EPCG exemption for second-hand textile machinery upheld where no vintage restriction was shown and export obligation was fulfilled.

Second-hand textile machinery imported under the EPCG Scheme qualified for the benefit of Notification No. 97/2004-Cus. because the notification did not impose any restriction based on the year of manufacture, and the record did not establish that the machinery was beyond the permissible vintage. The export obligation under the EPCG authorisation had been fulfilled and the licence was redeemed by the DGFT, so the basis for the duty demand failed. As the exemption benefit applied, the consequential confiscation and penalty could not be sustained and were set aside.

---

---

Issues: Whether the appellants were entitled to the benefit of Notification No. 97/2004-Cus. for import of second-hand textile machinery under the EPCG Scheme, and whether the duty demand, confiscation and penalty could be sustained.

Analysis: The imported machinery was cleared under the EPCG authorisation issued by the DGFT, and the notification did not prescribe any restriction based on the year of manufacture of the second-hand machinery. The record also did not contain concrete evidence to establish that the machinery was beyond the permissible vintage. The export obligation under the EPCG scheme stood fulfilled and the licence was redeemed by the DGFT. In these circumstances, the foundation for the confirmed duty demand failed, and the consequential confiscation and penalty could not survive.

Conclusion: The appellants were entitled to the exemption benefit, and the demand, confiscation and penalty were set aside in favour of the appellants.

---