Input service credit on transportation charges supported waiver of pre-deposit and interim stay against recovery.

Transportation charges for empty containers were treated as part of the service charges already subjected to service tax, and the applicants were therefore found to have a prima facie case for input service credit. On that basis, protection from coercive recovery was granted during the pendency of the appeal, with waiver of pre-deposit of the confirmed service tax, interest and penalties. The document reflects a stay order based on the apparent inclusion of transportation expenditure in the assessable value and the resulting interim relief against recovery.

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Issues: Whether the applicants were entitled to waiver of pre-deposit and stay of recovery in respect of the confirmed demands of service tax, interest and penalties on the footing that transportation charges of empty containers formed part of the service charges and service tax had already been paid thereon.

Analysis: The transportation expenditure was not disputed to have been included in the service charges, and service tax had been paid on the amount received by the department as part of the assessable value. On that basis, the applicants were treated as having a prima facie case for input service credit and for protection against coercive recovery during the pendency of the appeal.

Outcome: The pre-deposit of the entire amount of service tax, interest and penalty was waived and recovery was stayed during the pendency of the appeal.

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