Exemption in exceptional circumstances :
General exemptions from duty can be granted under section 11(1) of CGST Act and section 6(1) of IGST Act [parallel section 5A(1) of Central Excise and section 25(1) of Customs Act] by issuing a notification.
However, section 11(2) of CGST Act and section 6(2) of IGST Act [parallel section 5A(2) of Central Excise Act and section 25(2) of Customs Act] authorises Central Government to grant exemption, in public interest, in exceptional circumstances by a special order. Such exemption can be only on recommendation of GST Council.
It is not necessary to publish the order in Official Gazette.
This is ad hoc exemption and can be granted even retrospectively. – CBE&C circular No. 12/97-Cus dated 12-5-1997. – same view in KhodayEngg Ltd. v. CCE 1999 (105) ELT 326 (CEGAT), where it was held that order issued u/s 5A(2) of CEA has retrospective effect and it applies to all clearances, even before issue of the order – same view in Indian Leaf Tobacco Development Co. v. UOI 1984 (16) ELT 234 (Mad HC).
In Aeronautical Development Agency v. CC 2001 (133) ELT 685 (CEGAT), it was held that time limit u/s 27 of Customs Act for filing refund claim is not applicable to refund claim filed after receipt of ad hoc order of exemption, when at the time of submitting Bill of Entry, importer had filed letter that its application for exemption u/s 25(2) is under consideration and he will file refund claim at appropriate time.
In Jain Exports P Ltd. v. UOI 1998 (98) ELT 581 (SC), it was held that granting exemption to public sector undertakings giving reasons for such exemption, but not giving similar exemption to private person importing same goods is permissible. It is not discriminatory.