EPCG export obligation cannot be assessed before licence expiry, and all exports under the licence must be counted.

Under an EPCG licence, demand for alleged non-fulfilment of export obligation cannot be confirmed while the extended licence period is still subsisting, because compliance has not yet become final for adjudication and the demand is premature. Exports made through another concern under the licence, supported by shipping bills and bank realisation certificates, must also be counted when assessing whether the export obligation has been met. The adjudication was set aside and the matter remanded for fresh consideration after expiry of the licence period, with directions to assess the full export record.

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Issues: (i) Whether demand for non-fulfilment of export obligation under the EPCG licence could be confirmed before the expiry of the extended licence period; (ii) whether exports made through another concern under the licence were required to be taken into account while computing compliance with export obligation.

Issue (i): Whether demand for non-fulfilment of export obligation under the EPCG licence could be confirmed before the expiry of the extended licence period.

Analysis: The licence period had been extended and was subsisting on the date of adjudication. In such a situation, the obligation under the notification could not be finally tested or adjudicated before the expiry of the licence period. The demand was therefore premature, and the matter required reconsideration only after the relevant period came to an end.

Conclusion: The demand could not be confirmed before expiry of the licence period and the adjudication was unsustainable.

Issue (ii): Whether exports made through another concern under the licence were required to be taken into account while computing compliance with export obligation.

Analysis: The appellants produced shipping bills and bank realisation certificates to show exports against the licence, including exports routed through the other concern. Those exports were relevant for computing the export obligation under the licence and notification and could not be ignored in the fresh assessment. The matter was therefore required to be re-examined on the basis of the full export record.

Conclusion: The exports made through the other concern had to be taken into account while computing export obligation.

Final Conclusion: The adjudication was set aside and the matter was sent back for fresh consideration after expiry of the licence period with directions to consider the exports claimed under the licence.

Ratio Decidendi: Where the export obligation period under an EPCG licence is still subsisting, confirmation of demand for alleged default is premature, and all exports made under the licence must be considered in determining compliance.

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