Suppression and extended limitation failed where dual EPCG and SHIS benefits arose from a bona fide error, not deliberate misdeclaration.

Suppression or misdeclaration was not proved where EPCG and SHIS licences had been issued before 05.06.2012, when para 4B of ANF 5A did not yet require an undertaking, and the bar on simultaneous benefit of the two schemes was introduced only later. The applications had been filed before that change, and the public notice relied on by the original authority did not establish deliberate concealment. The record instead indicated a bona fide error in the grant of both benefits, so the foundation for invoking the extended period of limitation was absent. Recovery of customs duty on that basis therefore failed, and the appeal was allowed.

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Issues: Whether the allegation of suppression or misdeclaration in availing Zero Duty EPCG and SHIS benefits was proved, and whether recovery of customs duty by invoking the extended period of limitation was sustainable.

Analysis: The licences were issued before 05.06.2012, when there was no requirement of an undertaking under para 4B of ANF 5A. The restriction against simultaneous benefit of the two schemes was introduced only later, and the appellant had filed the relevant applications before that change. The material on record, including the public notice relied upon by the original authority, did not support a finding of deliberate suppression. On the contrary, the record indicated that erroneous issuance of the two benefits was treated as a bona fide error. In these circumstances, the foundation for invoking the extended period of limitation was absent.

Conclusion: The allegation of suppression was not proved, and recovery of customs duty by invoking the extended period failed. The appeal was therefore allowed in favour of the appellant.

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