EPCG installation condition dispute: customs demand and confiscation failed where the breach of declared premises was not established.

Customs duty demand, confiscation, redemption fine, penalty and denial of EPCG benefit were held unsustainable where the alleged breach was non-installation of imported capital goods at the licence address. The appellant produced a rent agreement and explained that the original premises became unavailable, requiring installation at a nearby location. The Revenue relied on an alleged landlord version, but no statement was recorded and the landlord was not confronted with the rent agreement. As the appellant had sought amendment of the address before final action and the goods were not shown to have been sold, transferred or diverted, the breach was not established and the impugned order was set aside.

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Issues: Whether the demand of customs duty, confiscation, redemption fine, penalty and denial of the EPCG benefit were sustainable on the allegation that the imported capital goods were not installed at the address declared in the licence.

Analysis: The appellant produced a rent agreement and explained that, after the licence application was made, the landlord did not permit use of the initially declared premises, requiring installation at another nearby premises. The Revenue disbelieved the explanation on the basis of the landlord's alleged version, but no statement of the landlord was recorded and the landlord was not confronted with the rent agreement. The EPCG conditions and the corresponding notification required installation at the declared premises and production of an installation certificate within six months, but the record showed that the appellant had sought amendment of the address before final action was taken and the goods were not shown to have been sold, transferred, or otherwise diverted.

Conclusion: The allegation of breach was not established, the duty demand and confiscatory proceedings were unsustainable, and the impugned order was set aside.

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