Compounding of offences:

Sub-section (2) of section 9A provides for compounding of offences, either before or after the institution of prosecution, under Chapter II of the Central Excise Act by Principal Chief Commissioner/ Chief Commissioner of Central Excise on payment of the prescribed compounding amount in the prescribed manner. Such amount shall be paid to the Central Government by the person accused of the offence. Section 37 empowers Central Government to make rules for specifying the amount to be paid for compounding and the manner of compounding of offences under section 9A.

Persons in respect of whom the provisions of compounding of offences do not apply:

(a) a person who has been allowed to allowed to compound once in respect of any of the offences under the provisions of clause (a), (b), (bb), (bbb), (bbbb) or (c) of section 9(1);

(b) a person who has been accused of committing an offence under this Act which is also an offence under the Narcotic Drugs and Psychotropic Substances Act, 1985.

(c) a person who has been allowed to compound once in respect of any offence under this Chapter for goods of value exceeding rupees one crore.

(d) a person who has been convicted by the court under this Act on or after 30.12.2005. Immunity from prosecution: The compounding authority may grant immunity from prosecution if –

(i) He is satisfied with the co-operation received from the applicant regarding the compounding of offences,

(ii) Applicant has made full and true disclosure of facts relating to the case,

(iii) Applicant agrees to accept such conditions as may be imposed by compounding authority with respect to the case covered under compounding of offence. Withdrawal of immunity: The immunity granted to a person can stand withdrawn if —

(i) the person fails to pay the sum specified in the compounding order within the time specified, or

(ii) the person fails to comply with any conditions subject to which the immunity was granted and thereupon the provisions of Central Excise would apply as if no such immunity had been granted.

(iii) the compounding authority is satisfied that such person had concealed any particulars, material or had given false evidence during the compounding proceedings.

Compounding amount: Rule 5 of the said rules provides for compounding of offences along with the compounding amount which is listed below for reference:-

Sl. No.	Offence under section 9	Compounding amount
1	Contravention of any of the provisions of Section 8 or of rule made under section 37(2)(iii) or 37(2)(xxvii) [Section 9(1)(a)]	` 50,000 for the first offence To be increased by 100% for each subsequent offen
2	Evasion of payment of excise duty [Section 9(1)(b)]	10% to 50% of the duty evaded
3	Removal of any excisable goods in contravention of any of the provisions of this Act or any rule made thereunder or in any way concerning oneself with such removal [Section 9(1)(bb)]	10% to 50% of the duty evaded
4	Possession of, or in any way concerning oneself in transporting, depositing, keeping, concealing, selling or purchasing, or in any other manner dealing with any excisable goods which one knows or has reason to believe are liable to confiscation [Section 9(1)(bbb)]	25% to 50% of the duty evaded
5	Contravention of any of the provisions in relation to CENVAT credit [Section 9(1)(bbbb)]	10% to 50% of the CENVAT credit wrongly taken or utilized
6	Failure to supply any information or knowingly supplying false information [Section 9(1)(c)]	` 50,000 for the first offence To be increased by 100% for each subsequent offence
7	Attempt to commit, or abet the commission of, any of the offences mentioned in clauses (a) and (b) of this section [Section 9(1)(d)]	25% to 50% of the duty evaded