Full and true disclosure before settlement can secure prosecution immunity, while reduced penalties may still survive.

Full and true disclosure before the Settlement Commission, together with cooperation and payment of the admitted duty liability, satisfied the statutory conditions for immunity from prosecution, and such immunity was granted. However, the Commission did not accept complete waiver of penal consequences and held that reduced penalties could still be sustained as part of the settlement. The outcome was prosecution immunity with partial relief from penalty and interest-related consequences, while lesser penalties remained imposed on the applicants.

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Issues: (i) whether the applicants were entitled to immunity from prosecution on the basis of full and true disclosure and cooperation before the Settlement Commission; (ii) whether penalty and interest were liable to be waived in full, or whether a part of the penalty could still be imposed in settlement.

Issue (i): whether the applicants were entitled to immunity from prosecution on the basis of full and true disclosure and cooperation before the Settlement Commission.

Analysis: The applicants disclosed the entire duty liability before the Commission and had substantially discharged the demand prior to settlement, with the balance also paid in compliance with the interim directions. On that basis, the Commission recorded that the statutory conditions of cooperation and full and true disclosure were satisfied for grant of relief in settlement.

Conclusion: Immunity from prosecution was granted to the applicants.

Issue (ii): whether penalty and interest were liable to be waived in full, or whether a part of the penalty could still be imposed in settlement.

Analysis: Although the duty liability stood admitted and paid, the Commission did not accept full waiver of penal consequences. It held that some penal liability survived and, while granting relief in excess of the specified amounts, it sustained a reduced penalty on the company and on the co-noticee. The order also granted waiver of the balance penalty beyond the amounts imposed.

Conclusion: Partial waiver was allowed, but reduced penalties were sustained.

Final Conclusion: The settlement application was disposed of by granting prosecution immunity and partial relief from penal consequences, while sustaining reduced penalties against the applicants.

Ratio Decidendi: Where an applicant before the Settlement Commission makes a full and true disclosure of duty liability and cooperates in the proceedings, immunity from prosecution may be granted, but the Commission may still impose reduced penalty as part of the settlement terms.

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