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2006 (4) TMI 178 - AT - CustomsPenalty - duty paid prior of issue of show cause notice - violation of import/export prohibitions without or with Customs duty infringement while the Later Act - HELD THAT:- This plea will not induce us to bring out an automatic penalty liability u/s 114A of Customs Act, 1962, when short payments of duty have been complied even before the issue of a notice & determination. The plea that penalty is required and prescribed by legislature to be as a regulatory measure or deterrent from doing or not doing an particular act which is undesirable by law would however be on a separate footing. The Custom Act is not only Revenue raising enactment but is also a regulatory enactment, therefore penalties under Sections 112 or 114, 116 of the Customs Act consequent to regulatory enforcement could be arrived at even if duties were discharged or not discharged on or before a notice was issued, since such penalties arise, from a liability of violation of a prohibition regulation etc. by the goods or the importer/abettor and may not necessarily result of in duty implications penalty in such cases could be upheld as imposition of penalty under these section, cannot be only to be related to duty evasion. Thus, we would answer the reference as follows : "There is no reason to differ with the findings of the L.B. in case of Machino Montell [2004 (4) TMI 101 - CESTAT, NEW DELHI] & uphold the penal consequences of Section 114A when duty short paid are deposited before the issue of a show cause notice. However, penal consequences liability emerging from other provisions of Customs Act, 1962 can be separately attracted, on the facts of each case." The matter may now be sent back to the referring bench to decide the appeal.
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