2026-VIL-1181-GUJ-CU
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CUSTOMS High Court Cases

Customs - Exemption under EPCG Notification on exit from EOU scheme - Non-registration of authorisation at port of import, non-production for debit and non-filing of undertaking as procedural lapses – Respondent-EOU was permitted to exit from the EOU scheme after payment of duty on closing stock and after obtaining an EPCG authorisation. It cleared capital goods without payment of duty on the strength of that authorisation, and the final exit order and no dues certificate were issued by the Development Commissioner and the department – Appellant-Revenue denied the exemption on the grounds that the authorisation was not registered at the port of import, was not produced for debit and that the undertaking was not furnished in the prescribed form. The Tribunal allowed the Respondent's appeal - Whether non-compliance with the conditions of the exemption Notification, namely registration of the authorisation at the port of import, production for debit and execution of undertaking, is a procedural lapse that cannot defeat the benefit of exemption - HELD - The condition of registration at the port of import applies where exemption is normally claimed under the EPCG scheme at the time of import - Where the Respondent had already sought exit from the EOU scheme and moved to the EPCG scheme after submitting all details, such condition is merely procedural, and its breach cannot be a ground to deny the benefit. The authorisation was submitted to the Department while exiting the EOU scheme, so it was available for debit of the capital goods and the department could have called for it. The undertaking required under the Notification is meant for regular imports, and the Respondent had already furnished an undertaking to discharge duty on any shortfall at the time of debonding, which was sufficient - The findings of fact recorded by the Tribunal show that the conditions were fulfilled and the export obligation was not in dispute - No substantial question of law arises from the order of the Tribunal and the appeal of the Revenue is dismissed
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