Holoflex Ltd & Anr Vs Union of India & Ors (Delhi High Court)
Delhi High Court held that it would be unreasonable to deny Export Promotion Capital Goods [EPCG] benefit merely because of non-submission of Bills of Export [BOE] as proof of discharge of export obligation since there was collateral evidence of discharge of export obligation.
Facts- On 27 January 2005, Holoflex was issued a license under the EPCG Scheme which permitted Holoflex to import, duty free, capital goods valued at ₹ 2,17,317.25 against corresponding export obligation of ₹ 17,38,538. The export obligation was required to be discharged on or before 27 January 2013.
Using the EPCG license issued to it, Holoflex imported capital goods, saving customs duty of ₹ 2,11,237, vide Bill of Entry dated 5 February 2005. The corresponding export obligation which it was required to fulfil was ₹ 16,89,896.
On 13 December 2007, Holoflex entered into a Product Purchase Agreement with Nokia India Pvt Ltd, a unit situated in the Nokia Telecom Special Economic Zone, Tamil Nadu, for sale of ICA Holograms manufactured using the imported capital goods. It is not in dispute that, pursuant to the Product Purchase Agreement, holograms were in fact sold by Holoflex to Nokia, of a value greater than the export obligation which Holoflex was required to discharge under the EPCG license, and that payment, thereagainst, was received by Holoflex, as required by the EPCG license. By way of proof of fulfilment of export obligation, Holoflex filed, with the authorities in the office of the Director General of Foreign Trade, the invoices under which the holograms were sold to Nokia, as well as Bank Realisation Certificates evidencing receipt of payment, against the supplies, from Nokia.
