POWERS OF SETTLEMENT COMMISSION UNDER CUSTOMS ACT, 1962

[Mr. M. GOVINDARAJAN]

Section 32 of the Central Excise Act, 1944 empowers the Central Government to constitute a Settlement Commission to be called the ‘Customs and Central Excise Settlement Commission’ for the settlement of the Central Excise and Customs cases.

• The Settlement Commission shall consist of a Chairman and many Vice Chairman and other members as the Central Government thinks fit;
• The Settlement Commission shall function within the Department of the Central Government dealing with customs and central excise matters;
• The Chairman, Vice-Chairman and other Members of the Settlement Commission shall be appointed by the Central Government from amongst person of integrity and outstanding ability, having special knowledge of, and experience in, administration of customs and central excise laws.

If a member of the Board is appointed as Chairman or Vice Chairman or member of the Settlement Commission, he shall cease to be  a member of the said Board.  Section 127A(f) defines the terms ‘Settlement Commission’ as  the Customs, Central Excise and Service Tax Settlement Commission constituted under section 32 of the Central Excise Act, 1944.

Section 127B of the Customs Act, 1962 provides the procedure for filing application before Settlement Commission.  Section 127C prescribes the procedure to be followed by the Settlement Commission on receipt of the application for settlement.  In this article various powers of Settlement Commission conferred under Customs Act, 1962, while disposing of settlement application is discussed.

Power of Commission for provisional attachment

Section 127D provides that where, during the pendency of any proceeding before it, the Settlement Commission is of the opinion that for the purpose of protecting the interests of the revenue it is necessary so to do, it may, by order, attach provisionally any property belonging to the applicant in such manner as may be specified by rules.   Every provisional attachment made by the Settlement Commission shall cease to have effect from the date the sums due to the Central Government for which such attachment is made are discharged by the applicant and evidence to that effect is submitted to the Settlement Commission.

Rule 5 of Manner of Provisional Attachment of Property – Customs (Settlement of Cases) Rules, 2007 provides that 2the Settlement Commission orders attachment of property under sub-section (1) of section 127D, it shall send a copy of such order to the Commissioner of Customs or the Commissioner of Central Excise having jurisdiction over the place in which the applicant owns any movable or immovable property or resides or carries on his business or has his bank account.  The Commissioner may authorize any officer subordinate to him and not below the rank of an Assistant Commissioner of Customs or an Assistant Commissioner of Central Excise, as the case may be, to take steps to attach such property of the applicant.  The officer authorized shall prepare an inventory of the property attached and specify in it, in the case of the immovable property the description of such property sufficient to identify it and in case of the movable property, the place where such property is lodged or kept and shall hand over a copy of the same to the applicant or to the person from whose charge the property is attached. The officer authorized under shall send a copy of the inventory so prepared each to the Commissioner of Customs or the Commissioner of Central Excise, as the case may be, and also to the Settlement Commission.

Power of Commission to reopen the completed proceedings

Section 127E provides that if the Settlement Commission is of the opinion (the reasons for such opinion to be recorded by it in writing) that, for the proper disposal of the case pending before it, it is necessary or expedient to reopen any proceeding connected with the case but which has been completed under this Act before application for settlement under section 127B was made, it may, with the concurrence of the applicant, reopen such proceeding and pass such order thereon as it thinks fit, as if the case in relation to which the application for settlement had been made by the applicant under that section covered such proceeding also.  No proceeding shall be reopened by the Settlement Commission under this section after the expiry of five years from the date of application

No proceeding shall be reopened by the Settlement Commission under this section in a case where an application under section 127B is made on or after the 1st day of June, 2007.

Power to grant immunity from prosecution and penalty

Section 127H provides that the Settlement Commission may, if it is satisfied that any person who made the application for settlement has co-operated with the Settlement Commission in the proceedings before it and has made a full and true disclosure of his duty liability, grant to such person, subject to such conditions as it may think fit to impose, immunity from prosecution for any offence under this Act and also either wholly or in part from the imposition of any penalty and fine under this Act, with respect to the case covered by the settlement.

No such immunity shall be granted by the Settlement Commission in cases where the proceedings for the prosecution for any such offence have been instituted before the date of receipt of the application.

An immunity granted to a person shall stand withdrawn if such person fails to pay any sum specified in the order of the settlement passed  within the time specified in such order, or fails to comply with any other condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted.

An immunity granted to a person may, at any time, be withdrawn by the Settlement Commission, if it is satisfied that such person had, in the course of the settlement proceedings, concealed any particulars, material to the settlement or had given false evidence, and thereupon such person may be tried for the offence with respect to which the immunity was granted or for any other offence of which he appears to have been guilty in connection with the settlement and shall also become liable to the imposition of any penalty under this Act to which such person would have been liable, had no such immunity been granted.

Power of Commissioner to send back the case to proper Officer

Section 127I deals that the Settlement Commission may, if it is of opinion that any person who made an application for settlement has not co-operated with the Settlement Commission in the proceedings before it, send the case back to the proper officer who shall thereupon dispose of the case in accordance with the provisions of this Act as if no application had been made.

For the purpose of this section the proper officer shall be entitled to use all the materials and other information produced by the assessee before the Settlement Commission or the results of the inquiry held or evidence recorded by the Settlement Commission in the course of the proceedings before it as if such materials, information, inquiry and evidence had been produced before such proper officer or held or recorded by him in the course of the proceedings before him.

The time limit under section 28 and for the purposes of interest under section 28AA, the period commencing on and from the date of the application to the Settlement Commission under section 127B and ending with the date of receipt by the officer of customs of the order of the Settlement Commission sending the case back to the officer of customs shall be excluded.