Reasonable cause for delayed service tax payment justified waiver of penalty under Section 80.

Penalty under Section 76 of the Finance Act, 1994 may be waived where reasonable cause is shown for delay in payment of service tax. On the facts noted, service tax was a new levy and the record reflected confusion about collection, payment, and procedural requirements; the lower appellate authority therefore invoked Section 80 and condoned the failure. The waiver was held justified and no interference was called for.

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Issues: Whether the penalty under Section 76 of the Finance Act, 1994 was rightly waived by invoking Section 80 on the ground of reasonable cause.

Analysis: The service tax was a new levy and the record showed confusion regarding the collection and payment of tax, along with complexity in the procedural requirements. The lower appellate authority exercised the statutory discretion under Section 80 after accepting that reasonable cause existed for the failure to pay tax in time. Section 80 empowers the proper officer to condone such failure where sufficient cause is shown.

Conclusion: The waiver of penalty was justified and no interference was called for.

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