Reduced penalty relief requires verified timely compliance; unproved payment claims were insufficient to disturb the confirmed demand and penalty.

Entitlement to the reduced penalty under the proviso to section 78 of the Finance Act, 1994 depended on proof that the tax demand, interest and penalty had been paid in time. The appellant claimed full compliance, but the record did not conclusively verify those assertions, and the Tribunal held that the relevant payments had to be checked by the original authority. In the absence of verified proof, no independent ground was shown to interfere with the confirmed demand or the remaining penalty, and the impugned order was upheld.

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Issues: Whether the appellant had established payment of the service tax demand, interest, and the reduced penalty so as to warrant interference with the impugned order.

Analysis: The appellant asserted that the tax demand and interest had already been paid and that the reduced penalty under the proviso to section 78 of the Finance Act, 1994 had also been deposited within time. The record, however, did not conclusively verify these factual assertions, and the Tribunal found that the relevant payments and compliance required verification by the original authority. No independent ground was made out for disturbing the confirmed demand or the remaining penalty.

Conclusion: The appellant was not shown to be entitled to any further relief on the material before the Tribunal, and the impugned order was upheld.

Ratio Decidendi: Entitlement to the benefit of reduced penalty depends on proof of timely compliance and the underlying factual assertions must be verified before relief can be granted.

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