Custom or Customs - What's in a name? Power of Settlement Commission to grant Immunity - Central Board of Excise and "Custom" Issues Instructions
IS it the Custom Department or the Customs Department? Many people who do not understand that things can be singular or plural use the phrase Custom Department, but can the Board do it? No organization that takes pride in its existence will ever get its own name wrong. In an instruction given yesterday, the Board calls itself the Central Board of Excise and Custom (not Customs). I may be very fussy about this minor spelling error, but sir, that is YOUR NAME!
Anyway the instruction says that as per sub-section 2 of Section 32K of the Central Excise Act, 1944 also made applicable to Service Tax matters and Customs, immunity granted to a person from prosecution, penalty and fine shall stand withdrawn if such person fails to pay any sums specified under order of settlement within the stipulated time.
In this regard, it has been brought to the notice of the Board that the conditions subject to which the immunity has been granted have not been complied with by the applicants in some cases, thereby rendering the order of settlement void.
Board wants field formations to closely monitor and ensure strict compliance with the conditions stipulated in the order of Settlement Commission. In cases of any violations, the jurisdictional Commissioner should initiate necessary action under the relevant law after bringing it to the notice of the Commission.
But the law is not that simple as is made out to be.
Section 32K(2) of the CEA, 1944 reads -
(2) An immunity granted to a person under sub-section (1) shall stand withdrawn if such person fails to pay any sum specified in the order of the settlement passed under [Sub-section (5) of section 32F within the time specified in such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.
The words "shall stand withdrawn" do not mean that the immunities leave the applicant's side merely because he fails to obey the order of the Settlement Commission on the basis of which these immunities were granted.
In his treatise, Settlement of Tax Liabilities, G.S.Sidhu, Former Chairman of Income Tax Settlement Commission has the following to say on the subject matter in the context of section 245H(1A) of the Income Tax Act -
"For withdrawing immunity under sub-section (1A), the Commission, following the principles of natural justice, should give the defaulting taxpayer an opportunity of being heard. While allowing further time to pay the tax liabilities, the Commission may impose any such conditions as it deems necessary to ensure payment as per revised schedule and secure the interest of Revenue."