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TMI Blog2019 (5) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... was engaged in the processing of hosiery fabric and woven fabric at the units established at No.29, Marapalam Road, KAS Nagar, Karungalpalayam East, Erode- 3. According to the petitioner, its branch, namely, M/S.Majestic Dyers and Printers (MDP) had obtained a certificate from the Khadi and Village Industries Commission(KVIC) on 14.02.1995 for the purpose of processing a fabric known as Polyvastra. Based on the said certification, the Petitioner states that it carried out processing of Polyvastra at the above mentioned unit during the period extending from November 1996 to March 2002 and that, thereafter, with effect from April 2002, the approval from KVIC was obtained in the name of the Petitioner. 3.In respect of the processing of polyvastra between November 1996 and 2002, the Petitioner availed the benefit of Notification No.8/96 CE dated 23.07.1996(Notification No.8/96) which grants complete exemption from payment of duty in respect of Polyvastra and Khadi. In these facts and circumstances, pursuant to an inspection by the Central Excise Department on 22.09.2000, show cause notice dated 24.10.2001 was issued by the Office of the Commissioner of Central Excise, alleging inter a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject matter of the application as per Section 32-I(2) thereof. 6.This was followed by Order dated 27.06.2005, whereby the Settlement Commission directed the Commissioner(Investigation)to investigate and submit a report on the factual aspects relating to inter alia, the availment of exemption under Notification No.8/96 dated 23.07.1996. Pursuant to the above mentioned order, the investigation was carried out by the Commissioner(Investigation) and Investigation Report dated 26.05.2006 was submitted. In paragraph 7 of the Investigation Report, it is stated that MDP obtained approval from KVIC on 14.12.1995 and that KVIC approval was obtained in the name of the Petitioner in April 2002. With regard to the critical question as to whether the Petitioner can avail the benefit of the exemption notification on the basis of the KVIC approval of MDP, the Investigation Report states as follows:- "The objection of revenue appears to apply the letter of law rigorously whereas the spirit of law would probably advocate a liberal approach as KVIC themselves appear to have adopted. Since this is a matter that requires application of principles of jurisprudence, the Hon'ble Commission may take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount as per the Impugned Order is a sum of Rs. 2,60,28,995/-. 9.The learned counsel appearing for the Petitioner submitted that MDP was a branch of the Petitioner until the year 2002 and that, therefore, the KVIC certification that was issued to MDP could be relied upon by the Petitioner in order to avail the exemption. In this connection, the Partnership Deed dated 01.04.1996 of the Petitioner was relied upon. It was further contended that all the partners of the Petitioner previously carried on business in partnership under the name and style of M/s.Madurai Tex and that the said M/s.Madurai Tex had branches under the name and style of M/S.Majestic Dyers and Printers(MDP), M/S.SCM Textile Processing Mill and M/s.SCM Printing Works. In order to substantiate this submission, the registration certificate issued by the Commercial Tax Officer, Tiruppur(South), on 06.10.1980, in the name of M/s.Madurai Tex was referred to and relied upon. Therefore, it was contended that the Petitioner is entitled to complete exemption from the payment of excise duty as per Notification No.8/96. In this regard, the learned counsel for the Petitioner invited the attention of the Court to entry 52.09 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Petitioner was granted exemption from penalty and prosecution. Consequently, the learned counsel for the Respondents contended that the Order of the Settlement Commission cannot be assailed partly by a party that has obtained substantial benefits by approaching the Settlement Commission instead of contesting the demand by resorting to the regular dispute resolution process under the Act. In order to substantiate this submission, the learned counsel for the Respondents referred to the Judgment of this Court in STANDARD SHOE SOLE AND MOULD (I) LTD Vs. CUSTOMS AND CENTRAL EXCISE SETTLEMENT COMMISSION, CHENNAI, reported in 2018 (360) E.L.T. 866 (Mad.), wherein, the Division Bench of this Court, in paragraph 8, referred to the Judgment of the Hon'ble Supreme Court in SINGHVI RECONDITIONERS PRIVATE LTD., Vs. UNION OF INDIA AND OTHERS, reported in 2010 (251) E.L.T.3, wherein it was held that "the appellant cannot be permitted to dissect the Settlement Commissioner's order with a view to accept what is favourable to them and reject what is not." In the same Paragraph of the said Division Bench Judgment, another Judgment of the Hon'ble Supreme Court in UNION OF INDIA Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the statute and the object and purpose to be achieved. If exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is failure to comply with some requirements which are directory in nature, the non-compliance of which would not affect the essence or substance of the notification granting exemption." The learned counsel for the Respondents also referred to paragraph 21 of the Impugned Order, wherein the Settlement Commission recorded that the approval is only for MDP and that the applicant/petitioner herein is not entitled to the benefit of the exemption notification. 13.This Court has carefully considered the affidavit, counter affidavit, documents and oral and written submissions of both sides. 14.It is evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age". [See: Verschures Creameries Ltd. v. Hull and Netherlands Steamship Co. Ltd., (1921) 2 R.B. 608, at p.612, Scrutton, L.J]. According to Halsbury's Laws of England, 4th Edn.,Vol. 16, "after taking an advantage under an order (for example for the payment of costs) a party may be precluded from saying that it is invalid and asking to set it aside". (para 1508). The Judgment of the Hon'ble Supreme Court in SANGHVI RECONDITIONERS CASE(cited supra) and relied upon by the learned counsel for the respondents would squarely apply to the instant case. Equally, the Judgment of the Division Bench of this Court in STANDARD SHOE SOLE AND MOULD (I) LTD CASE(cited supra) would also be applicable to the present case. In both the cases, as rightly contended by the learned counsel for the Respondents, it has been held that a party cannot be permitted to dissect the order of the Settlement Commission and accept only the favourable portions while assailing the unfavourable portions. This is precisely what the Petitioner has attempted to do in this Writ Petition. In addition, the petitioner has failed to establish that the Impugned Order is contrary to the Act. The Orders of this Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he exemption from excise duty has been claimed by the Petitioner for the period commencing from the year 1996 and ending in the year 2002. Admittedly, the Petitioner had not obtained a certificate from KVIC in respect of processing of Polyvastra during the above said period. Accordingly, the Petitioner would not be entitled to the benefit of exemption Notification No.8/96. In this connection, as rightly contended by the learned counsel for the Respondents, an exemption notification is required to be construed strictly as held by the Hon'ble Supreme Court in COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI Vs. DILIP KUMAR & COMPANY reported in 2018(361), E.L.T. 577 (S.C.), Applying the said rule of strict construction, it is abundantly clear that the Petitioner is not entitled to avail the benefit of exemption Notification No.8/96 because the Petitioner is unable to establish that MDP and the Petitioner constituted one organization. In this regard, it is also relevant to state that the Petitioner was constituted by Partnership Deed dated 01.04.1996 but the Petitioner did not apply for obtaining KVIC certification until March 2002. 18.In the result, the Writ Petition is dismissed and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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