Settlement order merger principle protects an unchallenged final customs order from being quashed independently.

An admission order in customs settlement proceedings does not survive independently once a final order under Section 127D has been passed, because the admission order merges into the final order. Since the final order remained unchallenged, it continued to operate and the earlier admission order could not be quashed in isolation. The Court also accepted that transfer of the settlement application to the Mumbai Bench was not illegal, as the import transactions, show cause notices, and related business activity had sufficient nexus with Mumbai and the Principal Bench had jurisdiction to transfer the matter. The writ petition was therefore unsuccessful.

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Issues: Whether the admission order passed by the Settlement Commission under Section 127C of the Customs Act, 1962 was liable to be quashed after the final order under Section 127D of the Customs Act, 1962 had already been passed and not challenged, and whether the prior transfer of the settlement application to the Mumbai Bench was illegal.

Analysis: The settlement application was transferred on the footing that the import transactions, show cause notices, and connected business activity had a sufficient nexus with Mumbai, and the Principal Bench had jurisdiction to transfer the matter to the Additional Bench. On merits, the admission order recorded satisfaction that the applicant had made the requisite full and true disclosure and fulfilled the conditions for admission under Section 127B and Section 127C of the Customs Act, 1962. The later final order under Section 127D of the Customs Act, 1962 had already been passed and had not been challenged, so it continued to remain operative. The Court held that there is no concept of automatic extinction of the final order merely because the admission order is attacked, and once the final order is passed, the admission order merges into it.

Conclusion: The admission order was not liable to be interfered with, the transfer of the matter to the Mumbai Bench was not illegal, and the writ petition failed.

Final Conclusion: The settlement proceedings were left undisturbed because the unchallenged final order remained effective, and the challenge to the earlier admission order could not succeed independently.

Ratio Decidendi: An admission order in settlement proceedings merges into the final order under Section 127D of the Customs Act, 1962, and an unchallenged final order continues to operate until set aside by a competent forum; therefore, the earlier admission order cannot be quashed in isolation.

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