Faced with complaints from locals about increased noise, dust and lorry movements emanating from the plant, the council issued enforcement notices in May 2009 alleging the operation had grown so much it amounted to a breach of planning control.
The council also contended that increased recycling of gas bottles on the site created a serious risk of explosions and that changes in the law on driver hours meant that more lorries were arriving and leaving at anti-social hours.
However, the enforcement notices were overturned by a government planning inspector - who rejected arguments from the council that there had been a fundamental change in the "nature and character" of the scrap yard - and that decision was upheld by the High Court in February.
Now the council's case has finally hit the buffers after three judges at the Court of Appeal rejected its plea that the inspector got it wrong.
Lord Justice Pill, sitting with Lords Justice Toulson and Munby, ruled Hertfordshire had left it too late to raise arguments about late-night lorry movements and explosion risks.
The court ruled that the inspector had been entitled to decide that, despite "intensification" of operations on the site, its basic use had not changed and there had been no breach of planning control.