Customs exemption under EPCG upheld where records supported tourism use and no unwritten logbook restriction was read in.

Customs exemption under Notification No. 64/2008-Cus was stated to remain available for imported vehicles under the EPCG scheme where the notification did not prescribe a specific logbook format or require exclusive use in one rigid manner. The text notes that records showing tourism registration and foreign exchange earnings supported the permitted use, while the Revenue failed to prove by cogent evidence that the vehicles were diverted from the authorised purpose or that the exemption conditions were breached. Occasional use by Directors in exigent circumstances was treated as insufficient, by itself, to defeat the exemption, and the notification was not read to impose restrictions not found in its wording.

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Issues: Whether the appellant was entitled to the customs exemption under Notification No. 64/2008-Cus for imported vehicles under the EPCG scheme despite allegations that the vehicles were used by the Directors, no logbook was maintained in the prescribed manner, and the vehicles were not used exclusively for foreign tourists.

Analysis: The Tribunal found that the notification and the EPCG conditions did not prescribe any specific form of logbook or require that the vehicles be used only in one rigid manner. The appellant had produced records showing registration for tourism use and had earned foreign exchange from hotel activity. The Revenue did not establish, with cogent evidence, that the vehicles were not used for the permitted purpose or that foreign exchange earnings were absent. It was also held that occasional use by Directors in exigent circumstances did not by itself amount to a violation of the exemption conditions. Following the Delhi High Court decision in Hotel Excelsior, the Tribunal applied judicial discipline and held that the notification could not be read to impose a restriction not expressed in its text.

Conclusion: The denial of the exemption was not sustainable and the appellant was entitled to the benefit of the notification.

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