Input service distributor registration as a precondition for credit triggered only partial pre-deposit relief in stay proceedings.

For interim relief, the Tribunal held prima facie that input service distributor registration was a precondition to availing and distributing credit, particularly where the disputed services were received before the head office's registration date. On that basis, the assessee did not establish a full prima facie case for complete waiver of pre-deposit. Partial relief was granted instead: a deposit was directed and recovery of the balance was stayed on compliance, with the appeal left pending for final disposal.

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Issues: Whether, in a stay application, the assessee had made out a prima facie case for waiver of pre-deposit in respect of credit taken as input service distributor for services received before registration.

Analysis: The order noted that the concept of input service distributor was introduced by the Service Tax (Registration of Special Category of Persons) Rules, 2005 brought into force by Notification No. 27/05-S.T. with effect from 16-6-2005, while the disputed credit related to a period prior to the date of registration of the head office. On the rival submissions, the Tribunal recorded a prima facie view that the credit could not be treated as available even before the date of registration for the purpose of distribution by the input service distributor.

Conclusion: The Tribunal declined full waiver, directed deposit of Rs. 3,00,000, and granted stay of recovery of the balance on compliance.

Final Conclusion: Interim relief was granted only on partial pre-deposit terms, and the appeal was kept pending for final disposal.

Ratio Decidendi: For purposes of interim relief, registration of an input service distributor was treated as a precondition for availing and distributing credit, at least prima facie.

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