Pre-deposit waiver in service tax disputes depends on a strong prima facie case; manpower supply defeats full stay relief.

Complete waiver of pre-deposit in a service tax stay application requires a strong prima facie case. On the available contract and adjudication findings, the arrangement appeared to be supply of manpower rather than a pure agent arrangement, so the appellant did not establish entitlement to full waiver at the interim stage. The question whether the appellant could ultimately be treated as a pure agent was left open for final hearing. Partial waiver was therefore granted and the balance demand was stayed subject to compliance.

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Issues: Whether the appellant was entitled to complete waiver of pre-deposit in a service tax dispute on the plea that it acted only as a pure agent and that the wages paid to labourers were deductible from the taxable value.

Analysis: The contract and the adjudication findings showed, prima facie, that the arrangement was for supply of manpower and not a pure agent arrangement. The record also indicated that the appellant had not established a strong prima facie case for full waiver at the stay stage. The issue whether the appellant could ultimately be treated as a pure agent was left for final hearing.

Conclusion: Complete waiver of pre-deposit was declined. The appellant was directed to pre-deposit Rs. 50,00,000, and the balance demand was stayed subject to compliance.

Ratio Decidendi: A party seeking complete waiver of pre-deposit must make out a strong prima facie case; where the contract prima facie indicates manpower supply rather than a pure agent arrangement, only partial waiver may be granted at the stay stage.

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