Penalty u/s 77

This query is : Resolved

JIMMY VADERA (Querist)
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25 August 2011 One Private Limited company fails to get Service Tax Registration for GTA without intention ( not aware about this) from FY 2006-07.
Now In Service Tax Audit, Audit team has caught this and now wants to levy penalty u/s 77 for late registration of GTA as well as for Late filling of returns from 2006-07 to 2009-10( Rule 7(3)). Company has already paid Service Tax amount and Interest for this.

Now, Whether company can claim due to ignorance of law. we did not get registration and whether any penalty can be waived off? What are the options?

Please help

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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25 August 2011 Although the penalty is liable to be
imposed for the circumstances covered under the provisions of section 77, Section 80 of the Finance
Act,1994, provides provisions not to impose penalty, for any failure referred to in the former section if the service tax assessee proves that there was
sufficient cause for such failure.

But to invoke section 80, ignorance of law can't be pleaded especially in case of corporate assesse's because court's have ,not in service tax cases, repeatedly said that 'ignorance of law is not an excuse'.

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