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1. Reduction of mandatory penalty under Section 114A of the Customs Act by CEGAT. Analysis: The case involved a petition filed by the revenue challenging an order passed by the Customs, Excise & Gold (Control) Appellate Tribunal (CEGAT) regarding the reduction of a penalty imposed under Section 114A of the Customs Act. The assessee had claimed the benefit of Special Additional Duty of customs for an import, which was disallowed, leading to the imposition of a penalty along with duty and interest. The assessee offered to deposit the duty and interest while seeking the setting aside of the penalty. Before the Tribunal, it was noted that the benefit claimed by the assessee was not justified. However, considering the circumstances, the Tribunal reduced the penalty amount from Rs. 82,235/- to Rs. 40,000/-. Section 114A of the Customs Act was cited, emphasizing that the penalty for short-levy or non-levy of duty could be equal to the duty or interest determined under the statute. The Tribunal's order did not establish wilful evasion, and the discrepancy in the amount involved was deemed insignificant. Referring to a previous judgment interpreting Section 11AC of the Central Excise Act, the High Court highlighted that penalties are intended for wilful evasion and could be equal to the duty or interest involved. In this case, since there was no finding of wilful evasion and the amount difference was minor, the High Court concluded that the question of law raised by the revenue did not necessitate a reference for opinion. Consequently, the petition filed by the revenue was dismissed by the High Court.
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