Settlement Commission can settle admitted duty liability, grant immunity from penalty and prosecution, and still direct interest payment.

In settlement proceedings under Section 32E of the Central Excise Act, admitted duty liability may be settled where the applicants make full and true disclosure and cooperate with the Commission; the dispute was confined to the admitted amount already paid, and no further duty was required. The Commission may also grant immunity from fine, penalty and prosecution on those facts, while still directing payment of interest where duty had been withheld; interest was therefore ordered to be calculated and paid within the time specified.

---

---

Issues: (i) whether the dispute could be settled on the basis of the admitted duty liability under the settlement scheme; (ii) whether immunity from fine, penalty and prosecution could be granted and interest could still be directed to be paid.

Issue (i): whether the dispute could be settled on the basis of the admitted duty liability under the settlement scheme.

Analysis: The application was filed under Section 32E of the Central Excise Act, and the record showed that the applicants had admitted the duty liability to the extent accepted by both sides. The Commission found that the case law relied upon by the applicants was not directly applicable, but the admitted liability was not in dispute. The settlement was therefore confined to the admitted amount already paid.

Conclusion: The duty dispute was settled at Rs. 13,27,896, with no further duty payment required.

Issue (ii): whether immunity from fine, penalty and prosecution could be granted and interest could still be directed to be paid.

Analysis: The Commission recorded co-operation and full and true disclosure by the applicants and granted relief from fine and penalty, along with immunity from prosecution. At the same time, it held that the applicants had avoided payment of duty and were therefore liable to interest; the interest was directed to be calculated and paid within the stipulated time, with waiver beyond the specified rate.

Conclusion: Immunity from fine, penalty and prosecution was granted, while interest remained payable in the manner directed by the Commission.

Final Conclusion: The settlement was allowed on the admitted duty liability, with consequential immunity from penal and prosecutorial consequences, but with a continuing obligation to discharge interest as ordered.

Ratio Decidendi: In settlement proceedings under Section 32E of the Central Excise Act, admitted duty liability may be settled where there is full and true disclosure and cooperation, and the Commission may simultaneously grant immunity from penalty and prosecution while directing payment of statutory interest where the liability so warrants.

---