Lenient view on service tax short-payment justified where tax and interest were paid and no intent to evade was shown.

Penalty for service tax short-payment may be waived where the default is brief, the tax and interest are paid after the omission is pointed out, and the facts do not support an intention to evade tax. On these facts, the short-payment arose from omission of an exemption, the assessee made payment once the liability was identified, and the matter was treated as suitable for a lenient view under Section 80. Penalty under Sections 76 and 77 was therefore waived in favour of the assessee.

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Issues: Whether penalty under Sections 76 and 77 of the Finance Act, 1994 was liable to be waived on the facts of the case.

Analysis: The service tax short-payment was for a brief period of 59 days arising from omission of the exemption, and the tax with interest was paid once the liability was pointed out. The facts showed no sufficient basis to infer an intention to evade tax, and the case was treated as fit for grant of a lenient view under Section 80.

Conclusion: Penalty under Sections 76 and 77 was waived in favour of the assessee.

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