Nitrogen-rich carbon nanotubes NCNT700 and NCNT800 were prepared using the chemical vapor deposition method (CVD). The catalysts were characterized via high-resolution transmission electron microscopy (HRTEM) and X-ray photoelectron spectroscopy (XPS) analysis. Both the catalysts were found to have an inverted cup-stack-like morphology. The XPS analysis revealed that the catalysts are rich in pyridinic sites with variable amounts of nitrogen on their surface. The NCTN700, with a higher nitrogen content and more pyridinic sites on its surface, was found to be a good catalyst for the oxidation of benzyl and veratryl alcohols into respective aldehydes. It was observed that toluene and 4-methyl veratrole were also produced in this reaction. The amount of toluene produced was as high as 21%, with 99% conversion of benzaldehyde in the presence of NCNTs-700. The mechanistic pathway was revealed through DFT studies, where the unusual product formation of aromatic alkanes such as toluene and 4-methyl veratrole was explained during the reaction. It was astonishing to observe the reduced product in the reaction that proceeds in the forward direction in presence of a peroxide (tert-butyl hydroperoxide, TBHP). During the computational analysis, it was revealed that the reduced product observed in the reaction did not appear to proceed through a direct disproportionation reaction. Rather, the benzyl alcohol (the reactant) used in the reaction may undergo oxidation by releasing the hydrogen radicals. The hydrogen atoms released during the oxidation reaction appear to have been trapped on pyrrolic sites on the surface of catalyst and later transferred to the reactant molecules to produce toluene as a side product.