Compounding of offences: administrative settlement allowed subject to offence classification, exclusions, and Chief Commissioner discretion.

Compounding allows settlement of specified Customs and Central Excise offences by payment, with offences classified as technical (compoundable more than once) and substantive/non-technical (usually compoundable only once). Exclusions bar compounding where the accused faces offences under certain serious statutes, where smuggled goods are sensitive (including SCOMET or prohibited items), where prior high-value compounding occurred, or where convictions post-notification exist. Chief Commissioners exercise discretion to compound before or after complaint filing, with procedural requirements for pending court prosecutions, verification of applications, and a six-month disposal target.

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