EPCG exemption cannot be denied merely for delayed EODC production where export obligation was otherwise shown as fulfilled.

Delay in issuance of the Export Obligation Discharge Certificate could not, by itself, justify denial of EPCG exemption where the record showed that the importer had sought redemption and later produced prima facie proof that export obligation had been discharged. Departmental instructions required Customs not to duplicate DGFT verification and to keep the matter pending where proof of application before DGFT had been filed. In the absence of fraud or any similar exception, the duty demand based only on non-production of the EODC was unsustainable, and relief was warranted.

---

---

Issues: Whether delay in issuance of the Export Obligation Discharge Certificate could justify denial of EPCG exemption and sustain the duty demand, and whether the matter required remand for verification and consequential relief.

Analysis: The demand had been raised on the footing that proof of export obligation fulfilment had not been produced. The later redemption letter prima facie showed that the export obligation under the EPCG authorisation had been discharged, and the record also showed that the importer had already sought redemption before the customs authorities acted. The delay in obtaining the certificate was attributable to the governmental process and not to any conduct of the importer. The binding departmental instructions and circulars stated that Customs need not duplicate verification already undertaken by DGFT and that, where the authorization holder had submitted proof of application to DGFT, the matter could be kept in abeyance pending DGFT's decision. In the absence of any allegation of fraud or similar exception, denial of the scheme benefit merely because the EODC was not yet produced was not justified.

Conclusion: The duty demand could not be sustained on the ground of non-production of the EODC, and the assessee was entitled to relief.

---