Unauthorized publication of export-import data becomes compoundable offense

There the Central Board of Indirect Taxes and Customs (CBIC) has announced 1

lakh fine for the first offense under section 135AA of the Customs Act. This section prohibits unauthorized publication of import-export data. The department has included offenses under the section in the Customs (Compounding of Offenses) Amendment Rules, 2022. For each subsequent offences, the penalty can be increased to 100%.

Finance Minister during the Union Budget 2022-23 Nirmala Sitharaman Section 135AA inserted to protect import and export data submitted to customs by importers or exporters by publishing such information in their declarations, unless otherwise provided by law, as an offense under the Customs Act.

In the budget, it was highlighted that, in section 135AA, a person shall be punished with imprisonment of either description for a term which may extend to six months or with fine which may extend to six months. 50,000 for unauthorized publication of export and import data. A person may also face both punishments depending on the circumstances.

According to the Customs Act, section 135AA reads as “If any person publishes any information relating to the value or classification or quantity of goods entered into for export from, or imported into, India, or such goods under this Act, unless any law for the time being in force so requires, with imprisonment for a term which may extend to six months, or with fine which may, shall be punished with imprisonment of either description for a term which may extend to fifty thousand rupees, or with both.

In its notification dated August 22, the CBIC amended the customs rules for compounding offences. These rules were called the Customs (Compounding of Offenses) Amendment Rules, 2022.

Under the amended rule, the CBIC said, the entries would be made – offenses specified under section 135AA of the Act.

Under section 135AA, the CBIC said, “one lakh rupees for the first offence, for each subsequent offence, hundred per cent of this amount shall be increased.”

“Provided that if the offense is punishable only under section 135AA, exemption from prosecution shall be granted,” the CBIC said.

On the following amendment, KPMG in India Partner Indirect Tax Abhishek Jain said the concept of compounding allows an assessee to avoid prosecution in case of specified instances of non-compliance, subject to payment of applicable compounding fee, as per PTI.

Jain said these changes seem to have been made in an attempt to prevent unnecessary litigation, which is the principle behind the inclusion of compounding provisions in the law.

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