The finance Ministry has amended the Section 28 of the Customs Act, 1962, reducing the penalty in cases of customs duty fraud by 10 percent. Now the amount of penalty payable in cases involving fraud, collusion, willful mis-statement or suppression of facts with the intent to evade payment of duty, shall be fifteen percent instead of 25 percent.
Sections 112 and 114 of the Customs Act which, respectively provide for penalty for improper import and export of goods, too have been amended by insertion of new clauses to provide for a penalty of up to 10 percent of the duty sought to be evaded or Rs 5,000, whichever is higher. Now there will be a penalty not exceeding ten percent of the duty sought to be evaded or Rs 5,000, whichever is higher, for improper export and import of goods.
The Ministry has also rationalised imposition of penalty on central excise duty and service tax evasions by fraud and other means. In case of any willful evasion of central excise duty, a penalty equal to the duty evasion will be payable. Similarly, the penalty will be hundred percent of Service Tax amount involved in such cases. A reduced penalty equal to 15 percent of the Service Tax amount is to be paid if Service Tax, interest and reduced penalty is paid within 30 days of service of notice in this regard, the Act said.