Reasonable cause can justify waiver of service tax penalty, though the revenue challenge was not entertained in this matter.

Section 80 of the Finance Act, 1994 is noted as permitting waiver of penalty for delayed deposit of service tax where reasonable cause for the failure is established. In the stated matter, the revenue appeal was not entertained because the revenue effect was negligible, and the penalty was not interfered with. The discussion therefore highlights that waiver depends on proof of reasonable cause, while the actual result described was that the penalty stood and the revenue challenge failed.

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Issues: Whether penalty for delayed deposit of service tax could be waived on showing reasonable cause under Section 80 of the Finance Act, 1994.

Analysis: The appeal was not entertained as the revenue effect was negligible. In any event, the Court noted that Section 80 of the Finance Act, 1994 permitted waiver of penalty where reasonable cause for failure to deposit service tax within the stipulated period was established.

Conclusion: The penalty was not interfered with and the revenue appeal failed.

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