EPCG export obligation extension made the demand premature, leading to setting aside of the confirmation order.

EPCG licence compliance and Notification No. 29/97-Cus. demand cannot be confirmed before the export obligation period, if extended by the DGFT, has expired. The appellants had sought deferment pending consideration of their request for extension, and the JDGFT later extended the export obligation period up to 02-08-2007 under the Handbook of Procedures 2004-2009. Because the adjudication order confirmed demand before that extended period ended, the demand was premature and could not be sustained. The impugned order was therefore set aside.

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Issues: Whether the demand confirmed for alleged violation of the EPCG licence conditions and Notification No. 29/97-Cus. was sustainable when the export obligation period had been extended by the DGFT after the adjudication order.

Analysis: The appellants had sought deferment of the matter pending consideration of their request for extension of the export obligation period. The extension was subsequently granted by the JDGFT, extending the export obligation up to 02-08-2007 in terms of para 5.11 of the Handbook of Procedures 2004-2009. In these circumstances, the confirmation of demand, made before the extended period expired, could not be sustained.

Conclusion: The demand was premature and the impugned order was set aside.

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