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2021 (4) TMI 649 - HC - Service TaxLevy of penalty u/s 76 of FA - Reasonable cause for the failure or not - photography services - cost of material consumed in process of rendering service to be included in assessable value or not - HELD THAT:- The appellant is justified in his belief and he was supported by a reasonable ground to the effect that he was not liable to pay the service tax on cost of such material. The benefit of this belief for him is receiving a favourable consideration at the instance of the Tribunal while granting the relief qua the penalty imposed under Section 78. There are no reason why the said benefit cannot be extended to the penalty imposed under Section 76, since both the Sections are to be read along with Section 80, which gives an overriding effect over Sections 76 to 78. The impugned order passed by the Tribunal which denied the said benefit to the petitioner qua the penalty imposed under Section 78 to the tune of 1,00,000/-, is therefore a gross injustice and deserve ₹ to be set aside on account of non-consideration of Section 80 of the Act. No doubt penalty can be imposed under the Act, for contravention of the law, if law provides and no mens rea need to be established, the effect of Section 80, has been completely overlooked - Penalty set aside - petition allowed - decided in favor of petitioner.
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