Madras HC upholds CESTAT waiver of Penalty due to distress

Can financial distress constitute reasonable cause for waiving service tax penalties? Madras High Court says yes, where the circumstances support the assessee's inability to pay and the short-payment was not wilful. 

The Court also criticised the Department for producing new financial records only at the second-appeal stage and upheld CESTAT's waiver of penalties under Sections 76 and 78.