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Issues:
1. Imposition of interest and penalty for delayed payment of Service Tax. 2. Justification for reducing the penalty amount imposed by the lower authority. Analysis: 1. The appellant argued that the entire amount of Service Tax was paid before the Adjudication order was passed, attributing the delay to the crash of their office computer's hard disk and the loss of shares in transit. The appellant contended that interest and penalty should not be imposed, citing relevant case law. The respondent, however, asserted that the appellants failed to deposit the tax on time, justifying the imposition of interest and penalties under the rules. 2. The judge examined the impugned order, considering the circumstances leading to the delay in tax payment. The judge acknowledged the appellant's reasons for the delay, noting the loss of shares and data due to the hard disk crash. The judge found that the entire Service Tax demand had been paid before the original order, as confirmed by the Commissioner of Appeal. While agreeing that interest was justified for the delayed deposit, the judge deemed the maximum penalty imposed unreasonable. The judge reduced the penalty amount to Rs. 10,000, considering that the appellant had no intention to evade tax payment. Additionally, the judge found no reason to interfere with the penalty of Rs. 5,000 for delayed filing of the return. In conclusion, the judge modified the impugned order by reducing the penalty amount and disposing of the appeal accordingly.
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