The report cited an official in the ministry as saying that The ministry is concerned about a slowdown in the capital goods industry by 6ZFkcr

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									                                              PART-1
EDITORIAL
For giving boost to the sagging demand of domestic steel industry, it is necessary to encourage
major steel consuming industries like Automobile, building construction industry, realty sector,
infrastructure etc. But in the present scenario of economic slow down all over the world there are
severe slumps in Automobile, building construction, real estate etc and other steel consuming
industry. Due to liquidity and credit crunch demand for Automobiles has slowed down and major
automobile industries are cutting their production. It is well known that leading realty companies
are struggling for survival.

In such scenario the indispensable step for the Government is to infuse life to the economy by giving
impetus to the growth of infrastructure. Infrastructure growth will have a multifaceted effect in the
growth of the other sector of the economy helping raising Index of Industrial Production (IIP).
Realizing the importance of Infrastructure growth, government is planning to modify its Public
Private Partnership (PPP) scheme to lure more investments into this sector. The country needs to
invest $500 billion over the next 5 years to build new infrastructure, as per the Planning
Commissions estimate. The PPP scheme, which involves the state and Private entrepreneurs sharing
costs to set up project, is the government's strategy to source investment into the sector. To attract
funds from private parties, the government would identify specific projects which would motivate
them to invest. For sectors like roads, ports, airports and telecom projects it is to be identified
whether it is the facilitating environment offered by states or it is driven by Project sizes and return
on investment for specific industry sector. Once that is identified then those states that have failed to
attract investments in such collaborative projects will be advised accordingly with necessary
support from the centre. Under PPP scheme, present pattern of sharing finance is up to 40% of the
cost of project is invested by Government. Private investors put in about 30% and banks fund the
rest. The infrastructure companies that need long term funds at low cost are finding difficulties to
raise money at attractive rate in the present situation of credit crunch.

The government is working on a mechanism to monitor implementation of infrastructure projects
and ensure that the recent measures taken to boost infrastructure spending deliver results. The
Prime Minister, Manmohan Singh has emphasized on increased investment in infrastructure which
is imperative in sustaining the economy's growth. He has assured that the government would
review the infrastructure projects and programmes across the public sector and PPP to ensure that
they do not suffer from cash shortage.

Such action being taken by government giving priority attention to the infrastructure development
would definitely lead the domestic steel industry and the overall economy of the country towards the
path of progress and prosperity.

MEMBERS GENERAL INFORMATION

Trade & Investment Mission to Trinidad and Tobago by the High Commission.
The High Commission of the Republic of Trinidad and Tobago has decided its 2nd Trade and
Investment Mission to Trinidad and Tobago during the period June 22nd-27th June, 2009.
The High Commission’s Trade and Investment Mission will also coincide with the Trade and

ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009                     3
Investment Convention (TIC) 2009 to be held from June 24th -27th June, 2009 in Trinidad.

Members interested in further information can obtain the same from www.tic-tt.com.

Members can also contact the High Commission for further information, at the following:

               Mrs. Navneet Sinha
               High Commission of the Republic of Trinidad and Tobago
               Tel: 46007562 (Direct) or 46007500 (Extn.114)
               Website: www.hcttrademission.com

MEETING ATTENDED BY AIIFA REPRESENTATIVES

1.       PHD-CCI UP Committee Meeting – 15.12.2008

The U.P. Committee of PHD Chamber of Commerce and Industry, organized Interactive
session with Shri Desh Deepak Verma, Principal Secretary, Institutional Finance,
Commercial Tax & Registration, Government of Uttar Pradesh on 15th December 2008 at
New Delhi. Mr. J.K. Arora, President AIIFA and Mr. L.N.Goswami Executive Director, AIIFA
attended the Interactive session. The meeting commenced by highlighting issues by the
Chairman U.P. Committee of PHDCCI which are needed to be considered by the
Government. Some of those points are :-

        Uttar Pradesh should abolish Entry Tax as it is a regressive form of taxation, an Inter
         State trade barrier and is not in tune with the objective of creating a national
         common market. In the interim period the entry tax be made vatable for industry and
         accordingly the rules and procedures be amended.

        A review of the method to raise revenue is required in the context of the global melt
         down which has started to adversely affect industry in India as well. This has already
         prompted Government of India to reduce Excise Duty and offer other forms of relief in
         post Budget, it has given relief of Rs. 40,000 crores in indirect taxation alone.

        The state has withdrawn incentive policy by way of exemptions after the year 2000
         but many units have made heavy investments after this period. States like
         Maharashtra & Gujarat are providing industry specific incentives and Uttarakhand &
         Himachal Pradesh are providing Central Government incentive package for promotion
         of industry but in the absence of promotional measures in UP, investment has moved
         to adjoining States. It is therefore suggested that the State should draw a roadmap
         for attracting industry and the incentive scheme applicable to existing Industry as
         well.

Mr. J.K.Arora, President AIIFA, strongly pleaded for the abolition of Entry Tax. On behalf of
AIIFA a written representation was submitted by the President to the Principal Secretary.
Against the Entry Tax many other participants endorsed Mr. Arora’s view.

ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009             4
Besides Entry Tax, the discussions on following issues were also held:-

     1. Value Added Tax (VAT) on Iron & Steel Industry and on various other products--Rate
        of VAT and procedural issues related to Vat.
     2. Incentives for Promotion of Industry.
     3. Working of check Posts etc.

After hearing problems and suggestions from the participants, the Principal Secretary, Mr.
Desh Deepak Verma made his remarks and observations, the gist of which is outlined
below:-

      Field level officials of the department have been advised to hold meetings with
       industry & trade representatives regularly.

      Since global meltdown is adversely affecting industry, the preference for reducing tax
       rates is understandable but at the same time it is also necessary for the State to raise
       revenue for meeting its obligation. The state government is considering options to
       Entry Tax for raising revenue and in a fortnight a package of relief would be
       announced.

      In the next 2 months, 100% computerization of the Commercial Tax department
       would be completed as against 70% at present. Furthermore, within a month online
       returns can be filed by the assesses.

      Grievance Redressal meetings shall be organized on the 15th of the very month and
       Shri Mohammed Mustafa, Additional Commissioner, Commercial Tax NOIDA agreed
       to do the needful. The day to day procedural hassles faced by assesses shall be
       discussed and resolved on the spot.

2.      UNDP-GEF Project Steering Committee Meeting - 23rd December, 2008

The UNDP-GEF assisted, Ministry of Steel’s Project on “Removal of Barriers to Energy
Efficiency Improvement in Steel Re-Rolling Mills” has formally commenced from April 2004.
This 5 years duration project has a budget provision of USD 31.86 million (32.20 million
inclusive of the preliminary expenditure towards project development stage). For monitoring
the project, a Project Steering Committee (PSC) has been constituted, of which All India
Induction Furnaces Association is a member represented by President of AIIFA. PSC
functions under the Chairmanship of Secretary, Ministry of Steel, Government of India. The
Project Management Cell (PMC) is the body for carrying out the Project.

In the 6th Meeting of PSC held on 21st Feb, 2005 it was decided to include Induction
Furnaces as a part of the project for the composite units, who have I.F. as well as RRM in
the same complex as an integrated unit. Consequently the project on “Technology
Development for Induction Furnaces” was taken up by PMC with the aim of Reduction of
Power Consumption. For this Project of Induction Furnaces, an Advisory Committee has

ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009            5
been formed as a sub-committee of PSC. The Advisory Committee consists of:-

   1. Mr. D.Kashiva-                                                          Chairman
      Addl. Industrial Advisor Ministry of Steel
   2. Mr. J.K.Arora-President-AIIFA                                           Member
      Alternate-Mr. L.N.GOSWAMI-E.D-AIIFA
   3. Mr. R.K.Jindal-AISRA                                                    Member
   4. Mr. R.K.Bagchi—NISST                                                    Member
   5. Dr. S.C.Koria-IIT, Kanpur                                               Member
   6. Mr. G.Mishra-PMC                                                        Convener

PMC invited proposals from following Technology providers/equipment suppliers for
undertaking the project for Induction Furnaces.

   1.   M/s   Electrotherm (I) Ltd, Ahmedabad.
   2.   M/s   Inductotherm (I) Pvt. Ltd, Ahmedabad.
   3.   M/s   Megatherm Electronics Pvt. Ltd, Kolkata.
   4.   M/s   SEVAT, Kerala.

Out of the four, only two M/s Electrotherm & M/s SEVAT responded to the enquiry of PMC.
In a Meeting of the Advisory Committee held on 31st Oct, 2008 at PMC’s office in New Delhi,
the above two organizations, presented their proposals. M/s Electrotherm expressed that
there was hardly any scope for energy reduction in the Induction Furnaces presently being
manufactured in the country. However they have R&D proposal for de-phosphorization and
de-sulphurization which they have already submitted to the Ministry of Steel.

M/s SEVAT, in its presentation expressed the possibility of R&D for energy reduction and
quality improvement. Accordingly prima facie it was decided that M/s SEVAT, may be
considered for awarding the project.

The 13th Meeting of the Project Steering Committee was held on December 23, 2008 in
Udyog Bhavan, Ministry of Steel under the Chairmanship of Dr. Udai Pratap Singh, Jt. Secy
Ministry of Steel. Mr. J.K.Arora, President AIIFA and Mr. L.N.Goswami, E.D, AIIFA
attended the meeting.

One of the agenda points of the 13th meeting of PSC was to select technical service
provider/consultant for taking up the project of technology development of Induction
Furnaces. It was decided in the meeting that the proposal of M/s SEVAT is to be further
scrutinized by following members of the advisory committee, as suggested by Dr. Udai
Pratap Singh.

   1. Mr. J.K.Arora-AIIFA
   2. Mr. R.K.Bagchi-NISST
   3. Dr. S.C.Koria-IIT, Kanpur.

Chairman conducting the PSC meeting requested the above members of PSC that after

ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009              6
examining the proposal of M/s SEVAT they should submit their opinions to the PSC which
will be discussed in the next meeting of PSC.

GLEANINGS FROM THE PRESS

Growth of Indian crude steel production since 1980
The growth of crude steel production in India reached 53.080 million tonnes in 2007 up by
7.3% YoY

The year wise details are given as under
Year              Volume             Change
1980              9.514
1981              10.765             13.1%
1982              10.997             2.2%
1983              10.237             -6.9%
1984              10.549             3.0%
1985              11.936             13.1%
1986              12.197             2.2%
1987              13.121             7.6%
1988              14.309             9.1%
1989              14.608             2.1%
1990              12.963             -11.3%
1991              17.100             31.9%
1992              18.117             5.9%
1993              18.155             0.2%
1994              19.282             6.2%
1995              22.003             14.1%
1996              23.753             8.0%
1997              24.415             2.8%
1998              23.480             -3.8%
1999              24.296             3.5%
2000              26.924             10.8%
2001              27.291             1.4%
2002              28.814             5.6%
2003              31.779             10.3%
2004              32.626             2.7%
2005              45.780             40.3%
2006              49.450             8.0%


ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009      7
2007              53.080             7.3%
In million tonnes
Source – worldsteel

Indian steel export in December surges by 36%
PTI reported that price stability in the global market has helped Indian steel manufacturers clear
stockpiles through exports, which bounced back in quantity by an impressive 36% in December
2008, though sales realizations remained a big worry for the industry. Official sources said that
steel exports reached 2.29 million in December reversing from a negative trend in November
when exports had dropped to 1.8 million from 2.4 million in October. For the April to December
period, steel exports have declined by 24% to 2.7 million tonne from 3.5 million tonne in the
comparable period of last fiscal.

JSPL launches CSR program in Chhattisgarh
Under the activities of Corporate Social Responsibility, Jindal Steel & Power Ltd, the biggest
private sector investor in the state of Chhattisgarh has launched women empowerment program
"Uthhan" in Raigarh district on January 8th 2008. Utthan is a basically 12 days multipurpose
and multi dimensions training cum awareness program. During the program period the women
participants from rural areas will be introducing to various technical, economical, social and
cultural aspects of a happy, productive and healthy life for individual and family. 50 women from
10 different villages; ie Gare, Khamria, Dhaurabhata etc are participating in this training
program. Mr A K Mukherji ED of JSPL said that "We believe that in society, a woman has
various obligations towards her family, society and nation. Since Family or Home is the nucleus
of any civil society, all efforts should be made to enable Women to take more and more
responsibility to build up socially, economically and culturally enriched family units to contribute
to the country's National Development Plan. " Mr Mukherji added that to fulfill this objective,
strong efforts should be made to develop the abilities and attitudes of women, specially in the
backward rural areas, to enable them to participate actively and positively in the development of
family and society. He said that "It is the very basic necessity of a home-maker to be aware of the
various aspects of Home-economics and Healthy life-Style to make the family happy and
productive. To meet the purpose we have launched a Training program for the women of Raigarh
District."

Macroeconomic indicators - Economy to grow at 7%: PM
According to prime minister of India, India's economy is expected to grow 7% in the fiscal year to
March 2009 despite the global slowdown and will maintain a strong pace of expansion in coming
years. Mr Manmohan said that Asia's third-largest economy expanded by 7% in the September
quarter, easing from a scorching near 9% average growth in the last four years as the global
financial crisis and high borrowing costs tripped up activity. He said that "Despite the global
economic downturn, the fundamentals of the Indian economy continue to remain strong. We
expect to achieve a growth rate of about 7% this year which will be among the highest in the
world." Economists and government advisers and officials expect expansion to moderate to
around 7 per cent this fiscal year and the central bank's chief said last month that 2009/10
looked like being an even more challenging year. The central bank has cut its key lending rate by
350 basis points since October while the government announced an INR 200 billion stimulus
package and cut duties on manufactured products to lift growth in a slowing economy. Mr Singh
ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009                8
said that "Much of India's growth is internally driven, and I expect we can maintain a strong pace
of growth in the coming years that certainly will be our ambition."

Chinese steel exports to face challenge in 2009
It is reported that Chinese steel exports saw dramatic change in 2008 since export tonnages
experience both brilliant surge in H1 and swift and sharp drop in H2. As per report, January to
November steel exports totaled 53.09 million tonnes down by 3.2% YoY. While imports reached
14.46 million tonnes during the same period, down 1.07 million tonnes or 6.9% YoY. Top five
export destinations are South Korea, the United States of America, Vietnam, Italy and Saudi
Arabia in terms of export tonnage. Evidently, 2008 is a good year for Chinese steel exports,
however, most exporters are not optimistic in 2009.

1. Global economy slowdown has led to a severe drop in steel consumption. South Korean Steel
Association has already forecast an evident decrease in steel demand in 2009. Japan also sees
little possibility of increase. Eurofer pointed out in its 2009 steel consumption analysis that there
would be no recovery in steel demand till Q3. While such emerging economies as Middle East
countries also have cut investment in construction due to substantial drop in oil prices.
Inventories of imported rebar are said to have exceeded 1 million tonne and it takes at least four
to 5 months to digest. Further, World Steel Association did not give its forecast for global steel
demand in 2009 and just concluded that its growth would not be lower than that of GDP. As a
matter of fact, many institutions have been expecting a 5% decrease in world steel consumption
in 2009. In face of such a sluggish market, steel makers have already cut output to prevent
oversupply. For example, ArcelorMittal planned to reduce production by 35 million tonnes or
35%.

2. The appreciation of C versus other currencies has set a barrier for Chinese steel exports.
USD/CNY saw almost no increase since June 2008. By comparison, the currencies of steel
export destinations have seen remarkable depreciation with USD among others, KRW, EURO
and Dong lost 40%, 19% and 10% respectively. In addition, Malaysia, Philippines, India, Ukraine,
Turkey and Russia also has witnessed a deprecation of 14%, 20%, 26%,40%, 30% and 17%
respectively for their currencies. This not only weakens the purchase ability of some importers
and has resulted in less competitiveness of Chinese steel products in Middle East area.

3. Export policy is also not in the interests of steel exports for instance, Chinese wire rod and
rebar exports are levied 15% tax.

4. Trade protection measures taken by other countries would bar steel imports from China. For
example, imports of Chinese fasteners into EU would be levied 87% anti dumping tax though its
own analysis illustrate that the increase of such steel products has not hurt producers in the
destination. Such a measure is more likely to be driven by politics. Other countries would also
follow step to take measure to protect their own steel industries.

Indian steel ministry mea sures to tackle global financial crisis
In order to tackle the effects of global financial crisis in the steel sector, India Government has
withdrawn all export duties on steel, reintroduced Duty Entitlement Pass Book benefits and
imposed 5% import duty on iron and steel items. Hot Rolled Steel has also been brought under

ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009                 9
restricted category under Indian Trade Clarification Harmonized System of Coding, so as to
regulate its cheap imports. The key measures are summarized below:

1. Export duty on steel products withdrawn since October 31st 2008
2 Import duty on steel products re-imposed at 5% from November 18th 2008
3. DEPB on steel items reintroduced since November 14th 2008
4. HR Coil brought under Restricted Category to regulate its imports.

Export duty in iron ore fines amended to INR 200 per tonne with effect from October 31st 2008
and further to 8% advalorem with effect from November 7th 2008. The export duty on iron ore
fines was subsequently withdrawn whereas export duty on all other varieties of iron ore was
reduced to 5% advalorem with effect from December 7th 2008. To address the likely problems
arising out of the global melt down, 5 task forces coordinated by SAIL, have been set up to
monitor production, ongoing modernization projects in SAIL, procurement of raw materials,
monitoring import of coal and logistics and financial management. These task forces are expected
to help the PSUs in formulating strategies consistent with the existing market conditions.

R&D activity in Indian steel sector insufficient
BL reported that research and development in the steel sector in India has reached a low
point. According to officials in the ministry of steel, there are hardly any proposals from any
research agencies, steel manufacturers or the engineering colleges for taking up steel
related research projects. Mr GK Basak Executive Secretary of JPC said that “Funds are
available with us for research and developmental projects. But we are just not getting
adequate proposals. None of the colleges, companies are coming up with proper proposals.”
Mr Basak said that “Every year we have INR 50 crore from the Steel Development Fund for
such activities. We have advertised in newspapers, in the industry magazines inviting
proposals but we are not getting proposals.”

According to Dr AS Feroz steel consultant and former chief economist of JPC, one of the
reasons is that the steel manufacturers are outsourcing a chunk of their R&D requirements
from the equipment suppliers, which are mainly foreign multinationals and enjoy the
benefits of their research. He however, said that many special grade steels are still not
manufactured domestically for which the companies will either need to buy technology or
develop them internally. The domestic steel manufacturers also have been found to be
spending extremely small amounts for R&D activities. According to data on R&D spending
provided by the three big steel makers Steel Authority of India Ltd, Rashtriya Ispat Nigam
Ltd and TATA Steel to the Ministry of Steel, investment in this area is minuscule compared
to their profits. The activities undertaken till now by these companies are mostly around
productivity improvements, energy conservation, beneficiation of raw materials and new
product developments. Officials added that in the current year also the same trend
continues. During April to September 2008, SAIL has invested INR 69.11 crore under R&D.
The corresponding figures for RINL and TATA Steel stand at INR 14.20 crore and INR 35
crore respectively.

Macroeconomic indicators - CMIE revises industrial production forecast
PTI reported that the Centre for Monitoring Indian Economy has revised its forecast for

ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009             10
industrial production growth in 2008-09 from 6.3% to 4.5% indicating a downward trend.
CMIE in its monthly report said that “While lower inflationary expectations and a possible
consequent fall in interest rates were expected to boost industrial growth in the H2 of FY
2009, the global financial crisis cast their shadow on these expectations.” As per report,
the jolt of October 2008 pulled down the cumulative growth in the IIP during April to
October 2008 to 4.1%. The manufacturing units cut down on production because of the
sharp slump in commodity prices, insufficient working capital finance, slowing export
demand and the general uncertainty and skepticism in the business community. CMIE
said that industrial output, measured in terms of the Index of Industrial Production
declined by 0.4% in October 2008. This is for the first time in the last 14 and half years the
industrial growth fell into the negative territory.

Major initiatives taken by Indian steel ministry
It is reported that during April to September 2008, India Government took a number of fiscal and
administrative steps to contain steel prices. These include waiver of import duty on all non alloy
steel, pig iron, sponge iron, ferroalloy, zinc and met coke, complete withdrawal of countervailing
duty on Thermo Mechanically Treated bars & structurals, imposition of export duty on certain
iron and steel items as well as withdrawal of Duty Entitlement Pass Book facilities on certain
steel items. Gist of fiscal measures taken during the year for achieving price stability April to
September 2008 is given below:

   1. Import duty on all non alloy steel, zinc, ferroalloys and met-coke revised to nil from 5%
      with effect from April 29th 2008.
   2. Countervailing Excise duty withdrawn on TMT bars and structurals
   3. Export duty at the rate of 15% imposed on May 10th 2008 on all flat products. This was
      subsequently withdrawn on June 13th 2008 on assurance of major steel producers.
   4. Export duty at the rate of 15% imposed on May 10th 2008 on pig iron, sponge iron, scrap,
      ingots and all categories of non alloy semi finished steel.
   5. Export duty at the rate of 10% was imposed on long products such as bars, wire rods,
      angles etc on May 10th 2008. This was later revised to 15% with effect from June 13th
      2008
   6. Ad-valorem export duty of 15% imposed on iron ore of all categories and grades with effect
      from June 13th 2008
   7. 5% import duty on pig iron, semi finished, flat and long category of products with effect
      from November 18th 2008.

OECD sees slowdown affecting steel demand and outlook
The impact of the global economic crisis on the steel industry has dominated the discussion by
the government and industry representatives present at the OECD Steel Committee Malaysia
World Steel Association workshop held in Kuala Lumpur on December 15th 2008 to December
16th 2008. The current financial turmoil has a severe impact on the steel industry. Steel demand
in all countries is linked to fixed capital investment, which in turn is highly dependent on capital
availability. Tighter credit conditions will reduce construction activities and other related projects.
Lower confidence also has a strong impact on the spending on durables such as automobiles,
appliances and other steel intensive goods. Construction activity in China alone is estimated to
contribute slightly less than a fourth of global steel demand. The investment in the real estate

ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009                   11
industry in China is showing signs of slowing and housing prices are dropping in many major
cities. Property-market risks have heightened in India and Russia. Real estate investment in
Russia in particular registered a sharp slowdown to 8% recently, down from 24% a year ago. This
was due mainly to a tightening of credit from banks.

The decline in steel demand is also expected to lead to changes in trade policy in many countries,
in order to encourage export growth in response to weakness in domestic markets and to support
domestic producers. China, for example, has decided to remove export taxes on some finished
steel products, including hot rolled coil, HR sheet, plate, most heavy sections, welded pipe, most
wire products and most alloy steel, effective on December 1st 2008. However, export duties for
semis, rebar, wire rod, bar and light sections remain unchanged. Taiwan has relaxed its control
on exports of steel scrap, billet and rebar, by allowing exporters more freedom to export these
products for the next six months from October 28th 2008. Vietnam recently removed export duty
for billet, effective on November 17th 2008. At the same time, Vietnam also increased its import
duty on cold rolled coil from 5% to 7%, effective on October 12th 2008. OECD has predicted that
the global economy would start to recover in late 2009. China’s steel demand is expected to
continue to increase in view of its expanding industrial production and urbanization trend. India,
with its low steel consumption of 43 kilogram per capita in 2007, has tremendous potential for
growth. Investment on infrastructure in other developing countries will continue. Strong
population growth which results in the need for housing and rising incomes will add further
stimulus to construction activity.

Region wise crude steel pro duction estimates for 2008
World crude steel production in 2008 for the 67 countries reporting to the world steel is
estimated, by www.steelguru.com, to be 1.309 billion tonnes down by 2.6% YoY as compared to
1.344 billion tonnes in 2007. The estimation has been made by assuming the level of crude steel
out put in December 2008 at levels similar to that of November 2008.

              The estimates and YoY change is as under
            Region                    2008 E           2007                           Change
            Total                               1309.89               1344.27         -2.6%
            Asia                                744.83                754.57          -1.3%
            EU (27)                             201.16                210.19          -4.3%
            North America                       128.59                132.83          -3.2%
            CIS (6)                             113.1                 124.01          -8.8%
            South America                       48.91                 48.25           1.4%
            Other Europe                        31.42                 30.45           3.2%
            Africa                              17.12                 18.76           -8.7%
            Middle East                         15.96                 16.45           -3.0%
            Oceania                             8.79                  8.75            0.5%
                                                      In million tonnes
                                                      2007 data from world steel dynamic



ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009                    12
2008 E - The estimation has been made by Steel Guru assuming the level of crude steel out put
in December 2008 at levels similar to that of November 2008. The share of Asia's crude steel
production in 2007 is estimated to reach 56.9% as against 56.1% in 2006, with major reduction
coming from CIS.

           Region                    2008 E         Share      2007           Share   Change
           Asia                      744.83         56.9%      754.57         56.1%   0.7%
           EU (27)                   201.16         15.4%      210.19         15.6%   -0.3%
           North America             128.59         9.8%       132.83         9.9%    -0.1%
           CIS (6)                   113.1          8.6%       124.01         9.2%    -0.6%
           South America             48.91          3.7%       48.25          3.6%    0.1%
           Other Europe              31.42          2.4%       30.45          2.3%    0.1%
           Africa                    17.12          1.3%       18.76          1.4%    -0.1%
           Middle East               15.96          1.2%       16.45          1.2%    0.0%
           Oceania                   8.79           0.7%       8.75           0.7%    0.0%

Indian heavy industry ministry for removal of import duty on steel
ET reported that the ministry of heavy industry has favored slashing the 5% Customs duty on
steel and steel products to boost capital goods industry, as steel is the primary input for
manufacturing capital goods. The report cited an official in the ministry as saying that “The
ministry is concerned about a slowdown in the capital goods industry. The sector’s output
showed a dismal growth of 3.1% in October 2008 as compared to 20.9% in the same period last
year.” The official said that the ministry of finance had asked the heavy industry ministry to
prepare a proposal to boost the capital goods sector. He said that “We plan to submit it to the
finance ministry in two weeks.” The 5% duty was re imposed in November to protect domestic
steel firms from cheaper imports.
                                                                                - 01 Jan 2009
NEW MEMBERS
We are reproducing below the names and addresses of new units who have joined AIIFA
recently. The Association is grateful to these organizations for their becoming member of
the Association.

(i)    Name and Address                               :       CHAUDHARY INGOTS (P) LTD.
       for Correspondence                                     Opp: M.G. Public School
                                                              Circular Road, MUZAFFARNAGAR (U.P.)
                                                              Tel: 9837032558
                                                              Telefax: 0131-2623423

       Membership No.                                 :       683

       Name of the Chief Executive                    :       Mr. Narendra Singh Pawar
                                                              Managing Director

ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009                    13
           Products made                              :       M.S. Ingots

(ii)       Name and Address                           :       ASHIRVAD ISPAT & ALLOYS PVT. LTD.
           for Correspondence                                 7th K.M., Meerut Road
                                                              Muzaffarnagar (U.P.)
                                                              Tel: 9837085028
                                                              Telefax: 01396-252255
                                                              Email: ashirvad_steels@rediffmail.com

           Membership No.                             :       AF - 65

           Name of the Chief Executive                :       Mr. Roshanlal Gupta
                                                              Director

           Products made                              :       Twisted Bars & TMT Bar

(iii)      Name and Address                           :       PREM CASTINGS PVT. LTD.
           for Correspondence                                 Opp: M.G. Public School
                                                              Circular Road, MUZAFFARNAGAR (U.P.)
                                                              Tel: 9837032558
                                                              Telefax: 0131-2623423

           Membership No.                             :       AF - 66

           Name of the Chief Executive                :       Mr. Narendra Singh Pawar
                                                              Managing Director

           Products made                              :       Twisted Bars & TMT Bar



                                            P A R T - II
National Institute of Secondary Steel Technology (NISST) Services
NISST is a Technical Institute for Secondary Steel Sector, Established by Ministry of Steel,
Government of India. It renders Technical services in the field of R&D, Quality Control,
Product, Testing, Energy Conservation etc. It also imparts training & education for up-
gradation of Technical Manpower skills. The areas of services provided by NISST are:-

Human Resource Development
          Certificate Course on Steel Melting & Rolling Technology. Duration-1.5 years (3 semesters,
           once a week counseling)
          Course for Reheating Furnace Operator/Supervisor-Duration :6 months (Once a week)
          Course on Scrap Segregation Duration: 5 days.
          Course on Mechanical Testing of Engineering Materials & Inspection; Duration; 4 months
           (Once a week)
          Course on metallurgy and Practical metallography - Duration: 4 months.

ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009                  14
        Course on Quality Steelmaking; Duration : 4 months
        Course on Ferrous Heat Treatment; Duration: 4 months.
        Course on Chemical Testing of Iron & Steel, sponge Iron & Ferro alloys Duration : 6 months
        Training on CAD/CAM-40 hours.

Besides, the above courses, NISST also undertakes in-house training programmes on
specific needs of the industry.

Industrial Services
              Energy Conservation studies, Comprehensive Energy Audit/Improvement studies.
              Preparation of Feasibility Reports for secondary steel sector.
              Time and Motion study.
              Project Report preparation. (BFR)
              Quality improvement studies.
              Production Capacity assessment, technical feasibility/ capability studies.
              Technical guidance to various Govt. agencies.
              Designing/ Modification of reheating furnace and pollution control device.
              Product development.

Testing
   Spectro & Metallography analysis of steel
   Mechanical testing of Steel-Tensile, Hardness, Bend-Rebend, Impact, etc.
   Chemical analysis of steel
   Fuel & Air Testing : Oil Testing, Moisture, Calorific value, Viscosity, Stack Monitoring,
      ambient air testing, etc.

Safety Testing

        Testing of Chain Pully, Cranes, Pressure Vessels, (Authorized by Director of Factories,
        Punjab Govt.)
        Transformer Oil dehydration.

Members may kindly avail the services of NISST by directly contacting them.                             The
addresses are given below for information of members.

NISST,                                NISST,                                  NISST,
P.B. No.92,                           MHADA Complex,                          H.No.34,
G.T. Road,                            1st Floor, Opp. RBI                     Bengal Engg.& Sc. Univ.
Mandi Gobindgarh-147 301              Quarters, Amravati Road,                Campus, Shibpur,
Tel: 01765-258080,252558              Nagpur-440 010                          Howrah-711 103 (WB)
Fax: 01765-258079                     Tel:0712-2550685                        Tel: 033-26685303
                                      Fax:0712-2527488


                     SPOT PRICES OF STEEL INGOT ON NCDEX
       Date          Kolkata         Raipur          Mumbai            Mandi         Ghaziabad
                                                                     Gobindgarh
ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009                        15
  16.12.2008         21790            22722           23800              25570   24050
  17.12.2008         21790            22768           24300              25750   24100
  18.12.2008         21970            22920           24400              25380   24160
  19.12.2008         21970            22890           24400              25360   24280
  20.12.2008         21970            22890           24400              25360   22498
  21.12.2008                                         SUNDAY
  22.12.2008         22230            22840           23800              24930   22690
  23.12.2008         22230            22840           24000              24750   22450
  24.12.2008         22230            22361           23800              24340   22410
  25.12.2008                                         HOLIDAY
  26.12.2008         22230            22228           23500              24430   22410
  27.12.2008         22230            22243           23600              24750   23070
  28.12.2008                                         SUNDAY
  29.12.2008         22230            22285           23500              25110   23140
  30.12.2008         22230            22410           23700              24840   23170
  31.12.2008         22230            22375           23600              24840   23480
  01.01.2009         22230            22455           23700              25200   23710
  02.01.2009         22230            22455           23700              25110   23560
  03.01.2009         22230            22690           23700              24890   23840
  04.01.2009                                         SUNDAY
  05.01.2009          N/A             22727           23800              25110   23940
  06.01.2009           “”             22978           23800              25110   23910
  07.01.2009           “”             23114           23900              25390   23930
  08.01.2009           “”             22955           23900              25200   23800
  09.01.2009           “”             22474           23700              25200   23300
  10.01.2009           “”             22523           23700              24840   23160
  11.01.2009                                         SUNDAY
  12.01.2009           “”             22326           23500              24660   23050
  13.01.2009           “”             22326           23400              24440   23260
  14.01.2009           “”             22326           23400              24440   23260
  15.01.2009           “”             22326           23400              24440   23260

CUSTOMS CIRCULAR
NO. 20/2008-CUSTOMS, DT. 02.12.2008 [F. No. 450/67/2003-Cus.IV (Pt)]

To
All Chief Commissioners of Customs/Customs (Prev.)
All Chief Commissioners of Customs & Central Excise.
All Commissioners of Customs/Customs (Prev.)
All Commissioners of Customs & Central Excise.
The Director General of Revenue Intelligence.
The Director General of Central Excise Intelligence.

                    Guidelines for compounding of offences under Customs
                      (Compounding of Offences) Rules, 2005-regarding.

Please refer to notification No. 118/2008-Customs (N.T) dated 12.11.2008 whereby certain
amendments have been carried out in the Customs (Compounding of Offences) Rules,
2005. Further, considering the recommendations made by the Committee on Subordinate

ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009              16
Legislation (Rajya Sabha) and to make a meaningful impact on the Scheme of
Compounding of Offences, the following changes have been made in the scheme of Customs
(Compounding of Offences) Rules, 2005, and the guidelines issued in this regard.

The compounding amount prescribed under rule 5 of the said Rules has been revised
downwards. A new proviso has been inserted in this rule, which provides that if a person
has, in respect of same goods, committed offences falling under more than one category, i.e,
SI.No. 1 to 8 of the table specified in this rule and where amount of duty evasion or
amount of drawback or exemption from duty, or amount of market value of the goods is
same or all such offences, then the compounding amount, in such cases, shall be the
amount determined for the offences for which a higher compounding amount has been
prescribed.

Further, in rule 4, a new provision has been added, whereby it has been provided that an
applicant should pay duty, penalty, and interest before submission of application for
compounding. Correspondingly, the Application Form has also been amended by inserting
SI.No. 12A so as to ensure that the compounding of offences shall not be allowed unless the
aforesaid duty, penalty and interest thereon are paid by the applicant.

In view of the recommendations of the Committee, for early disposal of the applications for
compounding, the Board directs that normally the application for compounding of offences
may be disposal of within a period of 3 months from the date of receipt of such application.
In order to ensure such time bound disposal, it is reiterated that the existing instruction
regarding time limit for launching prosecution should be followed. In straight cases, where
the importer/exporter is caught red handed, prosecution may be launched immediately
after seizure of the goods. In other cases, the process of deciding about launching of
prosecution or otherwise shall be completed within a month of adjudication of the case.
Further, cases of prosecution shall be completed within a month of adjudication of the
case. Further, cases of prosecution shall be pursued seriously with the respective
Government Counsels and the Courts.

The Compounding Authority shall invariably obtain a factual report from the Reporting
Authority within one month of receipt of the application for compounding, except in
deserving cases, where request for extension of the period have been sought for justifiable
reasons (i.e. 1 month). Where an opportunity of personal hearing requires to be given to the
applicant before passing of an order, the same shall be offered within one month’s time of
date of receipt of report from the Reporting Authority (1 month). After taking into account
the contents of the applications and the concerned reports of the Reporting Authority and
submissions (written or oral) made by applicant, the Compounding Authority may be able
to dispose of the case within one month of the date of personal hearing or obtaining a
report whichever is later (1 month). In any case, even if there are certain difficulties in
timely submission of report or conducting timely personal hearings, the Compounding
Authority shall dispose of the application within an overall time limit of 6 months as
provided in para 7 of the guidelines issues in this regard.

Further, it was decided by the Beard that compounding of offences should not be allowed

ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009         17
where there are demonstrable contradictions, inconsistencies or incompleteness in the
case. Accordingly, in the guidelines issues for compounding of offense under Customs and
Central Excise Acts vide Circular No. 54/2005-Cus dated 30.12.2005, the following
additional guidelines shall be added:

Any person who has applied for compounding of offence in a case, where there are apparent
contradictions or inconsistencies or incompleteness.” Adequate publicity may be given
about reduction of compounding amount, in order to make the scheme more popular as to
reduce the cases pending in the Court. Further, in order to make best use of compounding
of offence scheme, all persons against whom prosecution is initiated or contemplated
should be informed separately in writing, the offer of compounding. Guidelines issued vide
Circular No. 54/2005-Cus dated 30.12.2005 shall continue to apply, subject to the
amendments made vide Notification No. 118/2008-Customs (NT) dated 12.11.2008 and the
changes mentioned in para 5 above. The field formations as well as trade and industry
may be suitably informed.
                                                                        Sd/-
                                                                  (M.M. Parthiban)
                                                                 Director (Customs)
CENTRAL EXCISE NOTIFICATION N.T.SERIES
NO.48/2008-CE(N.T) DATED 05.12.2008 [F.No. 354/158/2008-TRU]

‘’In exercise of the powers conferred by section 37 of the central Excise Act, 1944 (1 of
1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby
makes the following rules to amend the CENVAT Credit Rules, 2004, namely:-

1.       (i)    These rules may be called the CENVAT Credit (Second Amendment) Rules,
                2008.
         (i)    They shall come into force on the date of their publication in the Official
                Gazette.

2.       In the CENVAT Credit Rules, 2004, in rule 3, in sub-rule (7), in clause (a), in the
         proviso, for the expression “X multiplied by [1+BCD/400) multiplied by (CVD/100)]”,
         the expression “X multiplied by [1+BCD/200) multiplied by (CVD/100)]” shall be
         substituted.
                                                                Sd/-
                                                           (Unmesh Bagh)
                                                 Under Secretary to the Govt of India.

CUSTOMS CIRCULAR
NO. 22/2008-CUSTOMS DATED 19TH DECEMBER, 2008 [F.No. 401/229/2006-Cus.III]

To
All   Chief Commissioners of Customs/Customs (Prev.)
All   Chief Commissioners of Customs & Central Excise,
All   Commissioners of Customs/Customs (Prev.),
All   Commissioners of Customs & Central Excise.


ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009         18
         Procedure relating to sanction and pre-audit of refund claims-regarding.

I am directed to invite your attention to Board’s Circular No. 24/2007-Cus dated
02.07.2007, relating to the procedure to ensure expeditious disposal of Customs duty
refund applications. Para 4.4 of the Circular provides for the audit system in respect of
refund claims. It has been provided under the said Para that all applications involving a
refund of duty and/or interest of Rs. 5 lakh or more shall be subjected to pre-audit as per
the existing practice. However, it has been brought to the notice of the Board that the said
Para does not clearly state whether the pre audit of application of refund for amount Rs.5
lakh and above should be done at the level of DC/AC or at level of Commissioner.

The matter has been examined. It has been decided that pre-audit of all refund claims will
be conducted by the Assistant/Deputy Commissioner (Audit), in the Commissionerate
Headquarters Office. Thereafter, the Assistant/Deputy Commissioner of Group/Division
will pass an order-in-original in respect of the claim. Thereafter, the orders-in-original
passed in this regard shall be subjected to review by the Commissioner concerned.

The relevant portions of Circular No. 24/2007-Cus dated 02.07.2007 stand amended as
discussed above.

A suitable Public Notice and Standing Order may be issued for the guidance of the trade
and staff. Difficulties faced, if any, in implementation of the Circular may be brought to the
notice of the Board at an early date.
                                                                             Sd/-
                                                                       (M.M.Parthiban)
                                                                      Director (Customs)
CENTRAL EXCISE NOTIFICATION [N.T.SERIES]
NO. 50/2008-CENTRAL EXCISE (N.T.), 31.12.2008 [F.No. 267/52/2008-CX.8]

“In exercise of the powers conferred by section 37 of the Central Excise Act, 1944 ( 1 of
1944) and section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby
makes the following rules to amend the CENVAT Credit Rules, 2004, namely:-

       1. (1) These rules may be called the CENVAT Credit (Third Amendments) Rules,
              2008.
          (2) They shall come into force on the date of their publication in the Official
              Gazette.

       2. In the CENVAT Credit Rules, 2004, in rule (6), in sub-rule (6), for clause (i), the
          following clause shall substituted, namely:-
              a. Cleared to a unit in a special economic zone or to a developer of a special
                 economic zone for their authorized operations; or”.

                                                                            Sd/-
                                                                     (Rahul Nangare)
                                                         Under Secretary to the Government of India

ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009                   19
CUSTOMS NOTIFICATION
NO. 3/2009-CUSTOMS, 02.01.2009 (F.No. 605/208/2005-DBK)

“In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act,
1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public
interest so to do, hereby makes the following further amendment in the notification of the
Government of India in the Ministry of Finance (Department of Revenue), No. 89/2005-
Customs dated the 4th October, 2005, published in the Gazette of India, Extraordinary, Part
II, Section 3, sub-section (i) vide number G.S.R. 624 (E), dated the 4th October, 2005,
namely:-

In the said notification, in the opening paragraph,-

   (i)     for condition (i) the following condition shall be substituted, namely:-
           (i)   that the importer has been issued a Duty Entitlement Passbook scrip by the
                 Licensing Authority in terms of paragraph 4.3 of the Foreign Trade Policy or
                 rule 24 or rule 30 of the Special Economic Zones Rules, 2006.”
           (ii)  In conditions (ii), ((iii), (iv), (vi) and (viii), for the words “Duty Entitlement
                 Pass Book’, wherever they occur, the words “Duty Entitlement Pass Book
                 Scrip” shall be substitutes.
                                                                        Sd/-
                                                                   (S.R. Meena)
                                                 Under Secretary to the Government of India


Issue No. 22 Vol. VI         “Fortnightly”           Date: 01-01-2009 to 15-01-2009     Rs. 10/-




ISSUE NO. 22 VOL. VI INDUCTION FURNACE NEWS LETTER 01-01-2009 to 15-01-2009                20

								
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