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Customs Circular No.56 /2003 dated June, 2003
Sub : Dutiability of Coke Breeze generated in the process of manufacturing of
Pig iron/steel.
I am directed to refer to the subject mentioned above and
to say that notification no. 21/2001 Cus (Sl. 71) dated 1.3.2002 , upto
28.2.2003 provided concessional rate of customs duty on Metallurgical Coke
imported for manufacture of Pig Iron /Steel using a blast furnaces subject to
the condition that procedure prescribed in Customs (Import of Goods at
Concessional Rate of Duty for the Manufacture of Excisable Goods)Rules, 1996, is
followed. Similarly, anti-dumping duty applicable on Metallurgical Coke of
chinese origin is also exempted vide notification no. 69/2000-Cus dated
19.5.2000, provided it is imported for manufacture of Pig Iron/Steel using a
blast furnace and the said procedure is followed. It has been brought to the
notice of the Board that Coke Breeze generated in the process of charging
Metallurgical Coke to the blast furnace is not being considered as waste/scrap
arising in the process of manufacturing Pig Iron/Steel. Consequently, the
Central Excise authorities are demanding payment of differential duty(including
anti-dumping duty) on such quantity of Metallurgical Coke as equivalent to the
Coke Breeze generated on the ground that this portion of the imported
Metallurgical Coke has not been used in the blast furnace.
2. It has been stated that in the process of charging Metallurgical Coke to the
blast furnace, some amount of fine/small size particles (0 to 12 mm), commonly
known as Coke Breeze, are generated. These small particles cannot be charged to
the blast furnace as they clog the blast furnace and adversely affect the
manufacturing process and the quality of product. Therefore, these fine
particles are segregated/screened on the conveyor system before charging
Metallurgical Coke to the blast furnace. The Ministry of Steel has recommended
that Coke Breeze may be treated as process waste and it has further stated that
Coke Breeze (size 0 to 12 mm) generated up to 5% of the gross Metallurgical Coke
may be considered as normal.
3. The matter has been examined. Metallurgical Coke and Coke Breeze are
commercially understood as two different products. They have different
properties (specially calorific value) and uses. Hence, when Metallurgical Coke
is filtered to produce Coke Breeze during the process of charging of
Metallurgical Coke to the blast furnace, a different product is produced which
is chargeable to excise duty under heading 2704.00 which at present has tariff
rate 'nil'. (Even a waste product can be excisable if it has distinct name,
character and use).
4. Further, it cannot be said that Coke Breeze generated in the said
manufacturing process is unutilized Metallurgical Coke. As stated above Coke
Breeze is a different product which arises in the course of overall
manufacturing process in which Metallurgical Coke is used as raw material. It
cannot be said that part of the Metallurgical Coke, equivalent to Coke Breeze
generated, has not been used in manufacture of Pig Iron/Steel.
5. In view of the above, it is clarified that no customs duty or anti-dumping
duty should be charged on the amount of Coke Breeze cleared from the factory.
However, if the amount of coke breeze is more than 5%, the Assistant
Commissioner/Deputy Commissioner concerned should enquire into it and take
decision on merits .
6. This may be brought to notice of all concerned.
7. Please acknowledge receipt of this circular.
8. Hindi version will follow.
Pramod Kumar
AO (TU)
F.No. 528/50/2003-Cus (TU)
Government of India
Ministry of Finance
Department of Revenue
Tariff Unit