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2016 (3) TMI 71 - AT - Service TaxInvokation of Section 80 of the Finance Act, 1994 and immunity from penalty under Section 78 of the Act - Appellant says the default was occurred due to no realization of taxes from service recipient duly for which entire service tax liability along with interest for belated payment of tax has been paid in two instalments before adjudication. Also the part of penalty has been discharged - Held that: There is no element of mens rea coming from the Adjudication order. Therefore, penalising the appellant under section 78 would be harsh in view of the reasonable cause of discharge of liability belatedly due to delay of realisation of service tax from the service recipient deserves consideration. Levy of service tax being an indirect tax mechanism hardship is faced by the tax payer if incidence of tax is not realised from the service recipient. Considering such aspect and taking into consideration that a part of the penalty amount has been discharged, the balance of the penalty is waived. - Decided in favour of appellant
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