EPCG eligibility cannot be denied by customs after final relief from foreign trade authorities on the same import issue.

Customs authorities could not deny EPCG benefit or confirm duty and interest on an alleged breach of the actual user condition where the DGFT and appellate foreign trade authority had already examined the same import eligibility issue and granted relief to the importer. The Court held that, once the competent licensing authority has finally decided the matter in favour of the assessee, customs cannot take a contrary view on the same question of eligibility for imported capital goods used in mining operations for a government corporation. The Revenue's authorities were distinguished on facts because they did not involve a final adjudication by the licensing authority in favour of the importer. The demand and alleged violation of EPCG conditions were therefore unsustainable.

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Issues: Whether the customs authorities could deny EPCG benefit and confirm duty and interest on the ground of alleged violation of the actual user condition and alleged misuse of imported capital goods, despite the DGFT authorities having examined the matter and the appellate foreign trade authority having granted relief to the assessee.

Analysis: The dispute concerned import of movable capital goods under the EPCG Scheme for use in mining operations undertaken for a government corporation. The assessee had declared the mining sites as the place of installation, and the licensing authorities had already initiated proceedings on the DRI complaint, considered the matter, and granted relief in appeal. The Court accepted the earlier view that once the foreign trade authority has examined the issue and rendered a decision in favour of the assessee, the customs authorities cannot take a contrary view on the same eligibility question. The authorities cited by the Revenue were distinguished on facts, as they did not involve a final adjudication by the licensing authority in favour of the importer.

Conclusion: The customs demand and the finding of violation of the EPCG conditions could not be sustained. The issue was answered in favour of the assessee and against the Revenue.

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