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Revenue's appeal against setting aside penalty on late service tax deposit and late filing of return. Analysis: The appeal was filed by Revenue against the setting aside of penalty on M/s. J.S. Architect Pvt. Ltd. for late service tax deposit and late filing of the half-yearly return. The appellant argued that due to serious illness of a close relative of the Director, the service tax could not be deposited on time. The entire service tax was eventually deposited with interest, and there was no intention to evade payment. The appellant relied on a Tribunal decision stating that penalty is not imposable if there was a reasonable cause for the delay. On the other hand, the Departmental Representative contended that a penalty should be imposed as the service tax was paid after almost six months. Upon examination, it was found that Sections 76 and 77 of the Finance Act, 1994 allow for penalties if service tax is not paid on time or if the required return is not furnished promptly. However, Section 80 of the same Act states that no penalty shall be imposed if the assessee proves a reasonable cause for the failure. In this case, the Commissioner (Appeals) set aside the penalty after reviewing documents provided by the respondents regarding the treatment of the Director's close relative for cancer during the period of default in service tax payment. Since the entire service tax was paid with interest later on, it was deemed a situation where Section 80 applied. Therefore, the Tribunal found no reason to interfere with the Commissioner's decision and rejected the Revenue's appeal. In conclusion, the Tribunal upheld the decision to set aside the penalty on M/s. J.S. Architect Pvt. Ltd. for late service tax deposit and late filing of the return, as the circumstances surrounding the delay were considered reasonable under Section 80 of the Finance Act, 1994.
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