Pending EPCG waiver review can justify keeping customs recovery in abeyance and extending installation time.

Where EPCG compliance is under review before the competent DGFT/EPCG Committee, coercive recovery of differential customs duty may be kept in abeyance because a favourable waiver or relaxation decision can remove the basis for recovery under the Customs Act. The text also notes that, in light of pending review proceedings and prior extensions, time for installation of the imported capital goods may be extended for a limited period, with that relief made subject to the outcome of the review. The customs authorities' ability to take fresh action is preserved after the competent authority's decision.

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Issues: (i) Whether the detention notices issued for recovery of differential customs duty could be sustained when the petitioner's request for waiver of EPCG conditions was pending before the DGFT/EPCG Committee; (ii) whether further time should be granted for installation of the imported capital goods.

Issue (i): Whether the detention notices issued for recovery of differential customs duty could be sustained when the petitioner's request for waiver of EPCG conditions was pending before the DGFT/EPCG Committee.

Analysis: The detention notices were founded on the petitioner's failure to complete installation of the imported machinery within the EPCG time limit and the resulting liability to pay the duty forgone. At the same time, the petitioner's request for review and waiver of procedural conditions under the EPCG regime was stated to be pending before the competent EPCG Committee. A favourable decision in that proceeding could remove the basis for recovery under the Customs Act.

Conclusion: The detention notices could not be sustained at that stage and were quashed, without prejudice to the Customs authorities taking fresh action after the DGFT/EPCG Committee's decision, if necessary.

Issue (ii): Whether further time should be granted for installation of the imported capital goods.

Analysis: In view of the pending review before the competent authority and the earlier extensions already granted, the Court found it to extend the time for completion of installation in the Copperas Recovery Plant for a limited period, while making the extension subject to the outcome of the review proceedings.

Conclusion: Time for installation was extended up to 31.03.2020.

Final Conclusion: The petitioner obtained interim protection against recovery proceedings, conditional relief on installation time, and quashing of the impugned detention notices, while the Customs authorities' future rights were preserved pending the competent authority's decision.

Ratio Decidendi: Where the legality of EPCG-related recovery depends on a pending competent-authority review of waiver or procedural relaxation, coercive recovery notices may be quashed or held in abeyance until that decision is rendered.

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