Pre-deposit waiver in service tax dispute granted where works contract evidence and partial deposit supported appellate hearing.

Pre-deposit relief may be granted in service tax disputes where disputed activity is shown as a works contract through sales tax returns, and a substantial part of the confirmed demand has already been deposited. In the noted matter, the activities listed in Sl. Nos. 1, 4 and 5 were supported by sales tax returns declaring them as works contract, and the appellant had deposited about 25% of the confirmed service tax. That payment was treated as sufficient for hearing the appeal, leading to waiver of the balance pre-deposit and stay of recovery until disposal of the appeal.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery in respect of the service tax demand, including the amounts demanded under Sections 76 and 78 of the Finance Act, 1994, where part of the disputed activities was claimed to be works contract.

Analysis: The disputed activities in Sl. Nos. 1, 4 and 5 were supported by sales tax returns showing declaration as works contract. The appellant had also deposited about 25% of the service tax confirmed by the adjudicating authority, which was treated as sufficient for hearing and disposal of the appeal.

Outcome: Waiver of the balance pre-deposit was granted and recovery thereof was stayed until disposal of the appeal.

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