Extended export-obligation period under EPCG scheme made earlier demand unsustainable and required fresh adjudication.

Extension of the export-obligation period under the EPCG scheme by the competent foreign trade authority altered the basis on which the earlier stay and demand had been made. Once the licence period was extended and the appellant undertook to meet the export obligation within that revised period, the pre-deposit/stay order and consequential recovery could not continue on the earlier default basis. The matter was remanded for de novo consideration by the original authority, with further proceedings to follow only if the extended obligation was not fulfilled.

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Issues: Whether the pre-deposit/stay order and the consequential demand could be sustained after the competent foreign trade authority extended the time for fulfilment of the export obligation under the EPCG scheme.

Analysis: The extension granted by the Directorate General of Foreign Trade to complete the export obligation changed the factual and legal position on which the earlier stay order had proceeded. In view of the extended licence period and the undertaking given by the appellant to fulfil the export obligation within that period, the earlier order was no longer sustainable. The matter therefore required fresh examination by the original authority, with proceedings to be taken only if the extended obligation was not fulfilled.

Conclusion: The earlier order was set aside and the matter was remanded for de novo consideration; the appellant succeeded to that extent.

Final Conclusion: The dispute was reopened for fresh adjudication in light of the extended time granted for compliance with the export obligation, and coercive recovery based on the earlier order did not stand.

Ratio Decidendi: Where the competent authority extends the time for compliance with an export obligation, an order founded on failure to comply within the earlier period may cease to be sustainable and the matter may require fresh adjudication on the revised compliance period.

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