IGST Refund Denied u/r 96(10) without Considering Additional Evidence: SC Dismisses Revenue's SLP against Maxwell Engineering
The Gujarat HC held that since the petitioner was never asked to furnish the EPCG Certificate before the Adjudicating Authority and had later produced it along with the Bank Guarantee to prove import of capital goods, there was no violation of Rule 96(10).
The Supreme Court of India, dismissed the Special Leave Petition (SLP ) filed by the department against the Gujarat High Court’s order in the case concerning Integrated Goods and Services Tax (IGST) refund denial for availing EPCG benefit under Rule 96(10) of the Central Goods and Services Tax (CGST) Rules,2017. The Revenue-appellant had challenged the Gujarat High Court’s...
The Supreme Court of India, dismissed the Special Leave Petition (SLP ) filed by the department against the Gujarat High Court’s order in the case concerning Integrated Goods and Services Tax (IGST) refund denial for availing EPCG benefit under Rule 96(10) of the Central Goods and Services Tax (CGST) Rules,2017.
The Revenue-appellant had challenged the Gujarat High Court’s judgment dated July 4, 2025, relating to Maxwell Engineering Solutions Private Limited, respondent-assessee.
The facts of the case are that the assessee was engaged in supplying engineering parts for plastic processing machinery used in the manufacture of rubber and plastic products, with its principal place of business at Vadodara.
In November 2023, the assessee exported goods to the USA, Germany, and Israel, after paying IGST amounting to ₹2,33,466. Since the exports were zero-rated supplies, the petitioner filed a refund claim under Rule 96 of the CGST Rules.
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A notice in Form GST RFD-08 dated 14th February 2024 was issued, asking the petitioner to furnish details of GST invoices and bills of entry based on which ITC was availed and utilized for payment of IGST. The department suspected that the petitioner had availed the benefit of Notification No. 79/2017-Customs dated 13th October 2017.
The petitioner replied on 17th February 2024 through Form GST RFD-09, denying any violation of Rule 96(10) of the CGST Rules and submitting all relevant documents, including invoices, bills of entry, and packing lists.
Despite this, the refund claim was rejected on 26th February 2024 on the ground that the petitioner had availed the benefit under Notification No. 79/2017-Customs, which resulted in a breach of Rule 96(10).
The petitioner then filed an appeal under Section 107 of the CGST Act, 2017. However, the Appellate Authority, by order dated 29th January 2025, dismissed the appeal, invoking Rule 112 of the CGST Rules, and refused to admit additional documents such as the EPCG Script and Bank Guarantee since they were not produced before the Adjudicating Authority.
The assessee counsel,argued that the assessee had not violated Rule 96(10) of the CGST Rules and was eligible for a refund. He stated that the goods imported under the EPCG Scheme through Notification No. 79/2017-Customs were capital goods, which were excluded from the scope of Rule 96(10).
He mentioned that the petitioner had submitted the EPCG Script and Bank Guarantee to prove this, but the Commissioner (Appeals) rejected them by applying Rule 112 of the CGST Rules. He argued that Rule 112 did not apply, as the petitioner was never asked to produce the EPCG Certificate earlier, and therefore the additional documents should have been accepted. He requested that the order be quashed and the matter be sent back for reconsideration.
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On the other hand, the department counsel stated that the petitioner had not produced the EPCG Certificate before the Adjudicating Authority and that the refund was rightly denied. He argued that the Appellate Authority had correctly applied Rule 112 and properly rejected the additional evidence.
Justice Bhargav D.Karia and Justice Pranav Trivedi heard both sides and noted that the petitioner had submitted a reply to the show-cause notice in Form GST RFD-08, along with ITC details for November 2023 and export invoices. It observed that the notice dated 14th February 2024 did not require submission of the EPCG Certificate.
Since the petitioner submitted the EPCG Certificate during the appellate stage, the Court held that none of the Clauses (a) to (d) of Rule 112 of the CGST Rules applied.
The Gujarat High Court found that the petitioner was never asked to produce the EPCG Certificate before the Adjudicating Authority and had submitted it later along with the Bank Guarantee to show that capital goods were imported under Notification No. 79/2017-Customs. It held that there was no violation of Rule 96(10) of the CGST Rules.
The Court stated that the Appellate Authority should have considered the additional documents to verify whether the petitioner was eligible for refund, as import of capital goods under Notification No. 79/2017 was excluded from the scope of Rule 96(10).
Accordingly, the bench quashed the order passed by the Appellate Authority and remanded the matter for fresh consideration after verifying the additional evidence. The Appellate Authority was directed to complete this exercise within twelve weeks from the receipt of the order.
With these directions, the petition was disposed of.
The matter was taken up on October 27, 2025, before Justice Aravind Kumar and Justice N.V. Anjaria of the Supreme Court. After hearing both sides, the Court held that there were no valid grounds to entertain the petition and accordingly dismissed the Special Leave Petition. The Bench clarified that no opinion was expressed on the merits, and all pending applications were disposed of.
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