Prima facie case for service tax classification dispute led to waiver of pre-deposit and stay of recovery.

In a service tax dispute on classification as a consulting engineer, interim relief was granted because the appellant showed a prima facie case that its work was limited to supplying drawings and designs, not consultancy. An earlier bench decision supported that position, and the board circular relied on by the appellant indicated that the relevant service tax coverage applied only from a later effective date. On that basis, waiver of pre-deposit and stay of recovery were allowed pending 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 service tax matter concerning classification as a consulting engineer, having regard to the earlier bench decision and the board circular relied upon.

Analysis: The appellant disputed liability on the ground that its activity was limited to supplying drawings and designs and did not amount to consultancy. A prior bench decision supporting the appellant's stand was available, and the board circular cited by the appellant indicated that the relevant coverage under service tax operated only from the stated later date. On that basis, a prima facie case was found in favour of the appellant for interim relief.

Conclusion: The appellant was entitled to waiver of pre-deposit and stay of recovery pending disposal of the appeal.

Final Conclusion: Interim relief was granted in favour of the appellant, and recovery of the disputed service tax and penalty was stayed until the appeal was decided.

Ratio Decidendi: Where a prima facie case is supported by an earlier bench decision and the relied-upon circular indicates a later effective date, pre-deposit can be waived and recovery stayed pending appeal.

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