True disclosure and bona fide accounting error justified settlement with immunity from penalty, interest, fine and prosecution.

True and full disclosure, payment of admitted duty, and evidence of bona fide accounting error supported settlement before the Settlement Commission with statutory immunities under Section 32K of the Central Excise Act, 1944. The applicants had identified stock discrepancies through internal verification, substantially reconciled them, and cooperated throughout the proceedings. On that basis, the Commission treated the disclosure as complete and accepted that there was no deliberate evasion, granting immunity from prosecution, penalty, fine and interest.

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Issues: Whether the applicants, having admitted and paid the entire duty liability arising from stock discrepancies recorded in their excise records, were entitled to settlement under Section 32K of the Central Excise Act, 1944 with immunity from interest, penalty, fine and prosecution.

Analysis: The applicants disclosed that the discrepancy arose from inadvertent errors in the computerized accounting system and that the shortages were identified and substantially reconciled by their own officers before the Revenue initiated investigation. The record showed detailed internal verification, partial reconciliation, voluntary payments during investigation, and full cooperation before the Settlement Commission. The admitted duty liability was paid in full, and the material placed before the Commission indicated absence of deliberate evasion. On that basis, the Commission accepted the disclosure as true and complete and treated the case as fit for settlement with the statutory immunities available under Section 32K.

Conclusion: The applicants were held entitled to settlement and were granted immunity from prosecution, penalty, fine and interest; no further duty liability remained.

Ratio Decidendi: Where the assessee makes a true and full disclosure, pays the admitted duty, and the record shows bona fide accounting error rather than deliberate evasion, the Settlement Commission may grant settlement and immunities under Section 32K of the Central Excise Act, 1944.

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