CESTAT Hyderabad- Chinese Coke Breeze Classified as Metallurgical Coke

ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 11.11.2025

CESTAT Hyderabad- Chinese Coke Breeze Classified as Metallurgical Coke

On November 6, 2025, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Regional Bench at Hyderabad delivered a significant judgment in the case of Jindal Steel & Power Ltd vs. Commissioner of Customs, Visakhapatnam. This case revolved around the classification of “Chinese Coke Breeze” and its eligibility for exemption under S.No.125 of Notification No.12/2012-Cus dated March 17, 2012. ​

The Background of the Case

Jindal Steel & Power Ltd (JSPL) operates an integrated steel plant in Raigarh, Chhattisgarh, which includes facilities such as a coke oven plant, sinter plant, and blast furnace. ​ The company imported “Chinese Coke Breeze” under two Bills of Entry dated December 21, 2013, and January 30, 2014, claiming exemption from Basic Customs Duty and Additional Duty under the aforementioned notification. ​ Initially, the exemption was granted, but upon further inquiry, the Customs Department argued that coke breeze does not qualify as “metallurgical coke” and issued a Show Cause Notice (SCN) demanding differential duty, confiscation of goods, and a penalty. ​

The department relied on technical literature, chemical examiner reports, and Board Circular No.56/2003 to assert that metallurgical coke and coke breeze are commercially understood as distinct products. ​ The department argued that the exemption was only applicable to metallurgical coke, not coke breeze. ​

The Arguments Presented ​

Appellant’s Arguments:

1. End-Use of Coke Breeze: JSPL argued that the exemption notification does not specify that only blast furnace coke qualifies as metallurgical coke. They contended that coke breeze, used in the sintering process to produce sinters for blast furnaces, is also metallurgical in nature. ​
2. Technical Literature: JSPL presented reports from the National Institute of Secondary Steel Technology (NISST) and other international studies, which supported the claim that coke breeze is a subset of metallurgical coke based on its end-use in metallurgical operations. ​
3. Sintering as a Metallurgical Process: JSPL emphasized that sintering is a critical metallurgical process used to agglomerate iron ore fines for blast furnace operations, and coke breeze plays a vital role as a fuel and reducing agent in this process. ​
4. Legal Precedents: JSPL cited various judgments, including ITC Ltd vs. CCE, Kolkata-IV and CCE, Bolpur vs. Ratan Melting & Wire Industries, to argue that the exemption notification should be interpreted based on its plain wording and end-use.

Department’s Arguments:

1. Strict Interpretation of Notification: The department argued that the exemption notification explicitly applies only to metallurgical coke, and coke breeze does not qualify. ​
2. Chemical Examiner’s Report: The department relied on the chemical examiner’s findings, which stated that coke breeze does not meet the technical parameters of metallurgical coke. ​
3. Commercial Understanding: The department emphasized that metallurgical coke and coke breeze are commercially understood as distinct products, with different properties and uses. ​

The Tribunal’s Observations and Final Decision

After hearing detailed arguments and reviewing technical literature, the Tribunal made the following key observations:

1. Definition of Metallurgical Coke: The Tribunal noted that there is no specific definition of “metallurgical coke” in the Customs Tariff or the exemption notification. ​ Therefore, the term must be understood based on its plain meaning and end-use. ​
2. End-Use of Coke Breeze: The Tribunal agreed with JSPL’s argument that coke breeze, despite its smaller size, is used in the sintering process—a metallurgical operation—and subsequently in the blast furnace for steel production. ​ This qualifies it as metallurgical coke. ​
3. Chemical Examiner’s Report: The Tribunal found that the chemical examiner’s conclusion was based on limited parameters and did not comprehensively evaluate the metallurgical properties of coke breeze. ​
4. Sintering as a Metallurgical Process: The Tribunal recognized sintering as an essential metallurgical process for iron and steel production, further supporting JSPL’s claim. ​
5. Notification Interpretation: The Tribunal held that the exemption notification should be interpreted based on its plain wording, which does not restrict the definition of metallurgical coke to blast furnace coke alone. ​

Final Verdict

The Tribunal ruled in favor of Jindal Steel & Power Ltd, holding that “Chinese Coke Breeze” qualifies as metallurgical coke under S.No.125 of Notification No.12/2012-Cus. ​ Consequently, JSPL was entitled to the exemption, and the confiscation and penalty imposed by the adjudicating authority were set aside. ​ The department’s cross-application was deemed infructuous and dismissed. ​

Key Takeaways

1. Importance of End-Use: The judgment highlights the significance of end-use in determining the classification and eligibility for exemptions under Customs notifications.
2. Holistic Evaluation: The Tribunal emphasized the need for a comprehensive evaluation of technical literature, standards, and industry practices to arrive at a fair conclusion. ​
3. Sintering as a Metallurgical Process: The recognition of sintering as a metallurgical process is a crucial aspect of this judgment, as it establishes the metallurgical nature of coke breeze. ​
4. Plain Reading of Notifications: The Tribunal reiterated that exemption notifications should be interpreted based on their plain wording, especially in the absence of specific definitions. ​

Conclusion

This landmark judgment sets a precedent for the interpretation of exemption notifications and the classification of goods based on their end-use. ​ It underscores the importance of understanding technical and industry-specific nuances while adjudicating disputes in customs matters. ​ The decision is a significant win for Jindal Steel & Power Ltd and provides clarity on the scope of “metallurgical coke” under the Customs Tariff. ​

Source: CESTAT Hyderabad

Disclaimer

Handy Download:

Write to us at office@aadrikaalaw.com

Tel: +91-11-4999 2707 I +91-9999005379

www.aadrikaalaw.com