Pre-deposit and stay in service tax appeal over renovation contract required interim compliance and protected recovery pending hearing.

In an appeal against a service tax demand under Section 73 of the Finance Act, 1994, the tribunal considered whether pre-deposit was required before the appeal could proceed and whether recovery of the balance demand should be stayed. The renovation contract was not, on a cursory reading, shown to exclude the use of goods, and the appellant's contention that the work was not purely finishing or completion work, with a larger material component, required detailed examination at final hearing. Financial hardship was also treated as relevant to interim relief. The appellant was directed to deposit Rs. 1,00,00,000 within eight weeks, and recovery of the balance demand was stayed on compliance.

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Issues: Whether the appellant was required to make a pre-deposit in an appeal arising out of a service tax demand under Section 73 of the Finance Act, 1994, and whether recovery of the balance demand should be stayed during pendency of the appeal.

Analysis: The contract was for renovation work and the scope of work did not, on a cursory reading, rule out involvement of goods. The appellant's contention that the work was not purely finishing or completion work, and that a larger portion of the value was attributable to materials, required detailed examination at the stage of final hearing. Financial hardship was also considered relevant for interim relief.

Outcome: The appellant was directed to deposit Rs. 1,00,00,000 within eight weeks, and on compliance, recovery of the balance demand was stayed during the pendency of the appeal.

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