2017 (11) TMI 1584 - AT - Customs

Import of coal - coking coal or not - benefit of N/N. 21/2002-Cus dated 01.03.2002 - whether the coal imported by appellant under 19 Bills of Entry are eligible for exemption of customs duty under N/N. 21/2002 or otherwise? - the main stand of Revenue is that the Corex technology does not require coking coal and the weakly coking coal said to be imported cannot get the benefit of the exemption - Held that - identical issue came up before the Bench in Mumbai in respect of the coal imported by appellant for using corex furnace through Port in Goa and the Bench in the case of JSW Steel Ltd. 2015 (12) TMI 1389 - CESTAT MUMBAI after considering the entire gamut of the arguments and the findings held in favor of applicants - the self issue is now settled in favour of the main appellant and it has to be held that coal imported by appellants under 19 Bills of Entry is eligible for the benefit of exemption notification under 21/2002-Cus and impugned order has to be held as unsustainable - question of upholding penalties on the other appellants and the main appellant does not arise - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:

1. Eligibility for exemption of customs duty under Notification No. 21/2002-Cus for imported coal.
2. Classification of imported coal as coking coal.
3. Validity of penalties imposed on the appellants.

Detailed Analysis:

1. Eligibility for Exemption of Customs Duty:

The primary issue was whether the coal imported by the appellant under 19 Bills of Entry was eligible for exemption from customs duty under Notification No. 21/2002-Cus. The appellants claimed the exemption for "coking coal" with ash content below 12%. The adjudicating authority had previously denied this exemption, asserting that the coal did not qualify as "coking coal" and thus raised demands with interest and imposed penalties.

2. Classification of Imported Coal:

The Tribunal examined whether the imported coal could be classified as "coking coal." The appellant argued that their technology (Corex furnace) allowed the use of coal directly without converting it into coke, and similar issues had previously been decided in their favor by the Tribunal at Chennai and Mumbai. The Tribunal considered various evidence, including statutory and private documents, statements from company officials, suppliers, and technical literature.

The Tribunal noted that the term "coking coal" was not explicitly defined in the relevant period's notification, leading to disputes. The Tribunal referred to technical literature and standards indicating that weakly coking coal, with a Crucible Swelling Number (CSN) of 1 and above, could be considered coking coal. The Tribunal also considered the chemical examiner's reports, which classified the coal as weakly coking in the majority of cases.

3. Validity of Penalties Imposed:

Given the Tribunal's findings that the imported coal qualified as coking coal and was eligible for the exemption, the penalties imposed on the appellants were deemed unsustainable. The Tribunal emphasized that the exemption notification did not specify an end-use condition for coking coal, and the appellant's coal met the ash content criterion specified in the notification.

Conclusion:

The Tribunal concluded that the coal imported by the appellant under 19 Bills of Entry was eligible for the benefit of exemption under Notification No. 21/2002-Cus. The impugned order was set aside, and the appeals were allowed. Consequently, the penalties imposed on the appellants were also set aside. The judgment was pronounced in the open court on 15/11/2017.