Exemption under SHIS and Zero Duty EPCG scheme turns on simultaneous availment for the relevant period, not same-year issuance.

An exemption under Notification No. 102/2009-Customs was interpreted in light of the Foreign Trade Policy, the Handbook of Procedures, an amendment and a DGFT clarificatory public notice. The decisive question was whether SHIS and Zero Duty EPCG benefits were simultaneously availed for the same relevant period; mere issuance of both instruments in the same physical year was not enough. On the stated facts, SHIS related to exports of 2009-10, while the Zero Duty EPCG authorisation was issued for 2011-12, so no overlap arose and the notification condition was not breached. The exemption therefore remained available.

---

---

Issues: Whether the respondent was entitled to exemption under Notification No. 102/2009-Customs dated 11.09.2009 as amended, or whether issuance of SHIS scrips and Zero Duty EPCG authorisation in the same physical year amounted to a breach of the notification condition.

Analysis: The condition in the exemption notification had to be read along with the Foreign Trade Policy, the Handbook of Procedures, the subsequent amendment, and the clarificatory public notice issued by the DGFT. The decisive factor was not the physical year of issue of the scrip or authorisation, but whether there was simultaneous availment of the two benefits for the same relevant period. On the facts, the SHIS benefit related to exports of 2009-10, while the Zero Duty EPCG authorisation was issued for 2011-12. The respondent had not availed EPCG in the relevant SHIS year for 2009-10, and the clarificatory materials showed no contravention of the scheme.

Conclusion: No violation of the notification condition was made out, and the exemption was available to the respondent.

Final Conclusion: The department's appeal failed because the notification condition was not breached on a proper purposive reading of the export incentive scheme.

Ratio Decidendi: An exemption condition governing SHIS and Zero Duty EPCG benefits must be construed in the context of the Foreign Trade Policy and procedural clarifications, and breach arises only upon simultaneous availment for the relevant year, not merely from physical issuance in the same calendar year.

---