Coke Breeze Qualifies as Metallurgical Coke When Used in Sintering: CESTAT Grants Exemption to Jindal Steel [Read Order]
CESTAT held that “coke breeze” qualifies as metallurgical coke when used in sintering and granted Jindal Steel & Power Ltd. exemption under Notification No. 12/2012-Cus.
![Coke Breeze Qualifies as Metallurgical Coke When Used in Sintering: CESTAT Grants Exemption to Jindal Steel [Read Order]](https://images.taxscan.in/h-upload/2025/11/12/2104573-coke-breeze-qualifies-metallurgical-coke-cestat-exemption-jindal-steel-taxscan.webp "Coke Breeze Qualifies as Metallurgical Coke When Used in Sintering: CESTAT Grants Exemption to Jindal Steel [Read Order]")
The Hyderabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that “coke breeze” qualifies as metallurgical coke when used for metallurgical purposes such as sintering and granted exemption under Notification No. 12/2012-Cus dated 17 March 2012.
Jindal Steel & Power Ltd., the appellant, operates an integrated steel plant at Raigarh, Chhattisgarh. The company imported Chinese coke breeze through two Bills of Entry dated 21 December 2013 and 30 January 2014 and claimed exemption from basic customs duty under the said notification, which exempts metallurgical coke.
The customs department later disputed the classification, alleging that coke breeze and metallurgical coke are commercially distinct products, and denied the exemption. A show cause notice was issued demanding differential duty and imposing penalties. The adjudicating authority confirmed the demand and imposed a penalty of Rs. 1 crore.
The appellant’s counsel argued that the exemption applies to all coke used in metallurgical operations and not only to blast furnace coke. It was submitted that coke breeze is used in the sintering process, which is a metallurgical operation essential for the manufacture of iron and steel.
The counsel relied on the report of the National Institute of Secondary Steel Technology (NISST), which confirmed that coke breeze is metallurgical coke based on its use. They further argued that the chemical examiner’s opinion was irrelevant because the exemption was based on end use, not chemical composition.
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The departmental representative argued that the chemical examiner’s test report and technical literature distinguished metallurgical coke from coke breeze. They argued that metallurgical coke is of a specific size and strength required for blast furnace use, while coke breeze, being smaller than 10mm, is a by-product that cannot be used directly in blast furnaces.
The two-member bench comprising A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member) observed that the department had not disputed that coke breeze is used in sintering, which is part of the metallurgical process of iron and steel making.
The tribunal explained that sintering involves heating iron ore fines with coke breeze to form sinter, which is then used in the blast furnace to produce iron. The tribunal observed that coke breeze retains the same chemical and metallurgical properties as metallurgical coke and differs only in size.
The tribunal pointed out that Notification No. 12/2012-Cus does not restrict the exemption to blast furnace coke and that a plain reading of “metallurgical coke” includes coke used for metallurgical purposes. It explained that coke breeze, being used as a fuel and reducing agent in sintering, is metallurgical in nature.
The tribunal held that the appellant was eligible for exemption under the notification and set aside the order confirming duty and penalty. The department’s cross-application was dismissed as infructuous.
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