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2018 (2) TMI 845 - HC - Service TaxPenalty - Advertising Services - non-payment of tax within due dates - payment of tax dues within interest before issuance of SCN - Whether the CESTAT is correct in holding that penalty u/s 76 & 77 of the Service Tax Act is not leviable when part of the service tax due and the interest is paid before the issuance of show cause notice? Held that: - Perusal of the material on record discloses that interest payable on the belated payment of service tax was ₹ 12,63,324/- and that even prior to issuance of the show cause notice, assessee/respondent paid interest amount of ₹ 5,23,151/-. The remaining amount of ₹ 7,40,163/- had been paid on 03.11.2009 immediately on receipt of show cause notice dated 20.10.2009, i.e., within 13 days. As per Section 80 of the Finance Act, 1994, notwithstanding anything contained in the provisions of Section 77 or 1st proviso to Section 78, no penalty shall be imposable on the assessee for any failure referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure. On belated payment, the assessee has substantiated reasonable cause for the failure in payment of service tax, within the stipulated time and hence, he is entitled to the benefit under Section 80 of the Finance Act. There is no manifest error is committed by the CESTAT, Madras - appeal dismissed - decided against Revenue.
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