Penalty waiver under section 80 denied where suppression-based extended period demand stood unchallenged, with no further reduction justified.

Penalty waiver under section 80 of the Finance Act, 1994 was unavailable because service tax demand had been confirmed by invoking the extended period on the basis of suppression of taxable service, and that finding was not challenged. On that footing, reasonable cause protection could not be invoked. The penalty had already been substantially reduced by the lower appellate authority, and no further ground for interference was shown. The appeal therefore failed and the Revenue's position was upheld.

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Issues: Whether the appellant was entitled to waiver of penalty under section 80 of the Finance Act, 1994 on the ground of reasonable cause, and whether the penalty warranted any further reduction.

Analysis: The demand of service tax had been confirmed by invoking the extended period on the basis of suppression of the fact of rendering taxable service, and that finding was not challenged. In that situation, the statutory protection under section 80 was unavailable. The quantum of penalty had already been reduced substantially by the lower appellate authority from the amount equivalent to the tax demand to a lesser sum, and no further basis for interference was shown.

Conclusion: The plea for waiver of penalty under section 80 failed, and no further reduction in penalty was warranted. The appeal was dismissed in favour of the Revenue.

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