Pre-deposit waiver and recovery stay granted where tax was paid before notice and bona fide belief was shown

Waiver of pre-deposit and stay of recovery were granted against a penalty under Section 76 of the Finance Act, 1994 in a service tax matter involving renting of immovable property. The assessee had paid the tax and interest before the show-cause notice and relied on a bona fide belief, absence of intent to evade, and the availability of relief from penal liability under Section 80. Those circumstances supported interim protection from recovery of the penalty.

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Issues: Whether the assessee was entitled to waiver of pre-deposit and stay of recovery of the penalty imposed under Section 76 of the Finance Act, 1994.

Analysis: The application arose from a penalty levied for service tax relating to renting of immovable property. The tax with interest had already been paid before issuance of the show-cause notice, and the assessee relied on absence of intent to evade and on a bona fide belief regarding the timing of payment. The request was also supported by the cited legal position concerning the nature of renting of immovable property service and the circumstances relevant to relief from penal liability under Section 80 of the Finance Act, 1994.

Outcome: Waiver of pre-deposit and stay of recovery of the penalty were granted.

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