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M/s. Jindal Vijayanagar Steels Ltd. Versus Commissioner of Customs, Mangalore

2017 (6) TMI 215 - CESTAT BANGALORE

Benefit of exemption under Sl. No. 125 of N/N. 20/1999-Cus - denial on the sole ground that the imported scrap is used in the basic oxygen furnace and not in the electric arc furnace - Held that: - Sl. No. 125 of N/N. 20/1999-Cus., dated 28.02.1999 grants exemption to melting scrap of Iron or Steel for use in electric arc furnace, induction furnace or for melting in hot blast cupola or for supply to a unit for use in electric arc furnace, induction furnace or for melting in hot blast cupola. - .....

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ated 28.2.99 - appeal allowed - decided in favor of appellant. - Excise Appeal No.314/2004 & Customs Appeal Nos.28603 -28604/2013 - 20809-20811/2017 - Dated:- 1-6-2017 - Mr S. S. Garg, Member (Judicial) And Mr. V Padmanabhan, Member (Technical) Shri G Shivadass, Advocate for the Appellants Shri Shri N Jagdish, Dr. J Harish, DR for the Respondent ORDER Per: V. Padmanabhan Through this order, we are deciding the Customs Appeals Nos. 28603 and 28604 of 2013 as well as Excise Appeal No 314/2004. The .....

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dated 23.02.2014 92/2000 dated 07.08.2000 Order-in-Appeal No. & Date - 467/2003-CE dated 23.12.2003 Issue Denial of exemption under Sl. No.125 of Notification No.20/1999-cus. Dated 28.02.1999 to imported Shredded Steel Scrap for failure to furnish end use certificate Rejection of application for End Use Certificate 2. The Appellant is an integrated steel plant who manufactures steel products including Hot rolled Products. The Appellant uses a Corex furnace for making hot metal which in turn .....

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filed Bills of Entry claiming exemption under Sl. No.125 of Notification No. 20/1999-Cus. The Appellant filed necessary bond /undertaking to use imported scrap in the electric arc furnace. Based on the above undertaking, the Bills of Entry were provisionally assessed extending the benefit of concessional rate of duty. 4. The Appellant, vide letters dated 14.07.2000 and 17.07.2000, filed application before the jurisdictional Asst. Commissioner of Central Excise for issue of end use certificate a .....

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arc furnace, induction furnace or hot blast cupola. Hence, the application for end use certificate was rejected. 6. Being aggrieved by the above Order, the Appellant filed appeal before the Commissioner (Appeals) who passed impugned Order-in-Appeal No. 467/2003 upholding the rejection of end use certificate on the ground that scrap used as coolant in blast furnace is not entitled to exemption. 7. In the meanwhile, the Appellant was issued demand notices dated 04.08.2000 and 09.08.2000 by Custom .....

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failure to produce end use certificate. 9. With the above background, we have heard Shri G Shivadass, learned Advocate for the appellant as well as Shri N Jagdish, and Dr. J Harish, representatives of revenue. 10. Learned Advocate submitted on behalf of the appellant that they were entitled to exemption under S.No. 125 of Customs Notification No. 20/99 dated 28.2.99. He advanced the following grounds to support the above arguments. i) Sl. No.125 of Notification No.20/1999-Cus., dated 28.02.1999 .....

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use contemplates intended for use and not actual use. Prakash Metal Crafts Industries v. Commissioner of Commercial Tax - 2016 (337) ELT 342 (M.P) Union of India Vs. Hindustan Zinc Ltd. - 2014 (303) E.L.T.T. 321 (S.C.) Mangalore Chemical & Fertilizers Ltd vs. CCE, - 2009 (248) ELT 647(Tri-Bang); Clough Engineering Ltd. Vs. Commissioner of Customs (Import), Mumbai - 2006 (198) E.L.T. 457 (Tri. Mumbai); iv) In the instant case, the Appellant has used the scrap in the basic oxygen furnace as a .....

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sic oxygen furnace and in addition also directly charging steel scrap. Thus the steel scrap is used in the electric arc furnace directly or indirectly and hence the Appellant is entitled to exemption. v) The impugned Order has denied the exemption on the sole ground that the imported scrap is used in the basic oxygen furnace and not in the electric arc furnace. The Appellant submits that the manufacture of steel is a continuous process and the liquid steel emerging from the basic oxygen furnace .....

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the process of steel making in the appellants factory. The flow chart, which is reproduced below, also indicates that the imported scrap is partially added at the level of basic oxygen furnace and the rest of the scrap is added at the stage of electric arc furnace. He also brought to our notice that the liquid steel arising out of basic oxygen furnace is transferred into electric arc furnace for further refinement. 13. Learned DR supported the impugned orders. He further submitted that in terms .....

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perused the records. Customs Notification No.20/1999 dated 28.2.99 (S.No.1 -5) extends the concessional rate of duty for import of molten scrap of iron / steel. The relevant entry is reproduced below: 125 72.04 Melting scrap of iron or steel (other than stainless steel or heat resisting steel), for use in electric arc furnace or induction furnace or melting in a hot blast cupola or for supply to a unit for use in electric arc furnace or induction furnace or melting in a hot blast cupola 5% 17 1 .....

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ion; and (b) the importer produces to the said Additional Commissioner, within six months or such extended period, as that Assistant Commissioner, may allow, a certificate issued by the Assistant Commissioner of Central Excise in whose jurisdiction the said melting scrap of iron and steel has been used in electric arc furnace or induction furnace or melting in a hot blast cupola, that the said melting scrap has been so used. 15. The main reason cited by the original adjudicating authority as wel .....

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ed to reflect the process of steel making in the appellants factory. According to flow chart as well as the submissions made, a part of the imported melting scrap is charged into the basic oxygen furnace. The rest of melting scrap along with other materials such as lime, ferro alloys etc. are charged into the electric arc furnace. The flow chart further indicates that the liquid metal arising out of basic oxygen furnace is entirely fed into the electric arc furnace along with the rest of scrap a .....

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e electric arc furnace which is the condition in the notification. Further, they have not taken into account the fact that a significant portion of the melting scrap is also charged into the electric arc furnace for further processing. Both the authorities below have also not taken cognizance of the fact that scrap, after processing and mixing with the molten metal in the Basic Oxygen Furnace has been loaded into the electric arc furnace for further processing. Considering this route taken by th .....

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