EPCG duty benefit must follow the amended policy where the authorization already reflected the reduced rate.

The EPCG scheme was amended by DGFT to reduce the duty rate to 3% from 01.04.2008, and the importer's authorization was issued on that basis. The later issuance of the corresponding customs notification could not be used to deny the revised benefit, because the Ministry of Finance and customs authorities were expected to act in tandem with the already adopted policy change. The Tribunal concluded that the delay in issuing the notification did not defeat the entitlement reflected in the authorization, and reassessment of the Bills of Entry to grant the lower EPCG rate was sustained.

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Issues: Whether reassessment of the Bills of Entry and grant of the lower EPCG duty rate could be directed when the DGFT policy amendment reducing the duty to 3% had been issued earlier but the corresponding customs notification was issued later.

Analysis: The EPCG policy was amended by the DGFT to reduce the duty rate to 3% with effect from 01.04.2008, and the importer was issued the EPCG authorization on that basis. The customs notification implementing the same change was issued only later, and the Tribunal held that the Ministry of Finance and the customs authorities were required to act in tandem with the policy decision already taken by the Government. Once the authorization itself reflected the revised rate, the delay in issuing the customs notification could not be used to deny the benefit to the importer.

Conclusion: The denial of the 3% EPCG duty benefit was not sustainable and the reassessment claim succeeded.

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