EPCG licence validity for goods already shipped overrides departmental instructions, preserving concessional customs duty.

An EPCG licence issued after shipment but before clearance can still cover the imported goods where it expressly validates goods already shipped or arrived, provided customs duty has not been paid and the goods have not been cleared; the operative date is the shipment date, so concessional duty under the applicable notification remains available. Internal departmental instructions or communications cannot override the licence validity determined under the EXIM Policy and Handbook of Procedures, and a quasi-judicial authority is not bound by a communication that does not state the correct legal position.

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Issues: (i) Whether an EPCG licence issued after shipment but before clearance of the imported goods could validly cover goods already shipped, so as to entitle the importer to concessional duty under the relevant notification; (ii) whether inter-departmental instructions/communications could override the licence validity determined under the EXIM Policy and Handbook of Procedures.

Issue (i): Whether an EPCG licence issued after shipment but before clearance of the imported goods could validly cover goods already shipped, so as to entitle the importer to concessional duty under the relevant notification.

Analysis: The licence carried an express endorsement that it would remain valid for goods already shipped or arrived, provided customs duty had not been paid and the goods had not been cleared. The date relevant for the licence's operation was therefore the date of shipment, not merely the date on which the licence was issued. Since the goods were cleared when Notification No. 49/2000-Cus. was in force, the concessional rate applied.

Conclusion: The EPCG licence validly covered the goods, and concessional duty was available.

Issue (ii): Whether inter-departmental instructions/communications could override the licence validity determined under the EXIM Policy and Handbook of Procedures.

Analysis: The relevant policy framework treated the DGFT as the authority with the final word on licence validity. A quasi-judicial authority was not bound by an internal departmental communication if it did not state the correct legal position. The communication relied on by Revenue could not displace the policy-based endorsement attached to the licence.

Conclusion: The departmental communication did not control the outcome, and the customs demand was unsustainable.

Final Conclusion: The appeal failed on both the licence-validity question and the attempted reliance on departmental instructions, so the assessee retained the benefit of concessional duty.

Ratio Decidendi: Where a licence issued under the EXIM policy expressly validates goods already shipped but not yet cleared, customs must give effect to that endorsement, and internal administrative instructions cannot override the legally operative licence terms or the policy framework.

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