Prima facie case and limitation justified waiver of pre-deposit and stay of service tax recovery pending appeal.

In a service tax appeal, the Tribunal granted interim protection after finding a prima facie case for waiver of pre-deposit and stay of recovery. It noted that an earlier coordinate Bench had decided the same controversy one way, while another Bench had taken a contrary view without considering that earlier ruling, showing that two views were possible. The Tribunal also accepted the contention that one show cause notice appeared time-barred, as it was issued beyond one year from the date of filing of the return. On these grounds, pre-deposit was waived and recovery of service tax, interest, and penalties was stayed during the appeal.

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Issues: Waiver of pre-deposit and grant of stay pending appeal in a service tax dispute.

Analysis: The Tribunal noted that the same controversy had earlier been decided by a coordinate Bench in one manner, while another coordinate Bench had taken a contrary view without considering that earlier decision. It also found force in the contention that one of the show cause notices was time-barred, having been issued beyond one year from the date of filing of the return. On that basis, the Tribunal held that a prima facie case had been made out for interim protection.

Conclusion: The requirement of pre-deposit was waived and recovery of service tax, interest, and penalties was stayed during the pendency of the appeal.

Ratio Decidendi: Where two views are possible and a prima facie case is shown, pre-deposit may be waived and interim stay granted, especially when limitation also appears to support the appellant.

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