Penalty waiver under Section 80 cannot be reopened in revision to impose penalties on the same facts.

Where the original adjudicating authority, after finding no intent to evade tax and noting that service tax and interest had been paid, waived penalty under Section 80 of the Finance Act, 1994, the revisionary authority could not later impose penalties under Sections 76, 77 and 78 on the same facts. The discretionary waiver already exercised on a bona fide factual assessment could not be substituted by revision merely to take a different view on penalty. The penalty order was therefore unsustainable and consequential relief followed.

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Issues: Whether penalty under Sections 76, 77 and 78 of the Finance Act, 1994 could be imposed by the revisionary authority after the original authority had waived penalty by invoking Section 80 of the Finance Act, 1994.

Analysis: The assessee had discharged the service tax and interest after the department pointed out the liability, and the original authority had found absence of intent to evade tax and had granted relief under Section 80. The revisionary authority could not, on the same facts, set aside that discretionary decision and impose penalty for the first time. The issue was covered by the binding view that where the assessing authority has exercised discretion to waive penalty under Section 80, the revisionary authority cannot interfere merely to substitute its own view on penalty.

Conclusion: The imposition of penalty by the revisionary authority was unsustainable, and the appeal was allowed with consequential relief.

Ratio Decidendi: Where the original adjudicating authority, on a bona fide factual assessment, exercises statutory discretion to waive penalty under Section 80 of the Finance Act, 1994, the revisionary authority cannot invoke revision to impose penalty for the first time on the same matter.

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