Settlement of Cases/ Settlement Commission - CBEC's Customs Manual 2023 - Customs

11. Settlement of Cases/ Settlement Commission: 11.1 Chapter XIV-A of Customs Act, 1962 provides an alternative channel for resolution of dispute for assessees without prolonged litigation in adjudication/appeals/revisions etc. by constituting Settlement Commission under section 32 of the Central Excise Act 1944 (1 of 1944). Presently, four Benches of the Settlement Commission function at Delhi, Mumbai, Chennai and Kolkata. Provisions relating to Settlement Commission are contained in Sections 127A to 127N of the Customs Act, 1962 In terms of Section 127B of the Customs Act, 1962, any importer, exporter or any other person, may file an application before the Settlement Commission to have the case settled, before adjudication of case. The application needs to be in such manner as may be specified by rules, and containing a full and true disclosure of his duty liability which has not been disclosed before the proper officer, the manner in which such liability has been incurred, the additional amount of customs duty accepted to be payable by him or such other particulars like admission of short levy on account of misclassification, undervaluation or inapplicability of exemption notification. It is also specified that no application can be made unless the appellant has filed a Bill of Entry, or a Shipping Bill, or a bill of export, or made a baggage declaration, or a label or declaration imported or exported through post or courier and in relation to such document or documents, a Show Cause Notice has been issued to him by the Proper Officer. Provided the additional amount of duty accepted by the applicant in his application exceeds Rs.3 lakhs. Provided further the applicant has paid the additional amount of customs duty accepted by him along with interest due under section 28AA. Provided further that no application shall be entertained by the Settlement Commission in cases which are pending in the Appellate Tribunal or in any Court. Similarly, the matters relating to interpretation of classification of the goods under the Customs Tariff Act, 1975, cannot be applied before the Commission. Also no application shall be made in relation to goods to which Section 123 of the Act applies or to goods in relation to which any offence under the Narcotics Drugs and Psychotropic Substances Act, 1985 has been committed. 11.2 The application made under sub-section (1) for settlement of cases shall be accompanied by fees specified by rules and an application once made under sub-section (1) shall not be allowed to be withdrawn by the applicant. 11.3 Sub-section (5) of section 127B prescribes that any person other than an applicant referred to in sub-section (1), may also make an application to the Settlement Commission in respect of a show cause notice issued to him in a case relating to the applicant which has been settled or is pending before the Settlement Commission and such notice is pending before an adjudicating authority. [Inserted by Finance Act, 2017 (7 of 2017), dt. 31-3-2017.] 11.4 The procedure prescribed for the Settlement Commissions essentially requires examination of the application for its acceptability, payment of additional duty admitted by the applicant, calling and examination of records from jurisdictional the Commissioner of Customs or Principal Additional Director General of Revenue Intelligence or Additional Director General of Revenue Intelligence, getting further enquiries/investigations caused from Commissioner of Customs or Commissioner (Investigation) attached to Settlement Commission, giving opportunity for detailed submission to the applicant and passing order by the Commission. 1[The settlement Commission may at any time within three months from the date of passing of the order under sub-section (5), may amend such order to rectify any error apparent on the face of record, either suo motu or when such error is brought to its notice by the jurisdictional Principal Commissioner of Customs or Commissioner of Customs of Customs or the applicant, PROVIDED that no amendment which has the effect of enhancing the liability of the applicant shall be made without given notice for such intention to the applicant and the jurisdictional Principal Commissioner of Customs or Commissioner of Customs of Customs and given them a reasonable opportunity of being heard. [Inserted by Finance Act, 2017 (7 of 2017), dt. 31-3-2017.] 11.5 The amount of settlement ordered by the Settlement Commission, shall not be less than the duty liability admitted by the applicant under section 127B while filing for settlement application. Where any duty, interest, fine and penalty payable in pursuance of an order under, is not paid by the applicant within thirty days of receipt of the order of Settlement Commission, such unpaid amount along with interest shall be recoverable in accordance with the provision of Section 142 of the Customs Act, 1962. 11.6 Section 127D of the Customs Act, 1962 prescribes that, where, during the pendency of any proceedings 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 prescribed by the rules. 11.7 The Settlement Commission have all the powers which are vested in an officer of the Customs under the Act or the rules made thereunder. Also, where, an application made has been allowed to be proceeded with under section 127C, the Settlement Commission shall, until an order is passed have, exclusive jurisdiction to exercise the powers and perform the functions of any officer of Customs or Central Excise Officer under the said Acts. 11.8 Any proceedings before the Settlement Commission shall be deemed to be a judicial proceeding and every order passed by the Settlement Commission under Section 127J of the Customs Act, 1962 is conclusive in respect of the matters stated therein and no matter covered by such order, save as otherwise provided in chapter XIV-A, be reopened in any proceeding under the Customs Act, 1962 or under any other law for the time being in force. The Settlement Commission can consider immunity from prosecution proceedings if the applicant cooperates with the Commission in the proceedings before it and makes full and true disclosure of his duty liability. Even grant of immunity, whole or part, from imposition of penalty, fine and interest may also be considered. [Refer Circulars No. 935/25/2010-CX, dated 21-9-2010, No. 27/27/94-CX, dated 2-31994, No.156/67/95-CX, dated 17-11-1995, No.515/11/2000-CX, dated 18-2-2000 and No.578/15/2001-CX, dated 20-6-2001 and Instructions F.No. 390/Misc./163/2010-JC, dated 20-10-2010 and F.No.390/170/92-JC, dated 13-1-1993]