Customs Department Bound By DGFT's Classification Of Capital Goods Under EPCG Scheme: Madras High Court

The Madras High Court has ruled that the Customs Department is bound by the DGFT's (Directorate General of Foreign Trade) classification of capital goods under the Export Promotion Capital Goods (EPCG) Scheme. This decision reinforces the principle of inter-departmental consistency and the binding nature of DGFT's classification for schemes it administers. The EPCG scheme allows duty-free import of capital goods for export production. The court's ruling ensures that once DGFT classifies an item as capital goods for this scheme, Customs cannot unilaterally reclassify it, preventing disputes and facilitating smooth implementation of export promotion incentives.