Rounding off of service tax on prepaid telecom services supported waiver of pre-deposit and stay of recovery.

Prima facie, rounding off of service tax and education cess on prepaid telecom services was supported by Section 37D of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994, and by Board instructions on invoice rounding. The order also noted that the appellant had disclosed the taxable value and amounts collected and remitted in returns, and that limitation independently supported interim relief. On that basis, waiver of pre-deposit and stay of recovery were granted in respect of the demand arising from the rounding-off method.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of the service tax and education cess demand arising from rounding off of tax on prepaid telecom services; and whether limitation also supported grant of interim relief.

Analysis: The demand arose from the manner in which the prepaid card denomination was fixed after rounding off fractions of a rupee in service tax and cess. The appellant had shown the taxable value and the amount actually collected and remitted in the returns. The order records that, prima facie, service tax payable under the Finance Act, 1994 could be rounded off by virtue of Section 37D of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994, and that the Board's supplementary instructions also supported such rounding off in invoices. The order also records a prima facie case on limitation.

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

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