EPCG licence-condition breaches remain subject to customs investigation despite export obligation discharge where alleged misdeclaration concerns duty-exempt imports.

Customs authorities may investigate and adjudicate alleged breaches of EPCG licence conditions despite an export obligation discharge certificate where fraud, concealment, misrepresentation or misdeclaration is alleged in relation to duty-exempt imports. The notes distinguish alleged use of unrelated third-party shipping bills and false declarations to obtain export-obligation discharge from misrepresentation in obtaining the licence itself. As no statutory bar to customs proceedings was identified, the show-cause notice remains open to adjudication, with the assessee entitled to present its defence before the adjudicating authority.

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Issues: Whether the Directorate of Revenue Intelligence and customs authorities have jurisdiction to investigate and adjudicate alleged breach of EPCG licence conditions, notwithstanding issuance of an export obligation discharge certificate by the licensing authority.

Analysis: The allegations concerned use of unconnected third-party shipping bills and false declarations for obtaining discharge of export obligation, resulting in alleged loss of customs duty. This was distinct from an allegation of misrepresentation in obtaining the licence. A discharge certificate issued by the licensing authority does not bar customs authorities from investigating breach of conditions attached to a duty-exempt import where fraud, concealment, misrepresentation or misdeclaration is alleged. No statutory bar to the customs proceedings was shown. The challenge to a show-cause notice was therefore not fit for interference in writ jurisdiction, while the petitioners could place their defence before the adjudicating authority.

Conclusion: The customs authorities have jurisdiction to continue proceedings from the show-cause-notice stage concerning the alleged violation of EPCG licence conditions; the issue is against the assessee.

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