Pre-deposit relief in service tax dispute turned on absence of a prima facie case and compliance with deposit conditions.

In a pre-deposit and stay matter concerning service tax demand and penalties, the appellant accepted that the demand had been correctly confirmed and relied mainly on financial hardship and alleged reasonable cause for penalty relief. On examination of the record, including the income-tax return, no prima facie case was found in favour of the appellant. The appellant was directed to deposit Rs. 75,000 within eight weeks, and recovery of the balance penalty and interest was stayed pending the appeal, subject to compliance with the deposit condition.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of the service tax demand and penalties.

Analysis: The appellant conceded that the service tax demand had been correctly confirmed and sought relief mainly on the ground of financial hardship and alleged reasonable cause for the penalties. On consideration of the record and the material reflected in the income-tax return, no prima facie case was found in favour of the appellant.

Outcome: The appellant was directed to deposit Rs. 75,000 as pre-deposit within eight weeks, and recovery of the balance penalty and interest was stayed pending the appeal subject to such deposit.

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