Central excise is different from state excise. The former deals with levy and collection of duty on goods produced or manufactured in India, whereas the later deals with duty on liquor, narcotic substances etc. Entry 84 in List 1 - Union List of the seventh schedule to the Constitution of India, is the authority for levy and collection of such duty. The central excise act, 1944, and the rules framed thereunder provide for levy and collection of duty of central excise and the procedures governing such levy and collection.

Any dispute on levy and collection of duty of central excise and procedures governing thereof can be resolved following the principles of natural justice in a quasi judicial manner. any person aggrieved by any order of the central excise officer can approach the appellate machinery which can be either the commissioner of central excise (appeals), customs, excise and service tax appellate tribunal (cestat), high court or as the case may be the supreme court, as provided in chapter via of the central excise act, 1944.

On the basis of existing statistical data, it is observed that the average time varies from one authority to the other. For adjudication of a case by the central excise officer, the average time may be one year, whereas for the commissioner (appeals), it may take one to two years. In the case of cestat, the average time is about five to seven years.

In the year 1998 the central excise act, 1944 was amended by the finance act, 1998 inserting new chapter v, which provides settlement of all types of dispute without following the aforesaid appellate procedures. In other words this is an alternate remedy to the appellate procedure for resolving any dispute expeditiously.

Settlement commissioner was constituted under section 32 of the central excise act, 1944. Notification no. 40/99-cx. (nt), dated 09.06.1999, was issued notifying the establishment of settlement commission. The various provisions of sections in chapter v provide details of the functioning of the settlement commission.

The settlement commission provides quick and easy settlement of tax disputes of high revenue stake. This will save time and energy of both the litigant and the department adding to the proverb ÔÇÿtime saved is money savedÔÇÖ.

Section 32E of the central excise act, 1944, provides categories of persons who can file an application before the settlement commission. Such categories of persons were entitled to file an application before the settlement commission and called ÔÇ£applicantÔÇØ. Thus, the applicant is an assessee who can make an application in the prescribed form to the settlement commission, containing a full and true disclosure of his duty liability which has not been disclosed before the central excise officer. The applicant has to accept the additional amount of central excise duty payable by him and such liability should be not less than `3 lakh in a particular case.

Any person other than an assessee, may also make an application to the settlement commission in respect of a show cause notice issued to him in a case relating to the assessee which has been settled or is pending before the settlement commission and such notice is pending before an adjudicating authority, in such manner and subject to such conditions, as may be prescribed.

The following categories of cases cannot be taken up for settlement before the settlement commission:-

I) if the applicant has not filed any monthly return showing production, clearance and central excise duty paid in the prescribed manner. It does not necessarily imply that such monthly return should be in relation to all excisable goods produced or cleared by such applicant.

Ii) where the applicant has not received any show cause notice.

Iii) where the case of the applicant is pending with tribunal or any court;

Iv) where the dispute relates to interpretation of classification of excisable goods under the central excise traiff.

On receipt of application, the settlement commission will see whether it is a fit case for being admitted for settlement. Once the application is admitted, hearing is given for final disposal of the case after conducting investigation by the officers of the settlement commission if it is so necessary.

The settlement commission if it is satisfied about bonafide conduct of the applicant can grant immunity from prosecution or imposition of penalty, fine, either in whole or in part. Such immunity is not only under the central excise act but also under any other central act for the time being in force.

Settlement of a case should be within nine months from the last day of the month in which the application was made. For reasons to be recorded in writing, by the settlement commission, the period can be extended by a further period of three months.

The dispute before the settlement commission is much less costly and beneficial to the applicant compared to the normal appeal procedure which is not only time consuming but also expensive.

Any proceedings before the settlement commission shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purposes of section 196 of the indian penal code.

The order of the settlement commission is conclusive with the matters settled therein. The matter covered in the settlement commissionÔÇÖs order cannot be re-opened in any proceedings under Act or under any other law for the time being in force.