Surrender of one export incentive after regularisation defeated denial of the remaining benefit for alleged dual availment.

Simultaneous availment of SHIS and zero-duty EPCG benefits was treated as curable where the exporter surrendered the EPCG benefit, deposited the duty and interest, and obtained regularisation under the relevant DGFT clarification and CBEC circular. On that basis, the exporter could not be regarded as having retained dual benefits, and denial of SHIS on the footing of impermissible simultaneous availment was unsustainable. Applying the scheme conditions purposively and following an earlier identical view, the demand of customs duty and interest was set aside and relief followed in favour of the assessee.

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Issues: Whether the demand denying SHIS benefit and confirming customs duty and interest was sustainable after the exporter had earlier availed zero duty EPCG benefit but later surrendered that benefit and obtained regularisation under the DGFT clarification and CBEC circular.

Analysis: The dispute concerned simultaneous availment of SHIS and zero duty EPCG benefits under the Foreign Trade Policy 2009-14. The relevant DGFT public notice clarified that exporters who had been issued or had availed both benefits could choose one scheme and surrender the other, and the CBEC circular extended the same option. The appellant had surrendered the zero duty EPCG benefit by depositing the duty and interest, and the DGFT had issued regularisation letters thereafter. In these circumstances, the later surrender and regularisation meant that the appellant could not be treated as having retained both benefits. The reasoning was supported by the earlier decision on an identical issue, which applied the policy, public notice, and purposive interpretation of the scheme conditions.

Conclusion: The demand and interest confirmed by denying SHIS benefit were not sustainable and were set aside in favour of the assessee.

Final Conclusion: The appeal succeeded and the impugned order was annulled, with consequential relief as permissible in law.

Ratio Decidendi: Where the competent foreign trade authority permits an exporter to choose between simultaneous scheme benefits and the exporter surrenders one benefit with accompanying regularisation, denial of the remaining benefit on the basis of dual availment is not sustainable.

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