Pre-deposit waiver and recovery stay granted on prima facie support from precedent and board circular on service tax liability

Waiver of pre-deposit and stay of recovery were granted because the Tribunal found a prima facie case in favour of the applicants. It noted that similar demands on the same issue had already been stayed in comparable matters and relied on Board Circular No. 59/8/2003-S.T. dated 20.6.2003, which indicated that foreign language institutes were not liable to service tax. On that basis, the demanded dues were not required to be deposited pending disposal of the appeal, and recovery remained stayed until final decision.

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Issues: Whether the applicants were entitled to waiver of pre-deposit and stay of recovery pending disposal of the appeal.

Analysis: The Tribunal noted that similar demands on the same ground had earlier been stayed in comparable matters and that the Board's Circular No. 59/8/2003-S.T. dated 20.6.2003 indicated that foreign language institutes were not liable to service tax. On that basis, it found a prima facie case in favour of the applicants.

Conclusion: Pre-deposit of the demanded dues was waived and recovery was stayed pending disposal of the appeal.

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