CENTRAL EXCISE (COMPOUNDING OF OFFENCES) RULES, 2005

R.1 Short title and commencement. -

(i) These rules may be called the Central Excise (Compounding of Offences) Rules, 2005.
(ii) They shall come into force on the date of their publication in the Official Gazette.

R.2 Definitions.-

       In these rules , unless the context otherwise requires,
       (a) Act means the Central Excise Act, 1944 (1 of 1944);
       (b) applicant means any assessee or any other person, but shall not include officers of Central Excise as appointed by Board or Commissioner of Central Excise under Rule 3 of the Central Excise Rules 2002;
       (c) compounding authority means the Chief Commissioner of Central Excise, having jurisdiction over the place where the offence under the Central Excise Act, 1944, have been or alleged to have been committed;
       (d) form means the form appended to these rules;
       (e) reporting authority means, the Commissioner of Central Excise, having jurisdiction over the factory/place where the offences under the

R.3 Form and manner of application.

(1) An applicant may, either before or after institution of prosecution, make an application under sub-section 2 of section 9A in the form appended to these rules, to the Compounding authority to compound the offence:
Explanation.- Where an offence under the Act has been committed at more than one place falling under the jurisdiction of more than one compounding authority, then the Chief Commissioner of Central Excise having jurisdiction over such place where the value of goods seized, or the amount of duty evaded or attempted to be evaded is more than the others shall be the competent authority.

R.4 Procedure on receipt of application under rule 3 -

       (1) On receipt of an application under rule 3, the compounding authority shall call for a report from the reporting authority with reference to the particulars furnished in the application, or any other information, which may be considered relevant for examination of such application.
       (2) Such report shall be furnished by the reporting authority within a period of one month or within such extended period as may be allowed by the compounding authority, from the date of receipt of communication from the compounding authority.
       (3) The compounding authority, after taking into account the contents of the said application, may, by order, either allow the application indicating the compounding amount in terms of rule 5 and grant him immunity from prosecution in terms of rule 6 or reject such application:
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R.5 Fixation of the Compounding amount.-

       For the purpose of compounding of offences under the provisions of the Act, the compounding amount shall be as provided in the following Table, namely:-
       Sl.No. Offence Compounding amount
       (1) (2) (3)
       1. Offence specified under section 9(1)(a) of the Act Rupees fifty thousand for the first offence and to be increased by hundred per cent of this amount for each subsequent offence.
       2. Offence specified under section 9(1)(b) of the Act Up to fifty per cent of the amount of duty evasion, subject to minimum of ten percent of duty evasion.
       3. Offence specified under section 9(1)(bb) of the Act Upto fifty per cent of the amount of duty evasion, subject to minimum of ten percent of duty evasion.
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R.6 Power of Compounding authority to grant immunity from prosecution. -

The compounding authority, if he is satisfied that any person who has made the application for compounding of offence under these rules has co-operated in the proceedings before him and has made full and true disclosure of facts relating to the case, grant to such person, subject to such conditions as he may think fit to impose, immunity from prosecution for any offence under the Central Excise Act, 1944 with respect to the case covered by the compounding of offence.

R.7 Withdrawal of Immunity from Prosecution in certain conditions. -

(1) An immunity granted to a person under rule 6 shall stand withdrawn if such person fails to pay any sum specified in the order of compounding passed by the compounding authority, under sub-rule (3) of rule 4 within the time specified in such order or fails to comply with any other condition subject to which the immunity was granted and thereupon the provisions of the Central Excise Act, 1944 shall apply as if no such immunity had been granted.
(2) An immunity granted to a person under sub rule (1) above may, at any time, be withdrawn by the Compounding authority, if he is satisfied that such person had, in the course of the compounding proceedings, concealed any particulars, material or had given false evidence, and thereupon such person may be tried for the offence with respect to which immunity was granted or for any other offence that appears to have been committed by him in

FORM.1 .

       FORM
       (see rule 3)
       Application for Compounding of Offence
       1. Full Name and address of the applicant:
       2. Address for communication:
       3. (i) Permanent Account Number (PAN):
       (ii) Registration No:
       4. Commissioner of Central Excise having jurisdiction over the applicant:
       5. The violation of provisions of Central Excise Act, 1944, against which prosecution is instituted or contemplated for which application of Compounding:
       6. Details of invoices/Adjudication order in relation to the case for compounding: