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Union Budget proposes penalty for obtaining & utilizing FTP instruments by fraud


8th July

Finance (No.2) Bill, 2019, introduced in the Indian Parliament on 5th of July, has proposed to insert new Section 114AB in the Customs Act, 1962 to provide for penalty for obtaining instrument (scrip, authorization, licence, or certificate, etc.) by fraud, collusion, willful misstatement of suppression of facts, and where such instrument has been utilized for discharge of duty.

Meaning of expression ‘instrument’ has to be taken from Section 28AAA of the Customs Act.

Maximum penalty imposable as per the new provision would be the face value of the instrument.

Further, Section 135 of the Customs Act, under the Chapter on 'Offences and Prosecutions' is also being amended to provide for imprisonment and/or fine in case a person obtains an ‘instrument’ by fraud, collusion, willful misstatement or suppression of facts and such instrument is utilized for payment of duty.

It may also be noted that Section 104 relating to ‘Power to arrest’ is also being amended to provide for such offence of obtaining the instrument by fraud, etc., and then utilizing it for payment of duty, as a cognizable and non-bailable offence if the duty involved exceeds Rs. Fifty lakh.

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