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2014 (6) TMI 87 - HC - CustomsCompounding of offences - Illegal import of goods - Contradictory statements given by assessee - Redemption fine paid to avoid confiscation - Held that:- The power to permit compounding of offences contained in Section 137 (3) is apparently wide; the concerned official is not empowered to allow compounding in respect of offences under Section 135 and 135 (A) and the class of offences which are spelt out in clauses (b) & (c) of the proviso to Section 137 (3). Likewise, an embargo has been placed upon the power of compounding in respect of a person who has been allowed to compound once in respect of any offence under Chapter XVI of the Customs Act, 1962. The requirement of disclosure, apparently spelt out in Anil Chanana [2008 (1) TMI 50 - SUPREME COURT] was read in to the power under Section 137 (3) of the Act, having regard to the given circumstances of the case. It was highlighted during the hearing, that the offence with which the importer or smuggler was charged with in that case attracted a minimum sentence - which impelled the Court’s observation that the petitioner was not entitled to claim compounding. it is apparent that the petitioner after initially refuting ownership, later on admitted ownership in his subsequent statements and paid up the duty amount, penalty and redemption fine. In these circumstances, considering that no minimum sentence or penalty was attracted for the offence that the petitioner was charged with, the denial of compounding meant that he would have to face a long trial which ultimately would, in all probability, culminate in a small fine. The impugned order of the Chief Commissioner in our opinion is erroneous, because apart from the initial contradiction and the first denial, there were in fact no subsequent conflicting statements in that that subsequent statements recorded under Section 108 (on 20.07.2011 and 09.08.2011) clearly admit that he purchased the articles for sale in India - The respondents are hereby directed to accept the compounding application and pass consequential orders - Decided in favour of assessee.
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