EPCG debonding clearances were held assessable at the amended 5% ad valorem rate, not zero duty, after notification change.

Debonding clearances made after amendment of the EPCG-related customs notification were assessed at the rate in force on the date of clearance, because the amended notification immediately substituted a 5% ad valorem duty for the earlier zero-duty entry and contained no saving for pre-existing licences. The earlier EPCG licence did not preserve zero-duty treatment once the notification changed. Accordingly, the operative rate for assessment was 5% ad valorem, and the assessee's claim to nil duty failed.

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Issues: Whether debonding clearances made after the amendment to the EPCG-related customs notification were assessable at zero per cent duty on the basis of an earlier licence, or at the amended rate of 5% ad valorem.

Analysis: The amending notification came into force on the date of its issue and substituted a 5% ad valorem duty for the earlier entries of 10% and zero duty. In the absence of any saving or exception for licences already issued and subsisting, the applicable rate for assessment was the rate prevailing on the date of clearance. The duty payable was therefore governed by the amended notification, and not by the terms of the earlier EPCG licence.

Conclusion: The clearances were liable to be assessed at 5% ad valorem, not at zero duty, and the assessee's contention failed.

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