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There Central Board of Indirect Taxes and Customs (CBIC) has announced ₹1 lakh penalty for the first offence under section 135AA of the Customs Act. The section prohibits unauthorised publication of import-export data. The department has inserted offences under the section in the Customs (Compounding of Offences) Amendment Rules, 2022. The penalty can be increased by 100% for each subsequent offences ahead.
During the Union Budget 2022-23, Finance Minister Nirmala Sitharaman inserted section 135AA to protect the import and export data submitted to Customs by importers or exporters in their declarations by making the publishing of such information unless provided by the law, as an offence under Customs Act.
In the Budget, it was highlighted that, in section 135AA, an individual will be punished with six months imprisonment or with a fine that can be extended to ₹50,000 for unauthorised publication of export and import data. An individual can also face both punishments depending upon the circumstances.
As per the Customs Act, the section 135AA reads as "if a person publishes any information relating to the value or classification or quantity of goods entered for export from India, or import into India, or the details of the exporter or importer of such goods under this Act, unless required so to do under any law for the time being in force, he shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to fifty thousand rupees, or with both."
In its notification dated August 22, CBIC amended the customs rules for compounding offences. These rules were called as Customs (Compounding of Offences) Amendment Rules, 2022.
Under the amended rule, CBIC said, entries shall be inserted namely -- offences specified under Section 135AA of the Act.
Under the section 135AA, CBIC said, "one lakh rupees for the first offence, to be increased by hundred percent of this amount for each subsequent offence."
"Provided that if the offence is punishable only under Section 135AA, the immunity from prosecution shall be granted," 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 fees, as per PTI.
Jain added that these changes seem to have been made in an endeavour to prevent unnecessary litigation, which is the principle intent behind incorporating compounding provisions in the law.