Guidelines for compounding of offences under Customs
Recently by Notification No. No. dated 12.11.2008, certain amendments have been carried out in the Customs (Compounding of Offences) Rules, 2005. [please see 20.11.2008]
Now the Board has issued guidelines and explanations to the amendments.
1. The compounding amount has been revised downwards.
2. If a person has, in respect of same goods, committed offences falling under more than one category, and where amount of duty evasion or amount of drawback or exemption from duty, or amount of market value of the goods is same for all such offences, then the compounding amount, in such cases, shall be the amount determined for the offence for which a higher compounding amount has been prescribed.
3. An applicant should pay duty, penalty, and interest before submission of application for compounding.
4. Correspondingly, the Application Form has also been amended by inserting Sl.No.12A so as to ensure that the compounding of offences shall not be allowed unless the aforesaid duty, penalty and interest thereon are paid by the applicant.
5. Normally the application for compounding of offences may be disposed of within a period of 3 months from the date of receipt of such application.
6. In order to ensure such time bound disposal, it is reiterated that the existing instructions regarding time limit for launching prosecution should be followed.
7. In straight cases, where the importer/exporter is caught red handed, prosecution may be launched immediately after seizure of the goods. In other cases, the process of deciding about launching of prosecution or otherwise shall be completed within a month of adjudication of the case.
8. Cases of prosecution shall be pursued seriously with the respective Government Counsels and the Courts.
9. The Compounding Authority shall invariably obtain a factual report from the Reporting Authority within one month of receipt of the application for compounding, except in deserving cases, where request for extension of the period have been sought for justifiable reasons.
10. Where an opportunity of personal hearing requires to be given to the applicant before passing of an order, the same shall be offered within one month's time of date of receipt of report from the Reporting Authority.
11. In any case, even if there are certain difficulties in timely submission of report or conducting timely personal hearings, the Compounding Authority shall dispose of the application within an overall time limit of 6 months.
Further, it was decided by the Board that compounding of offences should not be allowed where there are demonstrable contradictions, inconsistencies or incompleteness in the case.
Now what do these words mean? Who will demonstrate the contradictions and who will decide as to what the inconsistencies or incompleteness are.
Board wants adequate publicity to be given about reduction of compounding amount, in order to make the scheme more popular as to reduce the cases pending in the Court. All persons against whom prosecution is initiated or contemplated, should be informed separately in writing, the offer of compounding.
Also see - 02.01.2006 and - 23.08.2007 for more details on the Scheme.
CBEC Circular NO. 20/2008-Customs Dated: 2nd December, 2008