Legal principle

The omission of Rule 96(10) of the CGST Rules by Notification No. 20/2024 dated 8.10.2024 operates prospectively and also applies to all pending proceedings/cases in which final adjudication has not taken place, entitling exporters to maintain refund claims of IGST paid on exports.

Court decision

The court held that Notification No. 20/2024 dated 8th October 2024, whereby Rule 96(10) of the CGST Rules was omitted, is applicable prospectively and also applies to pending proceedings/cases where final adjudication has not taken place. The impugned show cause notices and orders-in-original were quashed and set aside, and the petitioners were held entitled to maintain refund claims for IGST paid on export of goods as per Rule 96 of the CGST Rules, 2017, in accordance with law. The question of the vires of Rule 96(10) was not decided, being 'not required to be considered at this stage'. The petitions succeeded; civil applications were disposed of; rule was made absolute to the aforesaid extent with no order as to costs.

Facts

A group of writ petitions was heard analogously, with facts drawn from Special Civil Application No. 2187 of 2023, whose petitioner is engaged in the manufacture, supply and export of conductors and Optical Fiber Ground Wires (OPGW). Before the GST regime (effective 01.07.2017), its inputs and capital goods attracted central excise duty and its input services attracted service tax, and it availed Cenvat Credit under the Cenvat Credit Rules, 2004. The department invoked Rule 96(10) of the CGST Rules, 2017 (as substituted w.e.f. 9.10.2018, and earlier substituted with retrospective effect from 23.10.2017) to reject the petitioners' refund claims of IGST paid on exports, through show cause notices and orders-in-original. The petitioners challenged the vires of Rule 96(10) as well as the notices and orders passed under it.

Key provisions

• Section 3(7), Customs Tariff Act, 1975 — Levy of additional duty equal to excise duty, sales tax, local taxes and other charges
• Section 159A, Customs Act, 1962 — Effect of amendments etc of rules regulations, notifications or orders