Interim service tax relief conditioned on substantial pre-deposit where prima facie liability and revenue protection justified stay of recovery.

At the interim stage of a service tax appeal involving alleged Business Auxiliary Service and reimbursement-related amounts, the Tribunal found a prima facie case that the commission and reimbursement components could form part of taxable consideration. To protect the Revenue's interest, it directed a substantial pre-deposit as a condition for stay of recovery. The appeal was made subject to deposit of Rs. 20 lakhs, and recovery of the balance demand was stayed during pendency, provided the condition was complied with. The arrangement was expressly interim and did not finally decide the service tax liability on merits.

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Issues: Whether, at the interim stage, pre-deposit of a part of the service tax demand should be ordered and recovery of the balance demand stayed.

Analysis: The appeal concerned service tax liability arising from alleged Business Auxiliary Service and reimbursement-related amounts. The Tribunal noted that the appellate authority had examined the record, the commission component and the reimbursement component, and had reached a prima facie conclusion that the expenses were connected with the taxable service and could form part of the consideration. On that basis, the Tribunal considered it appropriate to protect the Revenue's interest by requiring a substantial pre-deposit as a condition for interim relief.

Conclusion: Pre-deposit of Rs. 20 lakhs was directed, with stay of recovery of the balance amount during pendency of the appeal subject to compliance.

Final Conclusion: The order is an interim arrangement protecting the Revenue pending appeal and does not finally determine the service tax dispute on merits.

Ratio Decidendi: In an appeal against service tax demand, interim relief may be conditioned on a substantial pre-deposit where the record discloses a prima facie tax liability and the Revenue's interest requires protection.

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