Full and true disclosure required for settlement; partial settlement of pending duty demand was held inadmissible.

A settlement application under the Central Excise Act was held inadmissible where the applicant sought settlement only of part of the pending duty demand while continuing to contest the balance before the adjudicating authority. The Commission found that selective settlement of five notices, with one notice left to be litigated, did not satisfy the statutory scheme for settlement of the pending proceedings. It also found that the disclosure was not full and true because the total duty liability was understated and the applicant did not accept the re-determination of furnace capacity and the consequential liability. As the statutory precondition for admission was not met, the application was rejected.

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Issues: Whether the settlement application was maintainable and admissible when the applicant sought settlement only of part of the pending duty demand while contesting the balance, and whether the disclosure made constituted full and true disclosure for admission of the application.

Analysis: The application related to de novo proceedings arising from six show cause notices and an adjudication order confirming the total demand. The applicant sought settlement only of five notices and intended to contest the sixth notice before the adjudicating authority. Such selective settlement of part of the pending proceedings did not satisfy the scheme of settlement under Chapter V of the Central Excise Act, 1944. The application also understated the total duty involved, and the duty liability remained unsettled because the applicant did not accept the re-determination of furnace capacity and the consequential liability. In these circumstances, the Commission could not form a prima facie view that there had been a full and true disclosure, which is a statutory precondition for admission.

Conclusion: The settlement application was not admissible and was rejected.

Ratio Decidendi: A settlement application under the Central Excise Act, 1944 is not maintainable where the applicant seeks settlement of only a part of the pending demand while disputing the rest, and admission is barred unless there is a full and true disclosure enabling prima facie satisfaction on the statutory precondition.

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