The Ministry of Finance, through a notification dated July 31, 2025, has amended the Customs and Central Excise Settlement Commission (Recruitment and Conditions of Service of Chairman, Vice-Chairmen and Members) Rules, 2015. The amendment introduces a significant new proviso that allows for the premature termination of the tenure of existing Chairmen, Vice-Chairmen, and Members of the Commission.
According to G.S.R. 516(E), the amended rules shall be deemed to have come into force from April 1, 2025. The inserted provision under Rule 7 specifies that:
"Any person appointed as Chairman, Vice-Chairman or Member holding office as such immediately before the date to be notified by the Central Government in this behalf, shall on and from such date, cease to hold such office, and they shall be entitled to claim compensation not exceeding three months' pay and allowances for the premature termination of their term."
This change effectively gives the Central Government the authority to terminate the tenure of existing office bearers of the Settlement Commission, with a cap on the compensation payable.
The Customs and Central Excise Settlement Commission, established to provide an alternative dispute resolution mechanism in indirect tax matters, is a quasi-judicial body under the Department of Revenue. The newly introduced amendment signals a possible restructuring or reconstitution of the Commission and its functioning in line with evolving policy goals or administrative reforms.
This is the first amendment since 2016 to the recruitment and service conditions of the top-level functionaries of the Commission, and it may have implications for administrative continuity and pending proceedings under the Commission's jurisdiction.
The notification, issued by Balasubramanian Krishnamurthy, Joint Secretary to the Government of India, is part of the government's broader efforts to strengthen and streamline quasi-judicial institutions under the Ministry of Finance.
Official copy of the notification has been attached
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