EPCG installation period extension accepted where delay was bona fide and supported by project-related circumstances.

An EPCG exemption notification requiring installation of imported capital goods within six months also allowed the customs authority to extend that period, and where no outer limit was fixed, extension depended on a factual assessment of bona fide delay. The assessee, a government undertaking carrying out a large pollution-control project and reliant on government funding, showed a genuine reason for delay and gave assurance that the remaining machinery would be installed by a specified date. The extension request was accepted, subject to quarterly reporting and the possibility of further extension if needed.

---

---

Issues: Whether the time for installation of imported capital goods under the EPCG notification could be extended on the facts shown, and whether the assessee had made out a bona fide case for such extension.

Analysis: The notification prescribed installation within six months but also conferred power on the customs authorities to extend that period. Since the notification did not fix any outer limit for extension, the question was whether the delay was genuine and justified on the facts of the case. The assessee was a Government undertaking implementing a large pollution-control project and depended on governmental funding, which explained the delay in installation. The assurance that the remaining machinery would be installed by a specified date supported the request for extension.

Conclusion: The request for extension was held to be bona fide and was accepted, with directions for quarterly reporting and liberty to seek further extension if required.

Final Conclusion: The assessee succeeded in obtaining extension of time for installation of the imported capital goods, subject to monitoring by the customs authorities.

Ratio Decidendi: Where an exemption notification permits extension of the installation period without prescribing a maximum extension, the authority may grant further time on a factual assessment of bona fide delay and surrounding circumstances.

---