and not by applying the test of preponderance
of probability.
83. By way of illustration, we may explain the position. If an importer
classifies the imported goods as “X”, which is disputed by the
Customs authority and classifies the same as “Y”, the test would be
whether the goods imported are “most akin” to “X” or “Y” in terms
of Rule 4 of the aforesaid Rules. The importer may also claim if
he so wishes, that the goods are most akin to “Z”, though it may
be akin to “Y” also, if such claim is more beneficial to him. Thus, it
has to be shown by the Customs Authority that the imported goods
bear the most affinity or resemblance or similarity to be “most
akin” to the specified goods and not mere similarity or akinness.
In other words, the test will be whether the imported goods bear
the closest resemblance or similarity with the specified good so
that these can be considered to be “most akin” to the specified
good. Certainly, the principle of preponderance of probability may
fall short of the more heightened test of “most akin” for proper
classification. The imported goods may bear resemblance to more
than one specified goods, in which event, unless the high degree
in the test of preponderance of probability is applied, there may be
difficulties in the proper classification. However, the said difficulty
may be overcome if the test of “most akin” is applied. If the attributes
of the imported goods show that the goods are “most akin” to the
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specified goods amongst an array of other specified goods, these
imported goods have to be classified as the specified goods with
which these goods bear the most resemblance or most akinness.
Thus, in our view, application of the principle of preponderance of
probability does not provide an accurate test. The more accurate
and precise test will be whether the goods in question are “most
akin” or most similar to the specified goods, as provided under
Rule 4 referred to above.
84. In the present case, as noticed above, the finding of the High
Court is based primarily on applying the test of preponderance of
probability which may not necessarily fulfil the “most akin” test. The
High Court came to the conclusion based on the incomplete test
reports and noncommittal opinion of the expert Dr. Gobind Singh
who in categorical terms had not stated that the imported goods
are HSD. There was no opinion that the imported goods are most
similar to HSD to satisfy the test of “most akin”. The definitive
opinion and finding that the imported goods are “most akin” to HSD
is missing in the reports and opinion for classifying the imported
goods as HSD.
85. The oil in question does not fully satisfy the specifications of HSD in
terms of IS 1460:2005. Hence, the correct test will be whether the
oil/article in issue is most akin to HSD or not for which appropriate
scientific evidence in the form of laboratory test reports and opinion
of the scientific experts will be of utmost relevance.
86. For the reasons discussed above, as the results of the test are
inconclusive, so being the opinion of the expert, we are unable to
agree with the conclusion of the High Court. Under the circumstances,
the option before this Court is, either to send the imported product
again for further tests and obtain the expert opinion atleast to the
effect that the imported product is ‘most akin’ to HSD even if it does
not fulfil all the parameters under IS 1460:2005 or give a benefit
of doubt to the appellants and close the proceedings against the
appellants by quashing the impugned orders, since the Revenue/
Customs Authority cannot take action against the appellants based
on inconclusive evidence.
87. As far as the first option is concerned, as noted above, though the
questioned product was sent for laboratory test in three premier
laboratories, these laboratories did not give conclusive finding that
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the product is indeed HSD and the expert also could not give a
definitive opinion. Further after such a long passage of time we
are doubtful whether the oil in question would still retain many of
the characteristics and properties which were present at the time
of import for an effective testing as aforesaid. Hence, we do not
consider it appropriate to direct further testing of the imported
product/oil at this point of time and such a retest may be rendered
a futile exercise. In our opinion, in the facts and circumstances,
it would be more appropriate to give the benefit of doubt to the
appellants because of the inconclusive evidence, rather than
directing for a fresh testing and seeking fresh expert opinion, as
a one-time measure.
88. Before parting with these appeals, we deem it necessary to issue
certain ancillary directions.
We are of the view that non-examination of any product/article/goods
on all the parameters laid down by the customs authority will always
lead to uncertainty and doubt, which are required to be removed
when dealing with confiscatory proceedings.
The genesis of the prolonged litigation lies in the non-availability
of adequate facilities for testing all the parameters provided under
Bureau of Indian Standard Specifications. Such a dispute could
have been avoided had the testing facilities for all the parameters
been available. Since the Authorities themselves had laid down
the specific parameters for classification of goods, as in the
present case by referring to classification under IS 1460:2005, it is
incumbent upon the Authorities to ensure that necessary facilities
are made available for testing of any disputed article on all these
parameters as otherwise, laying down such parameters would be
meaningless.
Hence, to avoid these difficulties, doubts and uncertainties in future,
the respondents are directed to ensure that proper facilities are
made available in the appropriate laboratories for undertaking tests
for all these parameters or at least for those parameters which the
Authorities consider are of essential character to satisfy the “most akin”
test without which the article in issue cannot be properly classified.
Accordingly, we direct the respondents to take necessary steps in
this regard within a period of six months for proper testing in all the
parameters in future.
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89. For the reasons discussed above, we allow these appeals by setting
aside the impugned common judgment and order dated 20.01.2022
passed in Revenue Tax Appeal No. 297 of 2021, Revenue Tax Appeal
No. 298 of 2021 and Revenue Tax Appeal No. 299 of 2021.
90. Appeals are accordingly disposed of in the aforesaid terms.

Result of the case: Appeals disposed of.

†
Headnotes prepared by: Ankit Gyan