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2015 (1) TMI 385 - AT - Service TaxWaiver of penalty u/s 80 - Imposition of penalty u/s 76, 77 & 78 - Goods Transport Agency - reverse charge mechanism - Held that:- Firstly, the non-payment of service tax was detected from the books of accounts maintained by the appellant. This indicates that they could not have any mala fide intention to evade payment of service tax. The second mitigating factor is that the adjudicating authority waived penalty under Section 76 by taking cover of Section 80. The reason stated by the adjudicating authority for waiving the penalty under Section 76 is that the tax had been paid prior to issue of show cause notice and that the unit is registered under BIFR. Section 80(1) of the Finance Act states "Notwithstanding anything contained in the provisions of Section 76, Section 77 or [first proviso to sub-section (1) of Section 78], no penalty shall be imposable on the assesee for any failure referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure". Therefore it is apparent that the adjudicating authority found reasonable cause for waiving penalty under Section 76. Having found reasonable cause for waiving penalty under Section 76. I see no justification for imposing penalty under Section 78 of the Act. Reliance is also placed on the CESTAT judgment in the case of Ramanasekar Steels Ltd. Vs. Commissioner of C.Ex., Chennai [2007 (10) TMI 28 - CESTAT, CHENNAI] affirmed by the Mad. High Court [2015 (1) TMI 38 - MADRAS HIGH COURT]. The High Court upheld the decision that declaration of a unit as sick company under Sick Industrial Companies Act, 1985, is a 'reasonable cause' for waving penalty under Section 80 of the Act. In these circumstances, the order for imposition of penalties is set aside. - Decided in favour of assesse.
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