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INDIA
BUSINESS WORLD -
OCTOBER 2005
THE MONTH THAT WAS
SETTLEMENT COMMISSION CAN LOOK INTO FRAUD CASES
The Bombay High
Court has ruled that the Settlement Commission, set up for
customs, central excise and income tax matters, can solve
all cases of dispute even those relating to fraud.
In a recent judgement,
which followed a writ petition filed by the customs department
against a businessman, the high court has reaffirmed the powers
of Settlement Commission to settle all revenue related disputes,
including issues arising from fraud.
The settlement
commission is an independent quasi judicial body, different
from the regular appellate forum of Income-tax or Customs
& excise departments. Its decisions are final and can
be challenged before the High Court through writ petition
or the Supreme Court. Settlement Commission can grant immunity
from prosecution, fine and penalty under the Customs Act or
any other laws including the Indian Penal Code.
The Settlement
Commission for Customs & excise and the settlement commission
for Income-tax are bodies that settle cases once and for all
within a short period of time and this route is most often
preferred to the regular route of other appellate forum that
may take even upto 15 years before reaching a finality. At
present, there are two settlement commissions, one for Customs
& Central Excise and the other for income-tax matters.
The court also
dismissed the customs department's stand that the commission
has no jurisdiction to admit cases of fraud. The Commission's
jurisdiction, according to customs, is limited to issues arising
only from misclassification of items, levy, assessment and
collection of duty, the customs department said.
The commission has no jurisdiction to admit cases involving
fraud, misdeclaration and suppression of facts, it added.
The division bench
comprising Justice S Radhakrishnan and Justice J H Bhatia,
held that the Settlement Commission has the jurisdiction to
entertain all kinds of applications for settlement, provided
they satisfy the mandatory requirement of filing bill of entry,
making full disclosure of duty liability which was not disclosed
before the concerned officer, issuance of show cause notice
and the additional duty acceptable to him etc.
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