Full disclosure and filing of statutory returns are mandatory for excise settlement applications to be maintainable.

A settlement application under the excise scheme requires full and true disclosure of the undisclosed duty liability and a clear explanation of how the additional duty is derived; a vague application that disputes manufacture while seeking conditional payment does not meet that standard. Filing of statutory returns is also a mandatory condition for maintainability, and private records cannot replace that requirement. Where these statutory prerequisites are not satisfied, the application is not entertainable under the settlement mechanism.

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Issues: (i) whether the application for settlement satisfied the requirement of full and true disclosure of duty liability and the manner in which the additional duty was derived; (ii) whether non-filing of statutory returns could be ignored for entertaining the settlement application.

Issue (i): Whether the application for settlement satisfied the requirement of full and true disclosure of duty liability and the manner in which the additional duty was derived.

Analysis: The settlement scheme requires the applicant to make a complete disclosure of the duty liability not earlier disclosed to the jurisdictional Central Excise officer and to explain the manner in which such additional duty arises. The application did not set out the modus operandi or the basis of computation in the required manner. Instead, the applicant continued to dispute that the activity amounted to manufacture, while simultaneously seeking permission to deposit the balance amount only if manufacture was held to exist.

Conclusion: The requirement of full and true disclosure was not satisfied, and this issue was decided against the applicant.

Issue (ii): Whether non-filing of statutory returns could be ignored for entertaining the settlement application.

Analysis: The proviso to the settlement provision makes filing of returns a categorical condition for maintainability. The condition was treated as mandatory, and no liberal construction was accepted to substitute maintenance of private documents for statutory returns.

Conclusion: The failure to file returns rendered the application not entertainable, and this issue was decided against the applicant.

Final Conclusion: The settlement application did not satisfy the statutory conditions for admission and was therefore not maintainable.

Ratio Decidendi: A settlement application under the excise settlement scheme is maintainable only when the applicant makes a full and true disclosure of duty liability and also satisfies mandatory statutory preconditions, including filing of returns where prescribed.

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