GASTRADE INTERNATIONAL versus COMMISSIONER OF CUSTOMS, KANDLA

Citation: [2025] 3 S.C.R. 1350 · Decided: 28-03-2025 · Supreme Court of India · Bench: B.V. NAGARATHNA · Disposal: Disposed off

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Judgment (excerpt)

[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 sati

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