Customs Act, 1962 › Chapter XIVA — Settlement of Cases

Section 127H. Power of Settlement Commission to grant immunity from prosecution and penalty

Customs Act, 1962

Bare Act

Power of Settlement Commission to grant immunity from prosecution and penalty. —

(1) The Settlement Commission may, if it is satisfied that any person who made the application for settlement under section 127B has co-operated with the Settlement Commission in the proceedings before it and has made a full and true disclosure of his duty liability, grant to such person, subject to such conditions as it may think fit to impose, immunity from prosecution for any offence under this Act and also either wholly or in part from the imposition of any penalty and fine under this Act, with respect to the case covered by the settlement:

Provided that no such immunity shall be granted by the Settlement Commission in cases where the proceedings for the prosecution for any such offence have been instituted before the date of receipt of the application under section 127B.

[Omitted]

(2) An immunity granted to a person under sub-section (1) shall stand withdrawn if such person fails to pay any sum specified in the order of the settlement passed under sub-section (5) of section 127C within the time specified in such order or fails to comply with any other condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted.

(3) An immunity granted to a person under sub-section (1) may, at any time, be withdrawn by the Settlement Commission, if it is satisfied that such person had, in the course of the settlement proceedings, concealed any particulars, material to the settlement or had given false evidence, and thereupon such person may be tried for the offence with respect to which the immunity was granted or for any other offence of which he appears to have been guilty in connection with the settlement and shall also become liable to the imposition of any penalty under this Act to which such person would have been liable, had no such immunity been granted.

(4) On and from the 1st day of April, 2025, the power of the Settlement Commission under this section shall be exercised by the Interim Board and the provisions of this section shall mutatis mutandis apply to the Interim Board as they apply to the Settlement Commission.

Judgments on Section 127H

  • Union Of India (Uoi) Through The… vs Hoganas India Ltd. And Ors. [Alongwith… — Bombay High Court, 21 Jul 2005. The Settlement Commission under Chapter XIV-A has a very wide jurisdiction to entertain all kinds of settlement applications under Section 127B — including cases involving fraud or mis-declaration — provided the…
  • Imran Humayun Chandiwala vs State Of Maharashtra Motor Vehicles… — Bombay High Court, 2 Dec 2025. Where an innocent purchaser of a fraudulently imported vehicle pays the customs duty, interest and redemption fine settled by the Settlement Commission and holds Section 127H immunity, the vehicle's registration cannot…
  • Kundan Care Products Ltd vs Commissioner Of Customs-New Delhi Acc… — CESTAT, 31 Jul 2024. A penalty imposed under section 112 of the Customs Act for 'contravention' of statutory provisions is not a penalization for an 'offence', since offences and penalties are distinct categories; therefore, a licensee who…
  • Acer India Pvt Limited vs Cc Sea Ch - Ii — CESTAT, 25 Sep 2023. Where the importer is eligible to avail credit of the duties paid so that the case is revenue-neutral, interest, confiscation, redemption fine and penalty cannot be sustained even though the confirmation of duty itself…
  • Yamal Manojbhai vs Union Of India — Supreme Court of India, 4 May 2023. Watches being goods to which Section 123 applies, the proviso to Section 127B bars recourse to the Settlement Commission for cases involving their illicit importation, though here the Bench's divergence of opinion led…
  • Honeycom Synergies vs Commissioner Of Customs (Export) & Ors. — Delhi High Court, 19 Nov 2019. Co-operation with the Settlement Commission does not, ipso facto, insulate an applicant from penalty, though non-cooperation does disentitle an applicant thereto — immunity under Section 127H(1) is discretionary and may…
  • Commissioner Of Central Excise And Customs, Cochin Who Is The Third vs M/S.asianet Satellite Communications Limited — Madras High Court, 23 Feb 2011. A Settlement Commission's order passed on a full and true disclosure can be set aside only if it is contrary to the provisions of the Act and that contravention has prejudiced the party, since judicial review examines…
  • Rexnord Electronics And Controls Ltd vs Union Of India And Others — Supreme Court of India, 4 Mar 2008. The Settlement Commission's power under Section 127H to grant immunity from interest relates only to interest payable under the Customs Act (such as under Section 28AA) and does not extend to interest payable under a…
  • Alpesh Navinchandra Shah vs State Of Maharashtra & Ors — Supreme Court of India, 26 Feb 2007. The purpose of passing a detention order is to prevent the detenu from continuing his prejudicial activity but not to punish him, so where the case has been fully settled before the Settlement Commission with duty paid…
  • The Commissioner Of Customs vs A. Mahesh Raj — Karnataka High Court, 6 Jan 2006. Chapter XIV-A settlement provisions must be strictly construed — the Settlement Commission has no jurisdiction over cases of deliberate mis-declaration or smuggling, and the third proviso to Section 127B expressly bars…
  • Tata Teleservices (Maharashtra) Ltd. vs Union Of India (Uoi) — Bombay High Court, 21 Jul 2005. The Settlement Commission under Chapter XIV-A can entertain all kinds of settlement applications — including those involving fraud or mis-declaration — provided the mandatory conditions of Section 127B(1) are met (bill…
  • Commr. Of Cus. (Port) vs Settlement Commission, Cus. And C. Ex. — Calcutta High Court, 23 Aug 2004. The Settlement Commission's power under Section 127H of the Customs Act, 1962 to waive interest extends only to interest chargeable under the Act, and cannot be exercised to waive interest payable under a statutory…
  • Sony India Pvt. Ltd vs The Union Of India , Through The… — Bombay High Court, 12 Jan 2018. Once a Settlement Commission's final order settles a case, everything payable, including duty and interest, is subsumed in that order, and the Revenue cannot thereafter demand fresh interest on differential duty without…
  • Subhash Popatlal Dave vs Union Of India & Anr — Supreme Court of India, 16 Jul 2013. A COFEPOSA detention order can be challenged at the pre-execution stage only on the five limited Alka Subhash Gadia grounds (wrong statute, wrong person, wrong purpose, vague/extraneous/irrelevant grounds, or…
  • M.Natarajan vs State Rep.By — Madras High Court, 26 Jul 2010. As per Yashpal v. State of Punjab, in a conspiracy 'there must be unity of object or purpose but there may be plurality of means sometimes even unknown to one another, amongst the conspirators', so every collaborator is…
  • M. Natarajan vs State By Inspector Of Police, Spe, Cbi, Acb Chennai — Supreme Court of India, 7 May 2008. Immunity under the Kar Vivad Samadhan Scheme, 1998 is confined to offences under the direct and indirect tax enactments defined in ss.87(h) and 87(j) — including the Customs Act, 1962 — and cannot be stretched to cover…