1. Settlement Commission
Constituted on the recommendations of Committee headed by Justice K N Wanchoo
Door opened for settlement for one-time tax defaulter
Win-win for Tax Administrator and Taxpayer
Budget of 1992
Statutory provisions
Chapter V [ sections 31, 32 and 32A to 32P] of CE Act
Also made applicable to ST vide section 83 of Finance Act,1994
Chapter XIVA [ sections 127A to 127N] of Customs Act

2. Benches
Four Benches: Principal Bench headed by chairman in Delhi and Addition Benches headed by a vice-chairman at Mumbai, Chennai and Kolkata
Each Bench has three members including Chairman and Vice-chairman
A Commissioner( Investigation) in each Bench

3. Section 32E. Application for settlement of cases. -
(1) An assessee may, in respect of a case relating to him, make an application, before adjudication
containing a full and true disclosure of his duty liability which has not been disclosed before Central Excise
the additional amount of excise duty accepted by him
on account of misclassification, under-valuation, inapplicability of exemption notification or Cenvat credit or otherwise
application shall be disposed of in the manner hereinafter provided

4. conditions-
   filed returns [ SC can dispense with this ]
   SCN issued for recovery of duty
   additional amount of duty accepted exceeds three lakh rupees
  paid the accepted additional amount of duty along with interest due under section 11AB

5. no application in cases pending with the Appellate Tribunal or any court:
no application for the interpretation of the classification of excisable goods

6. "case“
means any proceeding for the levy, assessment and collection of excise duty,
pending before an adjudicating authority on the date on which an application
If any proceeding is referred back to the Adj Authority or by any court, Tribunal or any other authority,
then such proceeding shall not be deemed to be a proceeding pending

7. SECTION 127B. Application for settlement of cases
SECTION 127B. Application for settlement of cases. - (1) Any importer, exporter or any other person may, in respect of a case make an application, before adjudication
full and true disclosure of his duty liability which has not been disclosed before the proper officer
the additional amount of customs duty accepted
on account of misclassification, under-valuation or inapplicability of exemption notification or otherwise      
    

8.  Conditions
the applicant has filed a bill of entry,
or a shipping bill [ SC can dispense with this]
a show cause notice has been issued to him
accepted additional amount of duty accepted by exceeds three lakh rupees
paid the additional amount of customs duty accepted by him along with interest due under section 28AB :
   

9. no application
in cases pending in the Tribunal or court
goods to which section 123 applies
goods: offence under the NDPC
interpretation of classification

10. Section 32F: Procedure on receipt of an application under section 32E
SC issues notice within 7 days to explain why the application should be allowed to be proceeded with
after considering the explanation of applicant
SC within a period of 14 days of the notice, by an order,
allows the application to be proceeded with,
or reject the application
proceedings abate on the date of rejection
If no notice is issued or no order is passed within the aforesaid periods
application deemed to be allowed to be proceeded with.

11. SC within 7 days from the appln is allowed/deemed to be allowed
Calls for a report the Commissioner CEX
Commissioner furnishes the report within a period of thirty days
If no report received  SC proceeds further in the matter without the report of the Commissioner.
If report is received SC examines it

12. if further enquiry or investigation required
SC asks the Commissioner (Investigation) to investigate and submit report within 90 days
If report not furnished the report in 90 days
SC proceeds to pass an order without such report

13. SC examines the reports , hears the applicant and revenue and passes order
Order to be passed not later than 9 months of the last day of the month of receipt of the application
SC records the reasons to
extend 9 months by not more than3 months
If no order is passed within 9 months or the extended period
proceedings before SC abates and case goes back to the AA.

14. Ingredients of Settlement order
Order by majority
provides for the terms of settlement including
any demand of duty, penalty or interest
manner of payment of settled amounts
other matters to make the settlement effective
in case of rejection contains reasons therefor
settled duty not less than the admitted duty
settlement shall be void if it is later found that it was obtained by fraud or misrepresentation

15. If settled amounts not paid within thirty days
amount remaining unpaid are recovered with interest as sums due to Govt under section11
If settlement becomes void
the proceedings with respect to the matters covered by the settlement shall be deemed to have been revived from the stage at which the application was allowed to be proceeded with by SC
CEX officer may complete such proceedings
at any time before the expiry of two years from the date of the receipt of communication that the settlement became void.

16. Section 32 I Powers and procedure
Beside the prescribed powers,SC has all powers of CEX officer
If application has been allowed or deemed to be allowed to be proceeded with
SC has exclusive jurisdiction

17. Section 32K Power to grant immunity from prosecution and penalty.
If SC is satisfied that the applicant
co-operated in the proceedings
made a full and true disclosure of duty liability,
SC grants immunity to such person subject to conditions as imposed
from prosecution
either wholly or in part from penalty and fine
no immunity from prosecution
if prosecution instituted before receipt of application

18. Immunity stands withdrawn
if fails
to pay settled amounts sum specified
to comply with condition of immunity
SC may withdraw immunity to the person
If during settlement proceedings
concealed any particular material to the settlement
gave false evidence

19. Section 32L. Power to send a case back to the Central Excise Officer. -
SC may, if it is of opinion that the applicant has not co-operated
send the case back to the CEX Officer
who will dispose of the case as if no application was made.

20. Section 32M. Order of settlement to be conclusive
Every order of settlement passed shall be conclusive as to the matters stated therein
No matter covered by such order shall be reopened in any proceeding under this Act or under any other law for the time being in force.

21. Section 32O. Bar on subsequent application
Bar on subsequent application in following circumstances
SC`s earlier order imposed penalty on the ground of concealment of duty liability
after SC`s order, person is convicted of offence in relation to that case;
  the case of the applicant was sent back by SC to the CEX officer

22. Case laws
Jurisdiction and powers in fraud cases 2006 (199) E.L.T. 8 (Bom.) (Union of India v. Hoganas India Ltd.).
All applications including cases of fraud, smuggling or deliberate misdeclaration

23. 2016 (337) E.L.T. 462 (Tri. - Mumbai) MOTILAL GUPTA
Case of main noticee settled by SC
Penalty on co-noticees
if liability of co-noticee arise from same act and
co-noticee is employee /agent of main noticee
he is entitled to immunity from further proceedings
if liability of co-noticee arises from different act committed in his own capacity
he will not get immunity from further proceedings

24. 2016 (337) E.L.T. 175 (Del.) IHH INTERIOR LTD
rejection of application at preliminary stage only
when full and true disclosure not made by applicant
Even after admission, such application can be rejected on the ground of non-cooperation by applicant
and matter sent to adjudicating authority
In instant case, none of aforesaid grounds present
Settlement application not liable for rejection
merely on the ground of difference on certain factual details between Department and applicant

25. 2016 (337) E.L.T. 11 (A.P.) SALVO EXPLOSIVES & CHEMICALS PVT.
SC`s order - Reopening, when justified
Petitioner’s application seeking revision on ground of error in calculation
rejected by Settlement Commission because order already passed is final and conclusive
HELD fit case for reconsideration by Settlement Commission

26. 2016 (336) E.L.T. 402 (Guj) DHARMESH DEVCHAND PANSURIYA
Goods notified under Section 123(2) of Customs Act: Gold - Polyester Fabrics
3rd proviso to Section 127B(1) excludes jurisdiction of Settlement Commission in respect of goods to which Section 123 applies
Aforesaid two items being covered under Section 123(2)
Settlement Commission rightly denied jurisdiction

27. 2016 (336) E.L.T. 224 (Del.) ASHOK KUMAR
Baggage case not being covered under any of excluded categories of Section 127B of Customs Act
SC competent to entertain settlement application
Provisions conferring jurisdiction to SC to entertain applications required to be construed liberally and not narrowly

28. 2016 (336) E.L.T. 201 (Del.) AMIT SIROHI
Settlement Commission has exclusive jurisdiction after application is allowed to be proceeded with
issuance of corrigendum/addendum to SCN after settlement application is admitted is not sustainable

29. 2016 (334) E.L.T. 402 (Cal.) ROHIT FERRO TECH LTD
Bar on subsequent application
Penalty imposed by Commission in earlier cases for concealment of duty liability
Single Judge erred in overlooking clear findings of SC on nature of penalty imposed in said order
Order of SC in not admitting subsequent application cannot be faulted
Order of Single Judge of remand to SC quashed

30. 2016 (334) E.L.T. 177 (Sett. Comm.) IN RE : RESPONSIVE INDUSTRIES LTD
Bar on subsequent application only when subsequent application is filed after issuance of order on earlier application in which penalty is imposed for concealment Settlement of case
quantum of penalty
fact that during relevant period varying practices of levy of SAD prevalent and matter finally clarified by C.B.E. & C. has to be considered

31. 2015 (323) E.L.T. 424 (Del.) Ram Niwas
Settlement Commission has no jurisdiction to settle gold smuggling cases: Section 123
SLP dismissed by Apex Cort[2016 (331) E.L.T. A129 (S.C.)]

32. 2015 (328) E.L.T. 22 (Del.) ROHIT BAL DESIGNS P. LTD.
Non-filing of returns - Retrospective filing, thereof
HC in Bharat Industries Works WP(C) 5091/2003 allowed filing of returns retrospectively
In view of said precedent, petitioner allowed to file returns for disputed period within six weeks
On compliance, application before SC shall stand restored for consideration on merits

33. 2015 (327) E.L.T. 37 (P & H) ANKUSH KHULLAR
Expression “before adjudication” appearing in Section 127B of Customs Act refers to adjudication by adjudicating authority
Where adjudication is concluded
jurisdiction of Settlement Commission to entertain application for settlement barred
SC rightly rejected the same summarily

34. 2015 (325) E.L.T. 833 (Del.) M.I. ENTERPRISES
Penalty - Quantum of
Writ Petition filed by Department on the ground that lenient view taken in imposition of penalty
Proceedings before Settlement Commission not being adjudicatory
High Court not to sit in appeal over settlement orders –
No interference called for in aforesaid order

35. 2014 (307) E.L.T. 438 (All.) VINAY WIRE & POLY PRODUCT P. LTD.
Settlement Commission order
sending matter back to adjudicating authority concluding that it would not be possible for Commission to settle the dispute
SC order is challenged on Ground: matter could be sent back only if applicant did not cooperate
Held: Ground rejected Contd

36. Brought from
Power under Section 32L to send back the matter is in addition to powers under Sections 32F(5) & 32F(8)
Under 32L Commission passes order as it thinks fit
powers not only to decide the terms of settlement
but also to reject the application, recording reasons therefor
it cannot be said that matter can be sent back by only if applicant did not cooperate with it

37. 2014 (301) E.L.T. 321 (Guj.) VADILAL GASES LIMITED
Dismissal of application for non-compliance with clause (d) of proviso to Section 32E(1)
Second application filed after payment of Additional Excise Duty with interest
HELD : Maintainable as first application was dismissed on technical ground, and even principle of res judicata would not apply as matter was not determined on merits [ Contd]

38. Brought from
Powers of SC should be considered to be possessed with such ancillary or incidental powers that are necessary to discharge its function effectively for the purpose of doing justice between the parties
has power to regulate its own procedure in discharge of its functions
If application made before it is defective
SC may allow time to remove the defect or may direct that the application be returned [ contd]

39. Brought from
However, applications which are not maintainable because of the embargo created by the first proviso to Section 32E(1)
cannot be entertained under Section 32F(1) as scope of Section 32F is limited to valid applications which do not suffer from any bar created by the first proviso to Section 32E(1)

40. 2014 (299) E.L.T. 142 (A.P.) TRUWOOD PVT. LTD.
SC can pass final orders
not only in relation to matters covered by application
also any other matter relating to “case” not covered by application
& referred in report of Commissioner Cex and Commissioner (Inv) (Contd)

41. Brought from
Issue of lack of jurisdiction of SC raised by Commissioner CEX
said issue decided by SC in its order of admission
SC order that order of Commissioner dated is non est in law is a finding given by SC under Section 32F(7)
SC order is upheld

42. 2010 (258) E.L.T. 476 (Bom.) UOI vs Settl Commn
Settlement Commission - Jurisdiction in proceedings for recovery of drawback
Duty drawback or claim for duty drawback is nothing but claim for refund of duty Sections 74 and 75
SC has jurisdiction

43. 2010 (257) E.L.T. 42 (Del.) QUALIMAX ELECTRONICS PVT. LTD.
Adjudication order dated
Sent by regd post on
received after when application for settlement filed
Issue whether on date of settlement application, case already stood adjudicated or not
SC rejected application holding case already adjudicated
Adjudication order signals end of case pending before adjudicating authority
it closes window of opportunity of settlement
Receipt of adj order not relevant for settlement of case ( contd)

44. Brought from
Date of adjudication to be the date when such order goes out of control of adjudicating authority by signing and sending it to assessee –
Date of dispatch from office Adj Authority relevant
Adj order left office of AA on and then adjudication became effective
Pre-condition of case pending adjudication on date of application is not satisfied
SC order rejecting application upheld

45. 2009 (243) E.L.T. 679 (Mad.) OPTIGRAB INTERNATIONAL
Settlement Application - Maintainability
Bill of entry or shipping bill was issued by three authorities and three show cause notices are issued
Unless the amount mentioned in the show cause notice in a case exceeds Rs. 3 lakhs, the Settlement Commission has no jurisdiction to entertain the settlement application under Section 127B
Maintained in 2010 (253) E.L.T. 722 (Mad.) OPTIGRAB INTERNATIONAL

46. 2007 (220) E.L.T. 995 (Sett. Comm.) IN RE UNIVERSAL EXPORTS
No legal bar for admission of an application from a COFEPOSA detenue or an absconder
An applicant’s so called abscondence cannot be a bar to entertain his application by the Settlement Commission - Section 127C

47. 2007 (220) E.L.T. 535 (Sett. Comm.) IN RE : MARSHAL POWER AND TELECOM
Adjudication order passed on became effective on when received by applicant,
by which time, applicant had filed application
as such the “case” was pending before CEX officer on the date of filing application
Applicant received adj order subsequent to filing of application,
hence adj order
cannot be given any cognizance of
held as non est
Application admitted

48. THANKS Settlement Commission Additional Bench, Kolkata