EPCG export obligation under customs exemption failed where exports were completed after the prescribed licence period.

Capital goods imported duty-free under the EPCG Scheme remained subject to fulfilment of the export obligation within five years from the licence date. Although the DGFT amendment substituting detergent products was treated as relating back to the original licence, the importer did not complete the staged export obligation within the prescribed period. Exports began only after the amendment and were completed beyond the original five-year term, so the exemption condition was not satisfied. The customs exemption was therefore not admissible, and the duty demand was sustained.

---

---

Issues: Whether the importer satisfied the export obligation under the EPCG licence so as to retain the customs exemption on capital goods, where the DGFT amended the licence to substitute the export product after the original licence date.

Analysis: The capital goods were imported duty-free under the EPCG Scheme subject to fulfilment of export obligation within five years from the date of the licence. The licence originally required export of pickles, and the amendment substituting detergent products was made later. The amendment was treated as relating back to the original date of the licence, but the appellant had not fulfilled the staged export obligation during the prescribed five-year period. Since exports commenced only after the amendment and were completed beyond the original five-year period, the condition attached to the exemption was not satisfied.

Conclusion: The export obligation was not duly fulfilled and the customs exemption was not admissible; the demand of duty was sustained.

---