Bona fide delay in new service tax levy supported deletion of penalty where tax and interest were later paid.

Penalty for delayed payment of service tax was held unwarranted where the levy was new, the delay arose from initial confusion, and the tax with interest was paid after the obligation became known. The breach was treated as bona fide and technical, not deliberate, and penalty must be imposed judicially only where there is conscious disregard of the statutory duty. On those facts, the penalty was not imposable and the Revenue's challenge failed.

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Issues: Whether the penalty imposed for delayed payment of service tax was justified when the levy was new, the delay was attributed to initial confusion, and the tax with interest was later paid.

Analysis: The delay was found to have occurred in the initial stage of a new levy, and the assessee had paid the service tax along with interest after becoming aware of the obligation. In such circumstances, the breach was treated as bona fide and technical rather than deliberate. Penalty in such matters is to be imposed judicially and ordinarily not where there is no conscious disregard of the statutory obligation.

Conclusion: The penalty was not imposable and the Revenue's challenge failed.

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