Compounding of offences – CBEC clarifies
Regarding the compounding of offences, the field has two doubts which the Board is clarifying.
i) Where in a single case where there are several persons liable for prosecution, whether compounding can be allowed to few applicants who are applying under the Customs (Compounding of Offences) Rules, 2005.
ii) Clarification of the phrase “Up to twenty percent of market value of the goods or Rupees ten lakhs whichever is higher” mentioned in Rule 5 of the said Rules.
Board's answers:
i) Since the filing of application under compounding rules is the individual option of the person to avoid prosecution, other persons involved in the case/ offence and who have not filed the application would not be given immunity from prosecution. In such situation, remaining persons would face regular proceedings of the department for adjudication/ prosecution/ appeal. (Recently the Tribunal observed, if an accused has been acquitted of murder, co-accused cannot be held guilty of conspiracy to murder)
ii) the Compounding Authority, after taking into account the contents of his application, may prescribe the compounding amount which may be Rs. Ten lacs or any amount upto 20% of the market value of goods, whichever is higher. Thus wherever 20% of the market value of the goods is higher than Rs. 10 lacs, the compounding authority may prescribe the compounding amount anywhere between 10 lacs to 20 % of the market value of the goods. The determination of compounding amount would, interalia, take into account the gravity of offence and the degree of involvement of the applicant.
For detailed stories on the Compounding scheme, see our stories,
1. MoF notifies Compounding of Offences Rules for Customs & Excise; A lot of discretion given to Chief Commissioners )
2. Compounding of offences - A curse in disguise?
3. Compounding of offences - the first case reaches HC - DRI alleges denial of natural justice against Chief Commissioner - Revenue writ dismissed
CIRCULAR NO. , Dated: August 21, 2007