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Issues:
- Imposition of penalty under Sections 76 & 77 of the Finance Act, 1994. Analysis: The judgment of the Appellate Tribunal CESTAT Mumbai dealt with a stay application against the imposition of penalties under Sections 76 & 77 of the Finance Act, 1994. The applicants had already paid the penalty imposed under Section 77 but disputed the penalty under Section 76. The applicants sought a waiver of pre-deposit of the penalty under Section 76, claiming that they were following guidelines issued by the Maharashtra State Co-op. Bank Ltd., which directed them to deposit service tax with credit to the Central Government by the 25th of the following month. The applicants argued that they were unaware of the requirement to deposit the service tax by the 5th of the following month and had no malicious intent. Upon being notified by the department, the applicants promptly paid the interest on delayed payment. The applicants requested a stay of the penalty during the appeal process. The Tribunal considered the applicant's contentions and found that they had established a prima facie case in their favor. As a result, the Tribunal granted a waiver of pre-deposit of the penalty and stayed the demand during the pendency of the appeal. The judgment highlighted the importance of the applicant's good faith belief in following the guidelines provided by the Apex Body and their prompt action upon being informed of the discrepancy in the deposit deadline. The decision to grant the waiver and stay was based on the Tribunal's assessment of the applicant's case and the circumstances surrounding the penalty imposition under the Finance Act, 1994.
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