In the recent ruling the Delhi High Court,upheld the customs compounding fees imposed on the petitioners, finding them reasonable as they constituted a small fraction of the seized currency.
Surinder Singh And Ors,the petitioner-assessee,filed a petition challenging the order dated 06.09.2024 passed by the Chief Commissioner of Customs. The impugned order rejected their application for compounding of the offence under Section 137(3) of the Customs Act, 1962.
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The petitioners were apprehended for illegally carrying foreign currency. The Commissioner granted their applications for compounding the offence, subject to payment of specific amounts: ₹2,30,000 by Surinder Singh ( 7.7% of the seized currency’s value ), ₹5,60,000 by Davinder Singh ( 4% of the currency handled or to be handled ), and ₹2,00,000 by Sujeet Pandey ( 4% of the seized currency’s value ), as per Rule 5(5) of the Customs ( Compounding of Offences ) Rules, 2005.
The Commissioner instructed that the specified amounts had to be paid within thirty days of receiving the impugned order. Additionally, the petitioners were required to provide proof of payment to the Compounding Authority, as stipulated in Rule 4(5) of the Customs ( Compounding of Offences ) Rules, 2005.
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The court did not find infirmity in the impugned order.
The court noted that the counsel for the petitioners could not identify any grounds to contest the impugned order. The only submission made was that the petitioners were merely carriers and that the amounts determined as the compounding fee were at the upper limit of the permissible range.
The bench observed that the amounts determined were a minor fraction of the currency carried by the petitioners. It concluded that there was no basis to interfere with the impugned order under Section 226 of the Constitution of India. However, the petitioners were granted an additional thirty days to deposit the specified amounts and submit proof of payment to the Compounding Authority.
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A coram of Vibhu Bakhru ( Justice ) and Swarana Kanta Sharma ( Justice ) disposed the petition filed by the assessee.
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