Circular No.20/2008-Customs dated
2.12.2008
Guidelines for compounding of offences under Customs (Compounding of Offences)
Rules, 2005 - regarding.
Please refer to notification No.118/2008-Customs (N.T)
dated 12.11.2008 whereby certain amendments have been carried out in the Customs
(Compounding of Offences) Rules, 2005. Further, considering the recommendations
made by the Committee on Subordinate Legislation (Rajya Sabha) and to make a
meaningful impact on the Scheme of Compounding of Offences, the following
changes have been made in the scheme of Customs (Compounding of Offences) Rules,
2005 and the guidelines issued in this regard.
2. The compounding amount prescribed under Rule 5 of the
said Rules has been revised downwards. A new proviso has been inserted in this
rule, which provides that if a person has, in respect of same goods, committed
offences falling under more than one category, i.e., Sl.No.1 to 8 of the table
specified in this rule 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. Further, in rule 4, a new provision has been added,
whereby it has been provided that an applicant should pay duty, penalty, and
interest before submission of application for compounding. 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.
4.1. In view of the recommendations of the Committee,
for early disposal of the applications for compounding, the Board directs that
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. In order to
ensure such time bound disposal, it is reiterated that the existing instructions
regarding time limit for launching prosecution should be followed. 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. Further, cases of prosecution shall be
pursued seriously with the respective Government Counsels and the Courts.
4.2. 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 (i.e. 1 month).
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 (1 month). After taking
into account the contents of the application and the concerned reports of the
Reporting Authority and submissions (written or oral) made by applicant, the
Compounding Authority may be able to dispose of the case within one month of the
date of personal hearing or obtaining a report whichever is later (1 month). 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 as provided in para
7 of the guidelines issued in this regard.
5. 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. Accordingly, in the guidelines
issued for compounding of offences under Customs and Central Excise Acts vide
Circular No.54/2005-Cus dated 30.12.2005, the following additional guidelines
shall be added:
“3(v): Any person who has applied for compounding of offence
in a case, where there are apparent contradictions or inconsistencies or
incompleteness.”
6. Adequate publicity may be given about reduction of
compounding amount, in order to make the scheme more popular as to reduce the
cases pending in the Court. Further, in order to make best use of compounding of
offence scheme, all persons against whom prosecution is initiated or
contemplated, should be informed separately in writing, the offer of
compounding. Guidelines issued vide Circular No.54/2005-Cus dated 30.12.2005
shall continue to apply, subject to the amendments made vide Notification
No.118/2008-Customs (NT) dated 12.11.2008 and the changes mentioned in para 5
above.
7. The field formations as well as trade and industry
may be suitably informed.
8. Hindi version will follow.
Yours faithfully,
(M.M. Parthiban)
Director (Customs)
F.No. 450/67/2003-Cus.IV (Pt)