Software development classification in a service tax dispute led to waiver of pre-deposit and stay of recovery.

Contract terms and deliverables showed the appellant was engaged in software development, not mere manpower recruitment and supply agency services. The classification dispute was treated consistently with an earlier stay order on similar facts, where the activities were regarded as information technology services. On that basis, waiver of pre-deposit of the balance dues was granted and recovery of the impugned demand was stayed 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 a dispute concerning classification of the activities as manpower recruitment and supply agency services.

Analysis: The contract terms and the nature of the deliverables indicated that the appellant was engaged in software development rather than mere supply of manpower. The respondent fairly accepted that the facts were substantially the same as in a prior stay order where similar activities were treated as information technology services.

Outcome: Waiver of pre-deposit of the balance dues was granted and recovery of the impugned demand was stayed till disposal of the appeal.

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