CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
BANGALORE
REGIONAL BENCH – COURT NO. 1

Legal Robe 21339 of 2016
(Arising out of Order-in-Appeal No(s). 386-389/2016 dated 27.05.2016 passed by the Commissioner of Customs (Appeals), Bangalore.)

M/s. Mukand Limited,
VERSUS
The Commissioner of Customs

With
(i)Customs Appeal No. 21340 of 2016 (M/s. Kalyani Steels Limited Vs. Commissioner of Customs)
(Arising out of Order-in-Appeal No(s). 386-389/2016 dated 27.05.2016 passed by the Commissioner of Customs (Appeals), Bangalore.)

(ii)Customs Appeal No. 21341 of 2016 (M/s. Kirloskar Ferrous Industries Ltd. Vs. Commissioner of Customs)
(Arising out of Order-in-Appeal No(s). 386-389/2016 dated 27.05.2016 passed by the Commissioner of Customs (Appeals), Bangalore.)

(iii)Customs Appeal No. 21388 of 2016 (M/s. SLR Metaliks Limited Vs. Commissioner of Customs)
(Arising out of Order-in-Appeal No(s). 386-389/2016 dated 27.05.2016 passed by the Commissioner of Customs (Appeals), Bangalore.)

APPEARANCE:
Mr. M.S. Nagaraja, Advocate for the Appellants
Mr. Maneesh Akhoury, Asst. Commissioner (AR) for the Respondent

 

CORAM: HON’BLE DR. D.M. MISRA, MEMBER (JUDICIAL) HON’BLE MRS R BHAGYA DEVI, MEMBER (TECHNICAL)

 

 

Final Order No. 20227 – 20230 /2025

DATE OF HEARING: 02.09.2024 DATE OF DECISION: 28.02.2025
PER : D.M. MISRA

These four appeals are filed against respective Orders-in- Appeal passed by the Commissioner of Customs(Appeals), Bangalore. Since common issue involved, these appeals are taken up together for hearing and disposal.
2.The details of the appeals filed are as below:-

Appeal No. Order-in-Appeal No. and date Demand of
Customs duty confirmed Interest
C/21339/2016 No.386-389/2016
dated 27.05.2016 Rs.3,69,95,865/- Rs.4,09,702/-
C/21340/2016 No.386-389/2016
dated 27.05.2016 Rs.1,09,08,382/- Rs.89,463/-
C/21341/2016 No.386-389/2016
dated 27.05.2016 Rs.66,59,705/- —
C/21388/2016 No.386-389/2016
dated 27.05.2016 Rs.1,26,09,400/- —

It would suffice to narrate the facts of appeal No.C/21339/2016 filed by M/s. Mukund Ltd.
3.Briefly stated the facts of the case are that the appellants herein above filed Bills of Entry declaring the product as Coke Breeze, declaring its classification under CTH 2704 0090 and claiming exemption under Sl.No.125 of Notification No.12/2012- Cus dated 17.03.2012. The goods were provisionally assessed and duty was paid under protest by the appellants. The provisional assessment was finalised after affording an opportunity of hearing to the appellant and the adjudicating authority rejecting the claim of the exemption Notification No.12/2012 confirmed the differential duty in each of the aforesaid case and appropriated the amount paid by the respective appellants. Aggrieved by the said order, the appellants   preferred   appeals   before   the   learned Commissioner(Appeals) who in turn rejected their appeals; hence the present appeals.

4.1.At the outset, the learned advocate for the appellants has submitted that in all these appeals, the common issue involved is whether the ‘Coke Breeze’ classified under CTH 2704 0090 is ‘Metallurgical Coke Fines’ and eligible for exemption under Notification No.12/2012-Cus dated 17.03.2012. He has submitted that the classification of the Coke Breeze declared by them has not been disputed by the authorities below. The exemption notification was denied solely on the ground that “Coke Breeze” and “Metallurgical Coke” are two different products; hence the exemption notification being specifies only Metallurgical Coke, therefore the same cannot be extended to Coke Breeze. Referring to the definition of Metallurgical Coke in the World Book of Encyclopaedia and the report on Emission Factor Documentation published by the United States Environment Protection Agency, and the glossary of terms relating to Coal Carbonisation products published by the Bureau of Indian Standards [IS-5451:2001] (reaffirmed in 2011), the learned advocate submitted that coke is either in lumps or fines used in or for metallurgical processes are Metallurgical Coke. He has also submitted that Coke Breeze imported by the appellants is used by them in the sintering plant to produce agglomerated Iron ore which is used in the blast furnace. He has submitted that Coke Breeze being smaller in size is not used in the blast furnace as it clogs and may inhibit flow of material. The Coke Breeze is used in Sintering Plant for agglomeration of Iron Ore Fines into useful Blast Furnace burden material, which improves the productivity of blast furnace. Thus, Coke Breeze is Metallurgical Coke used in the process of extraction of metal from Iron Ores. Coke Breeze is an integral part of raw material preparation processing and removal of impurities from the Ore. Coke Breeze performs the same function as fuel and reducing agent; therefore, the Coke Breeze comes within the meaning of ‘Metallurgical Coke’.

4.2.It is further submitted that use of Coke Breeze unequivocally establishes that Coke Breeze is Metallurgical Coke used in the metallurgical industry for manufacture of iron and steel. The use of Metallurgical Coke and Coke Breeze / Fines in the metallurgical industry for manufacture of Pig Iron is for the purpose ie. For reduction and separation of Iron from Iron Ore. The particle size of Met Coke does not alter its description, characteristics, use and classification. The Met Coke above 12mm and Coke Breeze 12mm and blow are Metallurgical Coke and classified under CTH 2704 0090. The Customs Tariff Act, 1975 has not made any distinction between met Coke in lump form and Coke Breeze and both are classified under CTH 2704 0090 and their use in Metallurgy is not in dispute. Therefore, Coke Breze being Metallurgical Coke is eligible to the exemption under Notification No.12/2012-Cus dated 17.03.2012.

4.3.Assailing the impugned order, learned advocate has summarised his argument:-

The Appellants submit that in the present case the technical parameters like size, calorific value, etc., for the “Metallurgical Coke” are neither defined in Chapter Notes of Chapter 27 of Customs Tariff Act, 1975 nor in the Explanatory Notes of Harmonized System of Nomenclature nor in the Exemption Notification No 12/2012 Cus dated 17.3.2012. If the imported goods satisfy that they are “Metallurgical Coke” the exemption is eligible and cannot be denied.

It is submitted that whether the imported goods come within a particular Tariff Heading or covered by the specific words used in the Exemption Notification is to be decided on the basis of the plain words used in the Notification. The Appellants rely on the following judgments:
(i)State of Andra Pradesh Vs Linde India Ltd 2020 (36) GSTL 3 (SC)
(ii)State of Rajasthan Vs Basanth Agrotech (India) Ltd 2014 (302) ELT 3 (SC)
(iii)Baidyanath Ayurved Bhavan (P) Ltd Vs Excise Commissioner, UP-1999 (110) ELT 363 (SC)

 

The Appellants submit that there is no legal or material basis to hold that ‘Met Coke Breeze’ or ‘Coke Fines’ classified under CTH 2704 00 and used in the manufacture of Iron and Steel is not Metallurgical Coke. Since both lumpy form of Metallurgical Coke and the Coke Fines (smaller size up to 12 mm) are used in the Metallurgical Industry for manufacture of Iron & Steel, both Metallurgical Coke in the form of Lumps and in the form of Fines referred to as ‘Coke Breeze’ are equally eligible for exemption under Notification No 12/2012 Cus dated 17.03.2012.
It is submitted that when the imported Coke Breeze is Metallurgical Coke and eligible for exemption under Notification No 12/2012 Cus dated 17.03.2012 the same cannot be denied on the basis of the CBEC Circular No 56/2003 Cus dated 27.6.2003. It is well settled law that the_Circulars contrary to law laid down by the Courts have no existence in law. The Appellants rely on the judgment of the Hon Supreme Court in the case of CCE, Bolpur Vs Ratna Melting & Wire Industries – 2008 (231) ELT 22 (SC).

The Appellants further submit that the impugned orders have not taken in to consideration the following factual and legal position:
(i)Metallurgical Coke (whether or not agglomerated) in the form of Lumps and Fines are classified under CTH 2704 00 of the Customs Tariff Act, 1975,
(ii)Met Coke in Lumps of size 12 MM and above and Coke Breeze of size 12 MM and below are manufactured through the same process of destructive distillation of Coal in Coke Ovens in Oxygen free atmosphere until the volatile components in coal evaporate. The material remaining is Coke. The Coke is filtered to segregate Met Coke of sizes above 12 MM and Coke Breeze of size 12 MM and below,
(iii)Met Coke in Lumps is used in Blast Furnace and Coke Breeze is used in Sinter and sintered product is used in Blast Furnace and hence both products are Metallurgical Coke used in the processes of manufacture of iron and Steel,
(iv)impugned orders heavily rely on CBEC Circular No 56/2003 Cus dated 27.6.2003 and conclude that Met Coke lumps and Met Coke Fines are different products and hence Coke Fines are not eligible for exemption under Notification No 12/2012 Cus dated 17.3.2012.

(v)The impugned orders are contrary to settled law that the Circulars cannot form the basis for interpretation of Exemption Notifications. The Appellants rely on the following judgments:
(a)Sandur Micro Circuits Ltd Vs CCE 2008 (229) ELT 641 (SC)
(b)CC (Port) Vs Sanwar Agarwal 2020 (372) ELT 686 (Cal)

(vi)It is also well settled that the Circulars contrary to law have no existence in law,
(vii)The technical parameters like size, calorific value, etc., for the “Metallurgical Coke” are neither defined in Chapter Notes of Chapter 27 of Customs Tariff Act, 1975 nor in the Explanatory Notes of Harmonized System of Nomenclature nor in the exemption Notification No 12/2012 Cus dated 17.3.2012. Therefore, Coke of size 12 MM and below, known as Coke Breeze, used in Metallurgical processes for manufacture of Iron and Steel is Metallurgical Coke,
(viii)Notification No 12/2012 Cus dated 17.3.2012 (Sl No 125) has not defined “Metallurgical Coke and there are no qualifying parameters or conditions prescribed for availing exemption. Both Met Coke (agglomerated) and Coke Breeze being Metallurgical Coke are equally eligible for exemption,
(ix)It is well settled legal position that the general term used for describing any commodity covers that commodity or item or article in all its forms and varieties,
(x)It is settled law that whether the imported goods come within a particular Tariff Heading or covered by the specific words used in the Exemption Notification is to be decided on the basis of the plain words or language used in the Notification and not on extraneous considerations.

5.Learned AR for the Revenue has reiterated the findings of the learned Commissioner(Appeals). He has submitted that the goods imported by the appellants are Coke Breeze which is different from Metallurgical Coke; hence the subject goods are not eligible for the benefit of Notification No.12/2012-Cus. He has submitted that following the Board’s Circular bearing No.56/2003-Cus dated 27.06.2003, the learned Commissioner has quoted that Coke Breeze and Metallurgical Coke are two different products and benefit of Notification cannot be extended to Coke Breeze. He has submitted that the issue is no more res integra and recently considered by the Kolkata Bench of this Tribunal in the case of Jindal Steel & Power Ltd. [Final Order No.75097/2024 dated 30.01.2024, wherein this Tribunal after analysing various literature available and the case laws on the subject held that the Coke Breeze and Metallurgical Coke are two different products and adducing similar arguments now advanced by the appellant held that exemption to Coke Breeze under Notification No.12/2012-Cus. dated 17.03.2012 cannot be extended as the same is applicable to Metallurgical Coke.

6.Heard both sides and perused the records.

 

7.The short issue involved in the present appeals for consideration is whether imported ‘Coke Breeze” be eligible to the benefit of Notification No.12/2012-Cus. dated 17.03.2012 (Sl.No.125). Notification No 12/2012 Cus. dated 17.3.2012 (SI NO 125) granting exemption to Metallurgical Coke reads as under:

Sl No Chapter or Heading or Sub – Description of Goods Standard Rate Additional Duty Rate Condition No

Heading or Tariff Item
125 270400 Metallurgical Coke Nil – –

8.The classification of the Coke Breeze and Metallurgical Coke is not in dispute but the admissibility of exemption notification to Coke Breeze has been denied by the Department on the ground that Metallurgical Coke and Coke Breeze are two different products, the exemption notification since mentions only Metallurgical Coke; therefore, Coke Breeze imported by the appellants are not eligible to the benefit of the said notification. We do not want to dwell much on the meaning and scope of manufacture of Coke Breeze and Metallurgical Coke as the meaning and application of the same has been considered at length by the co-ordinate Bench of this Tribunal in the case of Jindal Steel & Power Ltd. (supra), wherein the Tribunal held as under:-

37.As noted in para 26, the energy information administration data clearly reflects a huge chasm and wide variation between the average price of coke and coke breeze which besides technical parameters, clearly establishes the fact of the two commodities being clearly distinguishable. Its like comparing apples and oranges though nonetheless both belong to the category fruits and grow on trees.

38.As coke breeze and metallurgical coke are two distinct distinguishable commercial products and put to disparate uses because of difference in characteristics and also fetch a different price range in the market, therefore it is natural not to characterize breeze coke as metallurgical coke and consider it as eligible for exemption in terms of notifications supra. Also the Indian Standards Sold Mineral Fuel Vocabulary (IS 3810), (Part 2) 2003, in its Section relating to Sampling Testing and Analysis, refers to several varieties of coke-nut-coke, foundry coke, gaseous coke, large coke, petroleum coke, milled coke etc.-each of the term having its own distinguishing character, name, mining process and uses. It defines blast furnace coke (metallurgical coke) and breeze as under:
“3.16. Blast Furnace Coke- Strong, large coke for use in blast furnaces.

NOTES
1.Blast Furnace coke is generally produced from blends of bituminous coals, which may incorporate additives.
2.Blast Furnace coke usually has a low reactivity to carbon dioxide.
××××××

3.19. Breeze- The undersize after separating the smallest size of graded coke.
NOTE- Breeze is usually less than 10 mm in
size.”

Also it need not be emphasized that it is the complete prerogative of the legislature to select objects to be taxed or determine the quantum of tax (by way of exemptions) and even the courts have held it to be so (UOIV VKC Fortsteps India Pvt. Ltd, (2021 (52) GSTL 513 S.C.).

39.From the foregoing it is clear that metallurgical coke and coke breeze are two distinct and different products having their own separate characteristics and uses. The two in no way can be considered as one and the same and thus at par. Coke Breeze being a byproduct of the process of coke manufacture and not utilizable as such in a blast furnace, where met coke alone fits the bill. As the two products are clearly distinct with wide variation in their sales price, we are of the view that the question of interpretation of an exemption notification and the case law analysis on this aspect of the matter does not actually arise. Language employed in statute is the determination of legislative intent (UOI Dharmendra Textile Processors 2008(231)ELT 3 (SC). Nonetheless, it may be apt for sake of records to state what the Hon’ble Courts have held on this aspect of the subject matter. Thus in the foremost, it is settled law that an exemption notification calls for a strict interpretation and no liberal constriction can be placed to extend the scope of the notification. Reliance for the proposition can be placed on-
(i)Radiant Cables Pvt. Ltd., (2017 (348) ELT 558 T). For the premise if metallurgical coke is eligible for

exemption, coke breeze would not automatically follow.
(ii)BPL Ltd., Vs. Commissioner of Central Excise, Cochin-II (2015 (319) ELT-556 SC).
(iii)Rajasthan Spinning and Weaving Mills, Bhilwara, Rajasthan Vs. Collector of Central Excise, Jaipur, (1995 (77) ELT 474 SC).

(iv)Commissioner of Central Excise, New Delhi Hari Chand Shri Gopal & Ors. (2010(260)ELT 3 SC). For the premise the onus is on the person seeking benefit to establish his eligibility.

(v)Novopan India Ltd., Vs. CCE, and Customs (1994 (Supp(3) SCC606). (vi) Hansraj Gordhandas Vs. HH Dave, ACCE and Customs Surat & others (AIR 1970 SC 755). For the premise plain and clear words in an exemption notification call for strict construction.

(vii)Kasturba Medical College Vs. UOI (2018 (361) ELT 184 Kar.) For the premise calling for strict construction of provisions pertaining to tax exemption.
(viii)UOI V Amazon Seller Services Pvt. Ltd, 2019 (365)ELT 477 Del.) For the premise words in an exemption to be given their natural and normal meaning
(ix)State of Gujarat Vs Arcelor Mittal Nippon Steel India Ltd., (2022 (379) ELT 418 SC).

For the premise if notification is clear and unambiguous, it cannot be given a purposive interpretation.

It is settled law that when an expression in an exemption notification is clear and when there is no scope for assuming any ambiguity, nothing shall be interpreted beyond the plain words of the notification. There is nothing by way of intendment or equity in tax matters and regard to be had to the clear meaning of the word, governing solely by the language of the notification. Following decisions render the said proposition:

(x)Commissioner of Customs Airport) Mumbai Vs. Dilip Kumar & Company, (2018 (361) ELT.577 SC).
(xi)Excon Building Material Manufacturing Co. P. Ltd., Vs. CCE, (2005 (186) ELT 263 SC-3). For the premise interpretation to a notification not borne out of plain

words cannot be ascribed to (xii) CCE, Vs. Sunder Steels (2005 (181) ELT 154 SC-3).
For the premise no words can be added to a notification.

9.Following the aforesaid precedent, we are of the view that benefit of Notification No.12/2012-Cus. dated 17.03.2012 (Sl.No.125) cannot be extended to Coke Breeze imported by the appellants. In the result, the impugned orders are upheld and the appeals are dismissed.

(Order pronounced in Open Court on 28.02.2025)

 

 

(D.M. MISRA) MEMBER (JUDICIAL)

(R BHAGYA DEVI) MEMBER (TECHNICAL)