Customs - Acts 1962, Chapter- XIVA, Settlement of Cases.
CHAPTER XIVA - SETTLEMENT OF CASES
127A. Definitions
127B. Application for settlement of cases
127C. Procedure on receipt of application under section 127B
127D. Power of Settlement Commission to order provisional attachment to protect
revenue. -
127E. Power of Settlement Commission to reopen completed proceedings.
127F. Power and procedure of Settlement Commission
127G. Inspection, etc., of reports
127H. Power of Settlement Commission to grant immunity from prosecution and
penalty
127-I. Power of Settlement Commission to send a case back to the proper officer.
127 J. Order of settlement to be conclusive. -
127K. Recovery of sums due under order of settlement.
127L. Bar on subsequent application for settlement in certain cases
127M. Porceedings before Settlement Commission to be judicial proceedings
127MA. Certain persons who have filed appeals to the Appellate Tribunal entitled
to make applications to the Settlement Commission.
127N. Applications of certain provisions of Central Excise Act
CHAPTER XIVA - SETTLEMENT OF CASES
127A. Definitions. — In this Chapter,
unless the context otherwise requires, -
- "Bench" means a Bench of the Settlement Commission;
- "case" means any proceeding under this Act or any other Act for the
levy, assessment and collection of customs duty, or any proceeding by way of
appeal or revision in connection with such levy, assessment or collection,
which may be pending before a proper officer or the Central Government on
the date on which an application under sub-section (1) of section 127B is
made :
Provided that where any appeal or application for revision has been
preferred after the expiry of the period specified for the filing of such
appeal or application for revision under this Act and which has not been
admitted, such appeal or revision shall not be deemed to be a proceeding
pending within the meaning of this clause;
- "Chairman" means the Chairman of the Settlement Commission;
- "Commissioner (Investigation)" means an officer of the customs or a
Central Excise Officer appointed as such Commissioner to conduct inquiry or
investigation for the purposes of this Chapter;
- "Member" means a Member of the Settlement Commission and includes the
Chairman and the Vice-Chairman;
- "Settlement Commission" means the Customs and Central Excise Settlement
Commission constituted under section 32 of the Central Excise Act, 1944 (1
of 1944); and
- "Vice-Chairman" means a Vice-Chairman of the Settlement Commission.
127B. Application for settlement of cases. -
- Any
importer, exporter or any other person (hereinafter referred to as the applicant
in this Chapter) may, at any stage of a case relating to him make an application
in such form and 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 and such
other particulars as may be specified by rules including the particulars of such
dutiable goods in respect of which he admits short levy on account of
misclassification or otherwise of goods, to the Settlement Commission to have
the case settled and such application shall be disposed of in the manner
hereinafter provided :
Provided that no such application shall be made unless -
- the applicant has filed a bill of entry, or a shipping bill, in respect of
import or export of goods, as the case may be, and in relation to such bill of
entry or shipping bill, a show cause notice has been issued to him by the proper
officer;
- the additional amount of duty accepted by the applicant in his application
exceeds two lakh rupees :
Provided further that no application shall be entertained by the Settlement
Commission under this sub-section in cases which are pending in the Appellate
Tribunal or any Court:
Provided also that no application under this sub-section shall be made in
relation to goods to which section 123 applies or to goods in relation to which
any offence under the Narcotic Drugs and Psychotropic Substances Act, 1985 (61
of 1985) has been committed:
Provided also that no application under this sub-section shall be made for the
interpretation of the classification of the goods under the Customs Tariff Act,
1975 (51 of 1975).
- Where any dutiable goods, books of account, other documents or any sale
proceeds of the goods have been seized under section 110, the applicant shall
not be entitled to make an application under sub-section (1) before the expiry
of one hundred and eighty days from the date of the seizure.
- Every application made under sub-section (1) shall be accompanied by such
fees as may be specified by rules.
- An application made under sub-section (1) shall not be allowed to be
withdrawn by the applicant.
127C. Procedure on receipt of application under section 127B. -
- On receipt
of an application under section 127B, the Settlement Commission shall call for a
report from the Commissioner of Customs having jurisdiction and on the basis of
the materials contained in such report and having regard to the nature and
circumstances of the case or the complexity of the investigation involved
therein, the Settlement Commission may, by order, allow the application to be
proceeded with or reject the application :
Provided that an application shall not be rejected under this sub-section,
unless an opportunity has been given to the applicant of being heard :
Provided further that the Commissioner of Customs shall furnish such report
within a period of one month of the receipt of the communication from the
Settlement Commission, failing which it shall be presumed that the Commissioner
of Customs has no objection to such application; but he may raise objections at
the time of hearing fixed by the Settlement Commission for admission of the
application and the date of such hearing shall be communicated by the Settlement
Commission to the applicant and the Commissioner of Customs within a period not
exceeding two months from the date of receipt of such application, unless the
presiding officer of the Bench extends the said period of two months, after
recording the reasons in writing.
- A copy of every order under sub-section (1) shall be sent to the applicant
and to the Commissioner of Customs having jurisdiction.
- Subject to the provisions of sub-section (4), the applicant shall, within
thirty days of the receipt of a copy of the order under sub-section (1) allowing
the application to be proceeded with, pay the amount of additional duty admitted
by him as payable and shall furnish proof of such payment to the Settlement
Commission.
- If the Settlement Commission is satisfied, on an application made under
sub-section (1) that the applicant is unable for good and sufficient reasons to
pay the amount referred to in sub-section (3), within the time specified in that
sub-section, it may extend the time for payment of the amount which remains
unpaid or allow payment thereof by instalments, if the applicant furnishes
adequate security for the payment thereof.
- Where the additional amount of customs duty referred to in sub-section (3)
is not paid by the applicant within the time specified or extended period, as
the case may be, the Settlement Commission may direct that the amount which
remains unpaid, together with simple interest at the rate of eighteen per cent.
per annum or at the rate notified by the Board from time to time on the amount
remaining unpaid, be recovered as the sum due to the Central Government by the
proper officer having jurisdiction over the applicant in accordance with the
provisions of section 142.
- Where an application is allowed to be proceeded with under sub-section (1),
the Settlement Commission may call for the relevant records from the
Commissioner of Customs having jurisdiction and after examination of such
records, if the Settlement Commission is of the opinion that any further enquiry
or investigation in the matter is necessary, it may direct the Commissioner
(Investigation) to make or cause to be made such further enquiry or
investigation and furnish a report on the matters covered by the application and
any other matter relating to the case.
- After examination of the records and the report of the Commissioner of
Customs received under sub-section (1), and the report, if any, of the
Commissioner (Investigation) of the Settlement Commission under sub-section (6),
and after giving an opportunity to the applicant and to the Commissioner of
Customs having jurisdiction to be heard, either in person or through a
representative duly authorised in this behalf, and after examining such further
evidence as may be placed before it or obtained by it, the Settlement Commission
may, in accordance with the provisions of this Act, pass such order as it thinks
fit on the matters covered by the application and any other matter relating to
the case not covered by the application, but referred to in the report of the
Commissioner of Customs or the Commissioner (Investigation) under sub-section
(1) or sub-section (6).
- Subject to the provisions of section 32A of the Central Excise Act,1944 (1
of 1944), the materials brought on record before the Settlement Commission shall
be considered by the Members of the concerned Bench before passing any order
under sub-section (7) and, in relation to the passing of such order the
provisions of section 32D of the Central Excise Act, 1944 (1 of 1944) shall
apply.
- Every order passed under sub-section (7) shall provide for the terms of
settlement including any demand by way of duty, penalty or interest, the manner
in which any sum due under the settlement shall be paid and all other matters to
make the settlement effective and shall also provide that the settlement shall
be void if it is subsequently found by the Settlement Commission that it has
been obtained by fraud, or misrepresentation of facts.
- Where any duty payable in pursuance of an order under sub-section (7) is
not paid by the applicant within thirty days of the receipt of a copy of the
order by him, then, whether or not the Settlement Commission has extended the
time for payment of such duty or has allowed payment thereof by instalments, the
applicant shall be liable to pay simple interest at the rate of eighteen per
cent. per annum or at such other rate as notified by the Board on the amount
remaining unpaid from the date of expiry of the period of thirty days aforesaid.
- Where a settlement becomes void as provided under sub-section (9) 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 the Settlement Commission and proper officer may,
notwithstanding anything contained in any other provision of this Act, 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.
127D. Power of Settlement Commission to order provisional attachment to protect
revenue. -
- 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 under
sub-section (1) 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.
127E. Power of Settlement Commission to reopen completed proceedings. - 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 :
Provided that no proceeding shall be reopened by the Settlement Commission under
this section after the expiry of five years from the date of application under
sub-section (1) of section 127B.
127F. Power and procedure of Settlement Commission. -
- In addition to the
powers conferred on the Settlement Commission under Chapter V of the Central
Excise Act, 1944 (1 of 1944), it shall have all the powers which are vested in
an officer of the customs under this Act or the rules made thereunder.
- Where an application made under section 127B has been allowed to be
proceeded with under section 127C, the Settlement Commission shall, until an
order is passed under sub-section (7) of section 127C, have, subject to the
provisions of sub-section (6) of that section, exclusive jurisdiction to
exercise the powers and perform the functions of any officer of customs or
Central Excise Officer as the case may be, under this Act or in the Central
Excise Act, 1944 (1 of 1944), as the case may be, in relation to the case.
- In the absence of any express direction by the Settlement Commission to the
contrary, nothing in this Chapter shall affect the operation of the provisions
of this Act in so far as they relate to any matter other than those before the
Settlement Commission.
- The Settlement Commission shall, subject to the provisions of Chapter V of
the Central Excise Act, 1944 (1 of 1944) and this Chapter, have power to
regulate its own procedure and the procedure of Benches thereof in all matters
arising out of the exercise of its powers, or of the discharge of its functions,
including the places at which the Benches shall hold their sittings.
127G. Inspection, etc., of reports. - No person shall be entitled to inspect, or
obtain copies of, any report made by any officer of the Customs to the
Settlement Commission; but the Settlement Commission may, in its discretion,
furnish copies thereof to any such person on an application made to it in this
behalf and on payment of such fee as may be specified by rules :
Provided that, for the purpose of enabling any person whose case is under
consideration to rebut any evidence brought on record against him in any such
report, the Settlement Commission shall, on an application made in this behalf,
and on payment by such person of such fee as may be specified by rules, furnish
him with a certified copy of any such report or part thereof relevant for the
purpose.
127H. Power of Settlement Commission to grant immunity from prosecution and
penalty. -
- The Settlement Commission may, if it is satisfied that any person
who made the application for settlement under section 127B 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 or under the Indian Penal Code (45 of 1860) or under any
other Central Act for the time being in force and also either wholly or in part
from the imposition of any penalty, fine and interest under this Act, with
respect to the case covered by the settlement:
Provided that 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 under section 127B.
- An immunity granted to a person under sub-section (1) shall stand withdrawn
if such person fails to pay any sum specified in the order of the settlement
passed under sub-section (7) of section 127C within the time specified in such
order or within such further time as may be allowed by the Settlement
Commission, 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 under sub-section (1) 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.
127-I. Power of Settlement Commission to send a case back to the proper officer.
-
- The Settlement Commission may, if it is of opinion that any person who
made an application for settlement under section 127B has not cooperated 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 under section 127B had been
made.
- For the purpose of sub-section (1), 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.
- For the purposes of the time limit under section 28 and for the purposes of
interest under section 28AA, in a case referred to in sub-section (1), 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.
127J. Order of settlement to be conclusive. - Every order of settlement passed
under sub-section (7) of section 127C shall be conclusive as to the matters
stated therein and no matter covered by such order shall, save as otherwise
provided in this Chapter, be reopened in any proceeding under this Act or under
any other law for the time being in force.
127K. Recovery of sums due under order of settlement.
- Any sum specified in an
order of settlement passed under sub-section (7) of section 127C may, subject to
such conditions, if any, as may be specified therein, be recovered, and any
penalty for default in making payment of such sum may be imposed and recovered
as sums due to the Central Government in accordance with the provisions of
section 142, by the proper officer having jurisdiction over the applicant.
127L. Bar on subsequent application for settlement in certain cases. - Where, -
- an order of settlement passed under sub-section (7) of section 127C provides
for the imposition of a penalty on the applicant under section 127B for
settlement, on the ground of concealment of particulars of his duty liability;
or
- after the passing of an order of settlement under said sub-section (7) in
relation to a case, such person is convicted of any offence under this Act in
relation to that case; or
- the case of such person is sent back to the proper officer by the
Settlement Commission under section 127-I,
then such person shall not be entitled to apply for settlement under section
127B in relation to any other matter.
127M. Proceedings before Settlement Commission to be judicial proceedings. - Any
proceedings under this Chapter before the Settlement Commission shall be deemed
to be a judicial proceeding within the meaning of sections 193 and 228, and for
the purposes of section 196, of the Indian Penal Code (45 of 1860).
127MA. Certain persons who have filed appeals to
the Appellate Tribunal entitled to make applications to the Settlement
Commission. -
- Notwithstanding
anything contained in this Chapter, any person who has filed an appeal to the
Appellate Tribunal under this Act, on or before the 29th day of February, 2000
and which is pending, shall, on withdrawal of such appeal from the Appellate
Tribunal, be entitled to make an application to the Settlement Commission to
have his case settled under this Chapter:
Provided that no such person shall be entitled to make an application under this
section in a case where the Commissioner of Customs or any officer on his behalf
has, on or before the date on which the Finance Act, 2000 receives the assent of
the President, applied to the Appellate Tribunal for the determination of such
points arising out of the decision or order specified by the Board in its order
under sub-section (1) of section 129D or filed an appeal under sub-section (2)
of section 129A, as the case may be.
- Any person referred to in sub-section (1) may make an application to the
Appellate Tribunal for permission to withdraw the appeal.
- On receipt of an application under sub-section (2), the Appellate Tribunal
shall grant permission to withdraw the appeal.
- Upon withdrawal of the appeal, the proceedings in appeal immediately before
such withdrawal shall, for the purposes of this Chapter, be deemed to be a
proceeding pending before a proper officer.
- An application to the Settlement Commission under this section shall be made
within a period of thirty days from the date on which the order of the Appellate
Tribunal permitting the withdrawal of the appeal is communicated to the person.
- An application made to the Settlement Commission under this section shall be
deemed to be an application made under sub-section (1) of section 127B and the
provisions of this Chapter, except sub-section (11) of section 127C and
sub-section (1) of Section 127-I, shall apply accordingly.
- Where an application made to the Settlement Commission under this section is
not entertained by the Settlement Commission, then, the appeal shall be deemed
to have been revived before the Appellate tribunal and the provisions contained
in section 129A, section 129B and section 129C shall, so far as may be, apply
accordingly.
- The Settlement Commission may, if it is of the opinion that any person who
made an application under sub-section (5) has not cooperated with proceeding
before it, send the case back to the Appellate Tribunal and provisions
containing in section 129A, section 129B and section 129C shall, so far as may
be, apply accordingly.
127N. Applications of certain provisions of Central Excise Act. - The provisions
of Chapter V of the Central Excise Act, 1944 (1 of 1944) in so far as it is not
inconsistent with the provisions of this Chapter shall apply in relation to
proceedings before the Settlement Commission under this Chapter.