Public authority statutory functions support waiver of service tax pre-deposit and stay of recovery in appeal.

A statutory corporation constituted under the Maharashtra Industrial Development Act, 1961 was held to have made out a strong prima facie case for waiver of pre-deposit in a service tax dispute because it functioned as a public authority providing amenities under statutory arrangements. The tribunal relied on the recorded finding that the appellant was a public authority and on a CBEC circular stating that activities performed by a public authority under statutory provisions were not taxable under service tax. Pre-deposit of service tax, interest and penalties was therefore waived, and recovery was stayed during the pendency of the appeal.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit of service tax, interest and penalties on the footing that it was a public authority carrying out statutory functions.

Analysis: The appellant was a statutory corporation constituted under the Maharashtra Industrial Development Act, 1961 and was providing amenities in an industrial estate under arrangements governed by law. The impugned order had recorded that the appellant was a public authority. The Board's circular dated 18.12.2006 stated that activities performed by a public authority under statutory provisions were not taxable under service tax. On that basis, the appellant was found to have a strong prima facie case.

Conclusion: Pre-deposit of service tax, interest and penalties was waived and recovery was stayed during the pendency of the appeal.

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