Gangadhara Gowda v. CC, CE & ST

FINANCE ACT, 1994

--Penalty under section 78 --Payment of Service tax before issuance of show cause noticeLeviability----Where there was reasonable ground for failure to pay duty in time, assessee was entitled to the benefit of section 80 of the Finance Act, 1994.--Assessee, a Cable TV operator, received signals from UMN and Hathway. Revenue imposed penalty under section 78 alleging that assessee had not paid service tax under cable operator service. Assessee contended that it was under impression that when the main contractor had paid the service tax, then sub-contractor need not pay service tax and hence it had not paid service tax. Held: Since assessee was a small businessman and was not having adequate knowledge of the Act and Service Tax Rules and paid the entire amount along with interest and 25% of the penalty, therefore, it was entitled to the benefit of section 80 of the Finance Act, 1994 as there was a reasonable ground for failure to pay the duty in time.