Power of Settlement Commission to grant immunity from prosecution and penalty
Section 127H of the Customs Act, 1962 deals with power of Settlement Commission to grant immunity from prosecution and penalty. 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 suc The Act came into force on 01 Feb 1963.
(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 1 [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.
2* * * * * (2) An immunity granted to a person under sub-section (1) shall stand withdrawn if such person fails to pay any sum specified in the order of the settlement passed under 3[sub-section (5) of section 127C within the time specified in such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(3) An immunity granted to a person under sub-section (1) may, at any time, be withdrawn by the Settlement Commission, if it is satisfied that such person had, in the course of the settlement proceedings, concealed any particulars, material to the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.
Section 127H, The Customs Act, 1962 (Act 52 of 1962).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Referred to by 1
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Rexnord Electronics and Controls LTD vs Union of India
Court's Decision & Legal Precedent
The jurisdiction of the Settlement Commission under Section 127H of the Customs Act to grant immunity from interest is limited to interest payable under the provisions of the Customs Act itself. Interest payable under a contractual bond executed in terms of an exemption or duty notification, though issued under statutory authority, retains its contractual character and falls outside the Settlement Commission's powers of waiver or immunity. The Settlement Commission lacks the authority to grant immunity from such contractual obligations without the consent of both parties to the contract.
On this section: Empowers Settlement Commission to grant immunity from prosecution and penalties under the Act, but this power is limited to liabilities under the Customs Act itself, not contractual obligations
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… (c) under Section 127C of the Customs Act, 1962, respondent no.2 had the inherent authority or power to determine the terms of settlement covering not only the amount of duty but also interest and penalty; and (d) under Section 127H of the Customs Act, 1962, respondent no.2 has the power to grant immunity from prosecution and penalty subject to such conditions as it may think fit to impose. Such a power has been exercised by the Commission in imposing penalty and interest upon petitioner and, therefore, respondent no.2 cannot be faulted. Mr. …
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… must be made, at this stage, to the judgment of this Court reported in Alpesh Navinchandra's case (cited supra) which was again decided by the Division Bench consisting of Hon'ble Lakshman and Kabir, JJ., the judgment was, however, authored by Hon'ble Lakshmanan, J. This was the case of immunity granted under Sections 127H of the Customs Act, 1962, however, the appellant and his brother were preventively detained under COFEPOSA. The detention was challenged on the ground that once the immunity under Section 127H of the Customs Act was granted in respect of customs offences, after settling the taxes finally by the Settlement …
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… With respect to penalty, the Commission imposed separate penalties of Rs.7,00,000/ each on Saurashtra Cement as well on its two Directors. The Commission granted immunity from prosecution to all the applicants under sub-section (1) of section 127H of the Customs Act, 1962. The Commission in its operative portion of the order stated as under:- Customs Duty: The Customs duty in this case is settled at Rs.73,67,859/-. This amount stands paid. Interest: The Bench observes that consequently the rate of interest prescribed in Notification No.30/97-Cus dated …
Questions about Section 127H
What have the courts held on Section 127H of the Customs Act?
Rexnord Electronics and Controls LTD vs Union of India (04 Mar 2008) is the leading judgment on this section among those set out below: Empowers Settlement Commission to grant immunity from prosecution and penalties under the Act, but this power is limited to liabilities under the Customs Act itself, not contractual obligations.
How do I find court cases under Section 127H of the Customs Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Customs Act 1962 127H, section 127H Customs Act 1962, section 127H of the Customs Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with Rexnord Electronics and Controls LTD vs Union of India (04 Mar 2008).
What should I read with Section 127H of the Customs Act, and has it changed?
Its own text turns on section 127B (Application for settlement of cases), section 127C (Procedure on receipt of an application under section 127B), so none of them can safely be read on its own. 1 other provision in this corpus refers back to it.
When did Section 127H of the Customs Act come into force?
Section 127H of the Customs Act, cited as Customs Act 1962 127H, came into force on 01 Feb 1963, having been enacted on 13 Dec 1962. It is in force as at the date shown on this page.
Other sections of this Act
- 28. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded2145 words
- 2. Definitions1638 words
- 129A. Appeals to the Appellate Tribunal1170 words
- 27. Claim for refund of duty1060 words
- 127C. Procedure on receipt of an application under section 127B1056 words
- 138C. Admissibility of micro films, facsimile copies of documents and computer print outs as documents and as evidence872 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 18 Oct 2026. This page is not a substitute for legal advice.