Pre-deposit waiver for Section 78 penalty granted where service tax and interest were paid before the show-cause notice.

Penalty under Section 78 of the Finance Act was considered in a stay context where the assessee had already paid service tax and interest before issuance of the show-cause notice for delayed payment under the security services category. The Tribunal noted the assessee's contention that no penalty was leviable in such circumstances and observed that the issue was covered in the assessee's favour, despite a contrary view in another order. As the matter was being considered alongside similar pending cases, waiver of pre-deposit of the penalty amount was granted.

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Issues: Whether penalty under Section 78 of the Finance Act was required to be pre-deposited when the service tax and interest had already been paid before issuance of the show-cause notice.

Analysis: The assessee had deposited the service tax and interest before the show-cause notice in respect of delayed payment under the security services category. The Tribunal noted the contention that penalty was not leviable in such circumstances and observed that the issue was covered in favour of the assessee, notwithstanding a contra view in another order. In view of the pending consideration of similar matters, the request for waiver of pre-deposit was examined as a stay matter.

Conclusion: Waiver of pre-deposit of the penalty amount was granted in favour of the appellant.

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