Introduction to The Customs and Central Excise Settlement Commission

The Central Government have constituted the Customs & Central Excise Settlement Commission under Section 32 of the Central Excise Act 1944 vide notification No. 40/99-CX(NT) dated 9.6.1999. The commission shall consist of a Principal Bench at Delhi and one additional Bench each at Calcutta, Chennai and Mumbai. The Principal Bench shall have a Chairman and two Members whereas each of the additional Benches will consist of a Vice-Chairman and two Members. The Commission shall function under the Department of Revenue.

Any assessee can make an application in such form and in such manne as may be prescribed by the Commission and containing “ Full & True” disclosure of his duty liability which has not been disclosed before the proper officer having jurisdiction, the manner in which such liability has been derived, the additional amount of Customs or Excise duty accepted to be payable by him as also the particulars of excisable goods or import or export goods in respect of which he admits short levy. The following category of cases are excluded from the purview of the Settlement Commission.

(i) Cases relating to Customs duty where no Bill of Entry or Shipping Bill, as the case may be, has been filed in before no Show-cause-Notice has been issued to the applicant.
(ii ) Cases relating to Central Excise duty where no monthly returns showing production, clearances and Central Excise Duty paid in the prescribed manner has been filed.
(iii ) Central Excise assessee to whom no show cause notice has been issued.
(iv) Cases where the additional amount of duty accepted by the applicant in his application does not exceed Rs. 2 lakhs.
(v) Customs and Central Excise cases which are pending with the Appellate Tribunal or with any court at the time of making the application.
(vi) Cases involving seizure of goods or documents under the Customs Act or the Central Excises Act, as the case may be before the expiry of 180 days from the date of the seizure.
(viii) Customs cases to which section 123 of the Customs Act applies or cases under the NDPS Act.

Application once made before the Settlement Commission cannot withdrawn by the applicant and every application shall be accompanied by such fees as may be prescribed by the Commission.

The application filed by an assessee shall be dealt with by the Commission in terms of provisions of section 32-F of the Central Excises Act or section 127-C of the Customs Act, as the case may be.

No such application shall be rejected unless an opportunity has been given to the applicant of being heard.

Once the application is allowed by the Commission to be proceeded with, the applicant will have to pay the amount of additional duty admitted by him as payable within 30 days of the receipt of the order allowing the application to be proceeded with. The Commission, however, would have powers to extend the aforesaid time for payment or to allow payment in instalments provided the applicant furnishes adequate security for the payment thereof. The decisions of the Commission shall be by majority.

The Commission would have powers to order provisional attachment of any property belonging to the applicant for the purpose of protecting the interest of revenue during the pendency of any proceedings before it. The Settlement Commission would also have powers to grant immunity from prosecution for any offences under the Central Excises Act, the Customs Act or under the Indian Penal Code or under any other Central Act for the time being in force in respect of the case covered by the Settlement Commission. The Commission would also have powers to grant immunity either wholly or in part from the imposition of any penalty, fine and interest under the Central Excises Act or the Customs Act, as the case may be in respect of the case covered by the Settlement Commission in cases where the proceedings for the prosecution for any such offence have been instituted before the date or receipt of the application under section 32-E of the Central Excise Act or section 127-F of the Customs Act.

The Commission would also have powers to re-open completed proceedings under certain circumstances with the concurrence of the applicant.

The Commission would also have powers to send a case back to the proper officer in the event of the applicant not cooperating with the Commission in the proceedings before it.

The order passed by the Commission shall be conclusive. The applicant shall not be entitled to apply for settlement in relation to any other matter if the applicant has been penalised by the Commission on the ground of concealment of particulars of his liability in a case or after passing of an order of settlement in relation to a case, the applicant is convicted of any offence in relation to that case or if the applicant’s case has been sent back to the proper officer by the Commission.

The proceeding before Settlement Commission shall be Judicial Proceedings within the meaning of section 193 and section 228 of the Indian Penal Code and for the purpose of section 196 of the said Code. Section 193 of the IPC provides for punishment for intentionally giving false evidence in any Judicial proceeding. Section 196 of the IPC provides for punishment for using evidence known to be false and section 228 of the IPC provides for punishment for intentional insult or interruption to any public servant sitting in Judicial proceedings.