Reasonable cause for delayed service tax payment justified waiver of penalty under Section 76 through Section 80 relief.

Penalty under Section 76 of the Finance Act, 1994 was held unsustainable because the service tax demand and interest had already been paid and the assessee established reasonable cause for the delay. The Tribunal treated the matter as confined to penalty, relied on an earlier Section 80 relief approach, and found that the ingredients for imposing penalty were not satisfied. On that basis, Section 80 protection was applied and the penalty was set aside in favour of the assessee.

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Issues: Whether penalty under Section 76 of the Finance Act, 1994 was liable to be set aside on the ground that the assessee had reasonable cause for delayed payment of service tax and the case attracted protection under Section 80 of the Finance Act, 1994.

Analysis: The service tax demand had already been paid along with interest. The dispute before the Tribunal was confined to penalty. In the circumstances of the notices issued for different taxable services and in the light of the earlier Tribunal decision granting relief under Section 80, the assessee's conduct was treated as showing reasonable cause for the delay in payment. The ingredients for sustaining penalty were therefore not made out.

Conclusion: Penalty under Section 76 of the Finance Act, 1994 was set aside and the appeal was allowed in favour of the assessee.

Ratio Decidendi: Where service tax and interest have been paid and reasonable cause for delayed payment is made out, penalty under Section 76 of the Finance Act, 1994 can be waived by applying Section 80 of the Finance Act, 1994.

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