Partial pre-deposit in service tax classification dispute granted with stay of recovery pending appeal.

Classification of the activity was in dispute, and the Tribunal found the appellant had not made out a strong prima facie case for complete waiver. Balancing that position against interim protection pending appeal, it ordered a partial pre-deposit and granted waiver of the balance service tax, cess and penalties. Recovery of the remaining demand was stayed until disposal of the appeal, subject to deposit of the specified amount within the stated time.

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Issues: Whether the appellant should be required to make a full pre-deposit of the service tax, cess and penalties, or be granted partial waiver pending appeal.

Analysis: The order records that the dispute involved classification of the activity and that the appellants were not fully able to make out a strong prima facie case. Balancing this against the need for interim protection, the Tribunal directed a partial pre-deposit of Rs. 1,00,000 within three months and granted waiver of the balance duty and penalty, with recovery stayed till disposal of the appeal.

Conclusion: Partial relief was granted to the appellant by limiting the pre-deposit and staying recovery of the remaining demand pending appeal.

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