Customs Circular
No.29/2007-Cus dated 21.8.2007
Guidelines for compounding of offences under Customs (Compounding of Offences)
Rules, 2005-regarding
The undersigned is directed to refer to Customs (Compounding of Offences) Rules,
2005 and guidelines issued for compounding of offences vide Circular 54/2005-Cus
dated 30.11.2005.
2. The field formations have sought clarifications in respect of following
issues in administering Customs (Compounding of Offences) Rules, 2005 ,-
(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 “Upto twenty percent of market value of the
goods or Rupees ten lakhs whichever is higher” mentioned in Rule 5 of the said
Rules.
3. The issue has been examined. As per Rule 6 of the Customs (Compounding of
Offences) Rules, 2005, any person who has made the application for compounding
of offence and has made full and true disclosure of facts relating to the case,
is given immunity from prosecution for any offence under the Customs Act, 1962
with respect to the case covered by the compounding of offence. The compounding
authority grant such immunity based on the guidelines issued for compounding
vide Circular No. 54/2005-Cus dated 30.11.2005. 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.
4. As regards the usage of phrase ‘Upto twenty percent of market value of the
goods or Rupees ten lakhs whichever is higher’ in Rule 5 of the Customs
(Compounding of Offences) Rules, 2005, it is stated that the use of word “upto”
indicates that 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.
5. Above clarifications may be brought to the notice of all concerned. In case
of any doubt, reference may be made to the Board. The guidelines shall be
implemented with immediate effect.
F.No.450/ 67/ 2003-Cus.IV(Anupam Prakash)
Under Secretary to the Government of India
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