Ignorance of law not ‘reasonable cause’ for failure to pay service tax so as to warrant waiver of penalties

The show-cause notice had invoked Sections 76 and 78 for imposing penalties on the party but the adjudicating authority chose to refrain from imposing such penalties. It held that the assessee’s failure to pay duty was due to the dilemma whether the service tax was payable or sales tax was payable. On this basis, the benefit of Section 80 of the Finance Act, 1994 was given to the assessee by the adjudicating authority.

As I have already indicated, the statutory definition of “outdoor caterer” at all times has

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