Refractory bricks used for re-lining of furnace are eligible for EPCG scheme

Jai Balaji Industries Limited Vs Commissioner of Customs (Port) (CESTAT Kolkata)

Held that refractory bricks required for re-lining of the furnace are covered within the definition of capital goods and hence eligible for EPCG scheme as per notification no. 102/2009- Cus dated 11.09.2009

Facts-

The Appellants use refractory bricks/materials for lining the furnaces. A refractory brick is designed mainly to withstand high heat, but also has a low thermal conductivity to save energy. Accordingly, the Appellants imported several sets of refractory materials/bricks for re­lining and also for maintenance purposes for the ARC furnace and the 60MT ladle furnace. The refractory materials were imported under the EPCG scheme covered by Chapter 5 of the Foreign Trade Policy (FTP) read with notification no. 102/2009- Cus dated 11.09.2009 and 103/2009-Cus also dated 11-09-2009.

As per the department, the definition of “Capital Goods” included only those refractory bricks/materials which were required for the initial lining of the furnace. Hence, the refractory bricks used for re­lining or maintenance of the furnace were not covered by the definition of ‘Capital Goods’ and hence, not eligible for exemption from duty under the EPCG scheme.

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