Penalty waiver for delayed service tax payment denied where repeated defaults were unexplained and tax with interest was insufficient.

Repeated delay in payment of service tax and in filing returns was not treated as a sufficient basis for waiver of pre-deposit of penalty under Section 76 of the Finance Act, 1994. Payment of tax with interest alone was also not accepted as a ground for reduction of penalty under Section 80, because no genuine reason was shown for the defaults. The note therefore reflects a strict approach to discretionary relief where delay is unexplained and compliance is only made after the default is detected.

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Issues: Whether waiver of pre-deposit of the penalty imposed under Section 76 of the Finance Act, 1994 should be granted, and whether any ground was made out for reduction of penalty in exercise of discretion under Section 80 of the Finance Act, 1994.

Outcome: No genuine reason for the repeated delay in payment of service tax and filing of returns was shown, and payment of tax with interest by itself was not accepted as a sufficient ground for waiver.

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