Stay relief in tax appeal: tribunal ordered partial pre-deposit and protected recovery of the balance demand pending hearing.

In a stay application before CESTAT, the Tribunal balanced prima facie merits, undue hardship, alleged suppression, and Revenue protection before granting only partial interim relief. It noted that the adjudicating authority had given a reasoned order on taxability, limitation, reimbursement, and penalty, and that the appellant had already made a substantial deposit. The Tribunal directed a further pre-deposit of Rs. 2 crores and stayed recovery of the balance demand on compliance, preserving the appeal hearing while protecting the Revenue's interest.

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Issues: Whether the appellant was entitled to waiver of the balance pre-deposit and stay of recovery pending appeal in view of the prima facie merits, hardship, and revenue interest.

Analysis: The Tribunal noted that the adjudicating authority had passed a reasoned order holding the service to be business auxiliary service and had examined the appellant's pleadings, taxability, limitation, reimbursement, and penalty issues. At the same time, the appellant had already deposited a substantial amount, and the Tribunal weighed the apparent merits, the plea of undue hardship, the allegation of suppression, and the need to protect the Revenue's interest.

Conclusion: The appellant was directed to make a further pre-deposit of Rs. 2 crores, and on such compliance the balance demand was stayed for the purpose of hearing of the appeal.

Final Conclusion: Interim relief was granted in part, with conditional protection against recovery pending disposal of the appeal.

Ratio Decidendi: In a stay application, the Tribunal may balance prima facie merits, undue hardship, and revenue protection by ordering a partial pre-deposit and staying recovery of the balance demand.

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