Compounding Rules Allow Settlement of Customs and Excise Offences Through Payment; Certain Serious Offences Ineligible

The Customs (Compounding of Offences) Rules, 2005 and Central Excise Rules, 2005, effective from December 30, 2005, aim to reduce litigation by allowing certain offences to be settled through payment. Offences are categorized as technical or substantive, with technical offences eligible for repeated compounding, while substantive offences can be compounded only once. Certain serious offences and offenders involved in smuggling or previously compounded cases over one crore rupees are ineligible. The Chief Commissioners are authorized to decide on compounding applications, ensuring they align with guidelines. Public awareness of these rules is encouraged to reduce court cases. Applications must be resolved within six months.