Coal grinding and business auxiliary service classification supported interim relief, with pre-deposit waived and recovery stayed.

Coal grinding activity was treated as mere processing of goods during the relevant period, and that activity was not within the scope of business auxiliary service at that time because the wider inclusion of processing on behalf of others came later. On that basis, a strong prima facie case for interim relief was made out, and pre-deposit of service tax, interest and penalty was waived while recovery was stayed during pendency of the appeal.

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Issues: Whether the applicant was entitled to waiver of pre-deposit and stay of recovery in a dispute concerning classification of coal grinding activity under business auxiliary service.

Analysis: The applicant's activity was limited to processing of goods by grinding coal during the relevant period. On the material before it, such processing was not covered within the scope of business auxiliary service for that period, while the wider inclusion of processing on behalf of others came later. The applicant was therefore found to have made out a strong prima facie case for interim relief.

Outcome: Pre-deposit of service tax, interest and penalty was waived and recovery was stayed during pendency of the appeal; the stay petitions were allowed.

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