Revenue neutrality and Section 80 relief led to waiver of penalty despite short payment allegations.

Revenue neutrality, without supporting factual data, was not sufficient on its own to displace the allegation of short payment or to establish absence of intent to evade duty. Even so, on the facts, the discretionary relief under Section 80 was granted and the penalty under Section 78 was waived. The demand and other consequential components were left undisturbed.

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Issues: Whether, on the facts, the appellant could resist the penalty imposed under Section 78 and obtain relief under Section 80 on the plea of revenue neutrality and absence of intent to evade duty.

Analysis: The appellant had discharged service tax on services received from abroad and the short payment was made good immediately when pointed out. The claim of revenue neutrality was pressed as a basis to negate intention to evade duty and to defeat invocation of the extended period. The material placed, however, did not satisfactorily establish revenue neutrality on facts with the required data. Even so, having regard to the circumstances of the case, the discretionary relief under Section 80 was considered appropriate, and the penalty under Section 78 was waived.

Conclusion: The penalty under Section 78 was waived and relief under Section 80 was granted, while the demand and other consequential components were not disturbed.

Final Conclusion: The appeal succeeded only to the limited extent of setting aside the penalty, and the remaining adjudication was left undisturbed.

Ratio Decidendi: Revenue neutrality, without supporting factual data, may not by itself displace the allegation of short payment, but discretionary statutory relief can still be granted to waive penalty on the facts of the case.

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