EPCG export obligation depends on mandatory export documents, and missing Bill of Export can justify rejection and penalty.

EPCG compliance requires the licence holder to fulfil the export obligation within the stipulated period and to produce the prescribed export documents, including a Bill of Export for supplies to an SEZ unit. The Bill of Export, together with the endorsed Bill of Export and ARE-1, functions as documentary proof that the goods were received in the SEZ and treated as deemed exports. Where these mandatory requirements are not shown to be met, the export obligation cannot be regarded as discharged, and rejection of the claim with consequential penalty is justified.

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Issues: Whether non-filing of the Bill of Export and other prescribed documents meant that the export obligation under the EPCG authorisation was not discharged and the fiscal penalty and rejection orders were valid.

Analysis: The EPCG conditions required the license holder to fulfil the export obligation within the stipulated period, submit statements of export, and ensure that the licence details were reflected in the shipping bills or Bills of Export. The Handbook of Procedures and Rule 30 of the Special Economic Zone Rules, 2006 required a Bill of Export for supplies to an SEZ unit, and the endorsed Bill of Export and ARE-1 constituted proof of export. The materials placed by the petitioner did not show compliance with these mandatory requirements. Filing of the Bill of Export was not a mere formality, because it served as the documentary safeguard for establishing that the goods had in fact been received in the SEZ and accounted as deemed exports.

Conclusion: The export obligation was not shown to have been duly discharged, and the rejection of the claim as well as the consequential penalty were upheld.

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