CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, MUMBAI REGIONAL BENCH - COURT NO. 2 Customs Appeal No. 86427 of 2016 [Arising out of Order-in-Original No. 21/2015-16/RT-13/NS-GEN dated 29.02.2016 passed by the Principal Commissioner of Customs (NS-GEN), Jawaharlal Nehru Custom House (JNCH), Nhava Sheva.]

India Steel Works Limited .… Appellant

1101, Tower 2, India Bulls Finance Centre, Senapati Bapat Marg, Elphinstone (West), Mumbai – 400 013.

Versus Commissioner of Customs (NS-General), JNCH …. Respondent Jawaharlal Nehru Custom House (JNCH)

Nhava Sheva, Taluka Uran, District Raigad Maharashtra – 400 707.

WITH Customs Appeal No. 86428 of 2016 [Arising out of Order-in-Original No. 21/2015-16/RT-13/NS-GEN dated 29.02.2016 passed by the Principal Commissioner of Customs (NS-GEN), Jawaharlal Nehru Custom House (JNCH), Nhava Sheva.]

Madhav Kanade .… Appellant General Manager-Taxation of M/s India Steel Works Limited

1101, Tower 2, India Bulls Finance Centre, Senapati Bapat Marg, Elphinstone (West), Mumbai – 400 013.

Versus Commissioner of Customs (NS-General), JNCH …. Respondent Jawaharlal Nehru Custom House (JNCH)

Nhava Sheva, Taluka Uran, District Raigad Maharashtra – 400 707.

APPEARANCE:

Shri Akhilesh Kangsia, Advocate for the Appellant Shri Ram Kumar, Authorized Representative for the Respondent CORAM:

HON’BLE S.K. MOHANTY, MEMBER (JUDICIAL)

HON’BLE MR. M.M. PARTHIBAN, MEMBER (TECHNICAL)

FINAL ORDER NO. A/85405-85406/2026 Date of Hearing: 17.11.2025 Date of Decision: 13.03.2026 PER: M.M. PARTHIBAN These appeals have been filed by M/s India Steel Works Limited, Mumbai and Shri Madhav Kanade, General Manager of the said appellant company (herein after, referred together, as ‘the appellants’) assailing the Order-in-Original being No. 21/2015-16/RT-13/NS-GEN dated 29.02.2016 (herein after referred to as ‘the impugned order’) passed by the Principal Commissioner of Customs (NS-GEN), Jawaharlal Nehru Custom House (JNCH), Nhava Sheva.

2.1 The facts of the case, leading to these appeals, are summarized herein below:

2.2 The appellant company herein inter alia, is engaged in manufacture of stainless-steel products viz. billets, blooms, Bars & Rods etc., and for that purpose had imported subject goods viz., ‘waste and scrap of stainless steel, Stainless Steel billets and Ferro alloys’ and used the same for manufacture of stainless-steel products. These imported goods were supplied through Free Trade Warehousing Zone (FTWZ) M/s Arshiya Supply Chain Management Limited, a unit situated within FTWZ. Whenever the imported goods are sold in the Domestic Tariff Area (DTA) and such sale not being exempt from payment of sales tax/VAT, exemption from payment of the whole Special Additional Duty of Customs (SAD) leviable under sub– section (5) of Section 3 of the Customs Tariff Act, 1975 in terms of Notification No. 45/2005-Customs dated 16.05.2005 was available to the importers. Upon receipt of the imported goods at the appellants factory, the said goods undergo further processing for manufacture of stainless steel products and thereafter such final products are sold to dealers/customers in DTA upon payment of applicable VAT/sales tax. On the above basis, the appellants had submitted an undertaking with the Specified Officer of FTWZ declaring that appropriate VAT/CST shall be paid upon sale of final products manufactured by them in the DTA, and on such basis availed the SAD exemption benefit available under the said Notification dated 16.05.2005.

2.3 On the basis of intelligence developed by the Directorate General of Central Excise Intelligence, Mumbai Zonal Unit (DGCEI) that the appellant is availing exemption benefit of SAD on imported goods which are used in the factory, detailed investigations were conducted and on completion of such investigation Show Cause Notice (SCN) dated 16.06.2015, proposing for demand of SAD of Rs.4,06,30,866/- along with interest under Section 28(4) of the Customs Act, 1962 by invoking the extended period along with proposal for c