excise

We are manufacturers of industrial UPS & DC power system.
There are many customers who intend to buy our product utilizing their EPCG License.
There is a difference of opinion on how to execute the transaction. We have been suggested differently by customer & excise.
I seek your valuable advice on what is the correct way as per laid procedures.
Method:1> Suggested by Customer
Customer will provide invalidation letter of EPCG to us and we will bill only @ 5.15% duty (concessional duty) instead of 16.48% (Full excise duty)
Method:2> Suggested by Excise Department
Customer will provide invalidation letter of EPCG to us and we will bill @ 16.48% duty (Full excise duty), later customer will apply to DGFT for claiming Excise duty refund (duty drawback)
Please also conform what is the present rate of duty against invalidation letter of EPCG.
Looking curiously for your reply.