Pre-deposit waiver for service tax on pre-enhancement policies granted on a prima facie case and prior departmental view.

Service tax demand on policies issued before the rate enhancement was held to disclose a prima facie case for relief because an earlier departmental appellate view in the assessee's own matter had treated the higher rate as inapplicable to pre-change policies. On that basis, the Tribunal granted waiver of pre-deposit and stayed recovery of the service tax demand and penalty pending disposal of the appeal.

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Issues: Whether the appellant was entitled to waiver of pre-deposit of the service tax demand and penalty, and stay of recovery pending appeal.

Analysis: The demand related to service tax on policies issued prior to the date on which the rate of service tax was enhanced. The order noted that, in an earlier period involving the same assessee, the departmental appellate authority had taken the view that the enhancement would not affect policies taken before the date of change. In these circumstances, a prima facie case was made out for waiver of the pre-deposit requirement.

Conclusion: Waiver of pre-deposit was granted and recovery of the service tax demand and penalty was stayed pending disposal of the appeal.

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