The Finance Act 2012 had introduced the provisions to settlement of cases to help easy resolving of disputes.
To make the settlement commission provisions which are applicable to service tax, Section 83 of Finance Act 1994 has been amended. The provisions were made in line with similar provisions contained in Section 31, 32, 32A to 32P of Central Excise Act, 1994.
For the provisions of power for making rules to provide settlement of cases in accordance with sections (31, 32 and 32A to 32 P) of Central Excise Act 1994, Section 94 of Finance Act 1994 has been amended.
The explanation was given behind for settlement provision by CBEC in it's clarification letter no 334/1/2012-TRU. In the letter it was mentioned that quick settlement of disputes and saving the business from prosecution in certain situation is the main objective of these provisions. It will the time and energy of the department and litigants. Following are the benefits of this commission-