Reasonable cause can justify waiver of separate penalty where service tax liability and other penalties are otherwise sustained.

Separate penalty under section 76 of the Finance Act, 1994 was waived because the assessee did not dispute the service tax demand, interest, or penalties under sections 77 and 78, and the record supported consideration of leniency under section 80. The tribunal noted that penalties under sections 76 and 78 are independently imposable, but reasonable cause can justify relief from the section 76 penalty. The section 76 penalty was set aside, while the service tax liability, interest, and the remaining penalties were sustained.

---

---

Issues: Whether the separate penalty imposed under section 76 of the Finance Act, 1994 was liable to be set aside while the service tax liability, interest and penalties under sections 77 and 78 were sustained.

Analysis: The appellant did not dispute the service tax liability, the interest liability, or the penalties under sections 77 and 78. The dispute was confined to the additional penalty under section 76. The order notes that penalties under sections 76 and 78 are separately imposable, but that the authorities below could have considered leniency under section 80 having regard to the nature of the assessee and the extent of the business turnover. On that footing, the plea for relief against the section 76 penalty was accepted.

Conclusion: The separate penalty under section 76 was set aside. The appeal was allowed to that extent, while the remainder of the order was upheld.

Ratio Decidendi: Even where penalties under sections 76 and 78 are independently imposable, the penalty under section 76 may be waived if reasonable cause justifies invocation of section 80.

---