Input service distributor registration dispute supported waiver of pre-deposit and stay of recovery pending appeal.

Interim relief was granted because the disputed period pre-dated 16.06.2005, when registration of an input service distributor was not required, and the applicant's later registration request had been accepted by the Revenue without objection. As there was also no present dispute over credit eligibility, a prima facie case existed for protection during the appeal. The applicant was therefore entitled to waiver of pre-deposit and stay of recovery of the disputed service tax demand and penalties.

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Issues: Whether, in the facts of the case, the applicant was entitled to waiver of pre-deposit and stay of recovery in respect of the disputed service tax demand and penalties.

Analysis: The disputed period was before 16.06.2005, when registration of an input service distributor was not required. The applicant thereafter applied for registration, which was accepted by the Revenue without objection. The record also showed no dispute, at this stage, regarding the eligibility of credit. On these facts, a prima facie case was made out for grant of interim relief.

Conclusion: The applicant was entitled to waiver of pre-deposit and stay of recovery during pendency of the appeal.

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