2025 (3) TMI 73 - AT - Customs

Coke Breeze denied customs exemption under Notification 12/2012-Cus as distinct from Metallurgical Coke

M/s. Mukand Limited, M/s. Kalyani Steels Limited, M/s. Kirloskar Ferrous Industries Ltd., M/s. SLR Metaliks Limited Versus The Commissioner of Customs, Mangalore

CESTAT Bangalore denied customs exemption under Notification No.12/2012-Cus to imported Coke Breeze. The Tribunal held that Metallurgical Coke and Coke ... Benefit of Notification No.12/2012-Cus. dated 17.03.2012 (Sl.No.125) - imported Coke Breeze - 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. HELD THAT:- The issue has been considered at length by the co-ordinate Bench of this Tribunal in the case of Jindal Steel & Power Ltd. [2024 (1) TMI 1335 - CESTAT KOLKATA], wherein the Tribunal held '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.' Conclusion - The benefit of Notification No.12/2012-Cus. dated 17.03.2012 (Sl.No.125) cannot be extended to Coke Breeze imported by the appellants, as it is not the same as Metallurgical Coke. Appeal dismissed. ISSUES PRESENTED and CONSIDEREDThe core issue in these appeals is whether the imported product 'Coke Breeze' qualifies as 'Metallurgical Coke' under the Customs Tariff Heading (CTH) 2704 0090 and is eligible for exemption under Notification No.12/2012-Cus dated 17.03.2012. The Tribunal considered whether Coke Breeze and Metallurgical Coke are distinct products and if the exemption notification, which specifically mentions Metallurgical Coke, can be extended to include Coke Breeze.ISSUE-WISE DETAILED ANALYSISRelevant Legal Framework and PrecedentsThe legal framework centers around Notification No.12/2012-Cus, which provides an exemption for Metallurgical Coke under Sl.No.125. The Customs Tariff Act, 1975, classifies both Coke Breeze and Metallurgical Coke under CTH 2704 0090. The appellants argue that the lack of technical definitions in the Act or the notification implies that Coke Breeze should be considered Metallurgical Coke. They cite several precedents to support their claim that the exemption should apply based on the plain language of the notification.Court's Interpretation and ReasoningThe Tribunal analyzed the distinction between Coke Breeze and Metallurgical Coke, referencing the Kolkata Bench's decision in Jindal Steel & Power Ltd., which concluded that the two are distinct products. The Tribunal emphasized that the exemption notification's language is clear and unambiguous, and it should be interpreted strictly. The Tribunal noted that the legislative intent and the plain words of the notification do not support extending the exemption to Coke Breeze.Key Evidence and FindingsThe Tribunal referenced various technical documents and industry standards that differentiate Coke Breeze from Metallurgical Coke. It highlighted that Coke Breeze is a byproduct of coke production, with different characteristics and uses compared to Metallurgical Coke. The Tribunal also pointed out the significant price difference between the two products, which further supports their distinct commercial identities.Application of Law to FactsThe Tribunal applied the principle of strict interpretation to the exemption notification, concluding that the plain language of the notification does not encompass Coke Breeze. It reiterated that the notification clearly specifies Metallurgical Coke, and there is no basis for assuming that Coke Breeze falls under this category.Treatment of Competing ArgumentsThe appellants argued that both Coke Breeze and Metallurgical Coke are used in the metallurgical industry and should be treated similarly for exemption purposes. They contended that the absence of specific technical parameters in the notification supports their interpretation. However, the Tribunal dismissed these arguments, relying on established legal principles that require strict interpretation of exemption notifications and the clear distinction between the two products.ConclusionsThe Tribunal concluded that Coke Breeze does not qualify for the exemption under Notification No.12/2012-Cus, as it is not the same as Metallurgical Coke. The Tribunal upheld the orders of the Commissioner of Customs (Appeals) and dismissed the appeals.SIGNIFICANT HOLDINGSThe Tribunal held that 'metallurgical coke and coke breeze are two distinct and different products having their own separate characteristics and uses.' It emphasized that 'an exemption notification calls for a strict interpretation and no liberal constriction can be placed to extend the scope of the notification.' The Tribunal affirmed 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.'The final determination was that the benefit of Notification No.12/2012-Cus. dated 17.03.2012 (Sl.No.125) cannot be extended to Coke Breeze, and the appeals were dismissed.