127A. Definitions.—In this Chapter, unless the context otherwise requires,—
(a) ―Bench‖ means a Bench of the Settlement Commissioner;
2
[(b) ―case‖ means any proceeding under this Act or any other Act for the levy, assessment and
collection of customs duty, pending before an adjudicating authority on the date on which an
application under sub-section (1) of section 127B is made:
Provided that when any proceeding is referred back 3
*** by any court, Appellate Tribunal or any
other authority, to the adjudicating authority for a fresh adjudication or decision, as the case may be,
then such proceeding shall not be deemed to be a proceeding pending within the meaning of this
clause;]
(c) ―Chairman‖ means the Chairman of the Settlement Commission;
(d) ―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;
(e) ―Member‖ means a Member of the Settlement Commission and includes the Chairman and
the Vice Chairman;
(f) ―Settlement Commission‖ means the 4
[Customs, Central Excise and Service Tax Settlement
Commission] constituted under section 32 of the Central Excise Act, 1944 (1 of 1944); and
(g) ―Vice-Chairman‖ means a Vice-Chairman of the Settlement Commission.
127B. Application for settlement of cases.—5
[(1) Any importer, exporter or any other person
(hereinafter referred to as the applicant in this Chapter) may, in respect of a case, relating to him make an
application, before adjudication to the Settlement Commission to have the case settled, 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, under-valuation or inapplicability of exemption
notification 6
[or otherwise] and such application shall be disposed of in the manner hereinafter provided:
Provided that no such application shall be made unless,—
7
[(a) the applicant 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 accompanying the goods imported or exported through
post or courier, as the case may be, and in relation to such document or documents, a show cause
notice has been issued to him by the proper officer;]
(b) the additional amount of duty accepted by the applicant in his application exceeds three lakh
rupees; and
1. Ins. by Act 21 of 1998, s. 102 (w.e.f. 1-8-1998).
2. Subs. by Act 22 of 2007, s. 100, for clause (b) (w.e.f. 1-6-2007).
3. The words ―in any appeal or revision, as the case may be,‖ omitted by Act 20 of 2015, s. 85 (w.e.f. 14-5-2015).
4. Subs. by Act 25 of 2014, s. 83, for ―Customs and Central Excise Settlement Commission‖ (w.e.f. 6-8-2014).
5. Subs. by Act 22 of 2007, s. 101, for sub-section (1) (w.e.f. 1-6-2007).
6. Subs. by Act 14 of 2010, s. 57, for ―but excluding the goods not included in the entry made under this Act‖ (w.e.f. 8-5-2010).
7. Subs. by Act 25 of 2014, s. 84, for clause (a) (w.e.f. 6-8-2014).
83
(c) the applicant has paid the additional amount of customs duty accepted by him along with
interest due under 1
[section 28AA]:
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).
2
* * * * *]
3
* * * * *
(3) Every application made under sub-section (1) shall be accompanied by such fees as may be
specified by rules.
(4) An application made under sub-section (1) shall not be allowed to be withdrawn by the applicant.
4
[(5) 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, in such manner and subject to such conditions, as may be
specified by rules.]
5
[127C. Procedure on receipt of an application under section 127B.—(1) On receipt of an
application under section 127B, the Settlement Commission shall, within seven days from the date of
receipt of the application, issue a notice to the applicant to explain in writing as to why the application
made by him should be allowed to be proceeded with and after taking into consideration the explanation
provided by the applicant, the Settlement Commission, shall, within a period of fourteen days from the
date of the notice, by an order, allow the application to be proceeded with or reject the application, as the
case may be, and the proceedings before the Settlement Commission shall abate on the date of rejection:
Provided that where no notice has been issued or no order has been passed within the aforesaid period
by the Settlement Commission, the application shall be deemed to have been allowed to be proceeded
with.
(2) A copy of every order under sub-section (1) shall be sent to the applicant and to the 6
[Principal
Commissioner of Customs or Commissioner of Customs] having jurisdiction.
(3) Where an application is allowed or deemed to have been allowed to be proceeded with under
sub-section (1), the Settlement Commission shall, within seven days from the date of order under
sub-section (1), call for a report along with the relevant records from the 6
[Principal Commissioner of
Customs or Commissioner of Customs] having jurisdiction and the Commissioner shall furnish the report
within a period of thirty days of the receipt of communication from the Settlement Commission:
Provided that where the Commissioner does not furnish the report within the aforesaid period of
thirty days, the Settlement Commission shall proceed further in the matter without the report of the
Commissioner.
1. Subs. by Act 25 of 2014, s. 84, for ―section 28AB‖ (w.e.f. 6-8-2014).
2. Sub-section (1A) omitted by Act 20 of 2015, s. 86 (w.e.f. 14-5-2015).
3. Sub-section (2) omitted by Act 25 of 2014, s. 84 (w.e.f. 6-8-2014).
4. Ins. by Act 7 of 2017, s. 106 (w.e.f. 31-3-2017).
5. Subs. by Act 22 of 2007, s. 102, for section 127C (w.e.f. 1-6-2007).
6. Subs. by Act 25 of 2014, s. 78, for ―Commissioner of Customs‖ (w.e.f. 6-8-2014).
84
(4) Where a report of the Commissioner called for under sub-section (3) has been furnished within the
period specified in that sub-section, the Settlement Commission may, after examination of such report, if
it is of the opinion that any further enquiry or investigation in the matter is necessary, direct, for reasons
to be recorded in writing, the Commissioner (Investigation) within fifteen days of the receipt of the
report, to make or cause to be made such further enquiry or investigation and furnish a report within a
period of ninety days of the receipt of the communication from the Settlement Commission, on the
matters covered by the application and any other matter relating to the case:
Provided that where the Commissioner (Investigation) does not furnish the report within the aforesaid
period, the Settlement Commission shall proceed to pass an order under sub-section (5) without such
report.
(5) After examination of the records and the report of the 1
[Principal Commissioner of Customs or
Commissioner of Customs] received under sub-section (3), and the report, if any, of the Commissioner
(Investigation) of the Settlement Commission under sub-section (4), and after giving an opportunity to the
applicant and to the 1
[Principal Commissioner of Customs or 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 1
[Principal Commissioner of Customs or Commissioner of
Customs] and Commissioner (Investigation) under sub-section (3) or sub-section (4).
2
[(5A) The Settlement Commission may, at any time within three months from the date of passing of
the order under sub-section (5), 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 or the applicant:
Provided that no amendment which has the effect of enhancing the liability of the applicant shall be
made under this sub-section, unless the Settlement Commission has given notice of such intention to the
applicant and the jurisdictional Principal Commissioner of Customs or Commissioner of Customs as the
case may be, and has given them a reasonable opportunity of being heard.]
3
* * * * *
(7) 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 (5) and, in relation to the passing of such
order, the provisions of section 32D of the Central Excise Act, 1944 shall apply.
(8) The order passed under sub-section (5) shall provide for the terms of settlement including any
demand by way of duty, penalty or interest, the manner in which any sums due under the settlement shall
be paid and all other matters to make the settlement effective and in case of rejection contain the reasons
therefore and it 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:
Provided that the amount of settlement ordered by the Settlement Commission, shall not be less than
the duty liability admitted by the applicant under section 127B.
(9) Where any duty, interest, fine and penalty payable in pursuance of an order under sub-section (5)
is not paid by the applicant within thirty days of receipt of a copy of the order by him, the amount which
remains unpaid, shall be recovered along with interest due thereon, as the sums due to the Central
Government by the proper officer having jurisdiction over the applicant in accordance with the provisions
of section 142.
1. Subs. by Act 25 of 2014, s. 78, for ―Commissioner of Customs‖ (w.e.f. 6-8-2014).
2. Ins. by Act 7 of 2017, s. 107 (w.e.f. 31-3-2017).
3. Sub-section (6) omitted by Act 20 of 2015, s. 87 (w.e.f. 14-5-2015).
85
(10) Where a settlement becomes void as provided under sub-section (8), 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 the proper
officer having jurisdiction 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.—(1) 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.
(2) 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.] Omitted by the Finance
Act, 2015 (20 of 2015), s. 88 (w.e.f. 14-5-2015).
127F. Power and procedure of Settlement Commission.—(1) 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.
(2) 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 1
[(5)] of
section 127C, have, subject to the provisions of sub-section 2
[(4)] 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.
(3) 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.
(4) 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.
127 H. Power of Settlement Commission to grant immunity from prosecution and penalty.—(1)
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
1. Subs. by Act 22 of 2007, s. 104, for ―(7)‖ (w.e.f. 1-6-2007).
2. Subs. by s. 104, ibid., for ―(6)‖ (w.e.f. 1-6-2007).
86
may think fit to impose, immunity from prosecution for any offence under this Act 1
[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:
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.
2
* * * * *
(2) 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 3
[sub-section (5) of section 127C
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.
(3) 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.—(1)
The Settlement Commission may, if it is of opinion that any person who made an application for
settlement under section 127B 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 under section 127B had been made.
(2) 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.
(3) 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 4
[(5)] 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.
1. Subs. by Act 22 of 2007, s. 105, for ―or under the Indian Penal Code 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‖ (w.e.f. 1-6-2007).
2. The Explanation omitted by Act 20 of 2015, s. 89 (w.e.f. 14-5-2015).
3. Subs. by Act 22 of 2007, s. 105, for ―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‖ (w.e.f. 1-6-2007).
4. Subs. by s. 106, ibid., for ―(7)‖ (w.e.f. 1-6-2007).
87
127K. Recovery of sums due under order of settlement.—Any sum specified in an order of
settlement passed under sub-section 1
[(5)] 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.—2
[(1)] 3
[Where 4
***]
(i) an order of settlement 5
*** 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
6
[Explanation.—In this clause, the concealment of particulars of duty liability relates to any such
concealment made from the officer of customs.]
(ii) after the passing of an order of settlement 5
*** in relation to a case, such person is convicted
of any offence under this Act in relation to that case; or
(iii) 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.
7
* * * * *
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.]Omitted by the Finance Act, 2007 (22 of 2007), s. 109 (w.e.f.
1-6-2007).
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.]