EPCG exemption for catalysts survives notification change when policy and licence expressly permit the imported item.

Catalysts imported for an existing plant under the EPCG scheme remained eligible for customs exemption despite an amendment omitting consumables from the notification, because the Foreign Trade Policy and the EPCG licence treated catalysts as a distinct permissible item and the notification had to be read harmoniously with that policy. The demand was also held time-barred because the goods were declared as catalysts at import, the record did not show suppression with intent to evade duty, and the extended limitation period could not be invoked. The impugned order was set aside and consequential relief followed.

---

---

Issues: (i) Whether catalysts imported for an existing plant under the EPCG scheme remained eligible for exemption under Notification No. 97/2004-Cus. after the amendment omitting consumables from the exemption entry. (ii) Whether the demand was barred by limitation and the extended period could be invoked on the basis of suppression.

Issue (i): Whether catalysts imported for an existing plant under the EPCG scheme remained eligible for exemption under Notification No. 97/2004-Cus. after the amendment omitting consumables from the exemption entry.

Analysis: The exemption notification and the Foreign Trade Policy were required to be read harmoniously. The policy treated catalysts separately from consumables and specifically permitted their import for existing plant and machinery under the EPCG scheme. The licence issued to the importer also specifically covered catalyst for the relevant plant. Since the policy continued to recognize catalysts as permissible spares distinct from consumables, omission of the word consumables from the notification did not take catalysts out of the exemption. The customs exemption could not be construed so as to curtail the import permitted by the policy and licence.

Conclusion: The appellant was entitled to the exemption for the imported catalysts.

Issue (ii): Whether the demand was barred by limitation and the extended period could be invoked on the basis of suppression.

Analysis: The goods were declared as catalysts at the time of import and cleared on endorsement under the EPCG licence. The record did not support suppression of facts with intent to evade duty. In the circumstances, the ingredients required for invoking the extended period were absent, and the demand could not be sustained as time-barred.

Conclusion: The extended period of limitation was not invocable and the demand was barred by limitation.

Final Conclusion: The impugned order was set aside, and the appeal was allowed with consequential relief.

Ratio Decidendi: Where the import policy and the EPCG licence specifically permit a product as a distinct eligible item, the customs exemption notification must be construed harmoniously with that policy, and omission of a different category from the notification does not exclude the permitted item; absence of suppression also defeats invocation of the extended period.

---