Prospective taxability of commissioning and installation services justified waiver of pre-deposit and stayed recovery pending appeal.

Commissioning and installation services rendered before July 2003 were not taxable under consulting engineer services because the specific levy on commissioning and installation was introduced only prospectively. A later Board circular confirming that erection, installation and commissioning are separately taxable supported that view but could not retrospectively expand taxability for earlier services. On that prima facie basis, the tribunal found waiver of pre-deposit justified and ordered recovery to remain stayed pending appeal.

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Issues: Whether waiver of pre-deposit of service tax was justified on the ground that commissioning and installation services rendered prior to July 2003 were not taxable under the category of consulting engineer services.

Analysis: A later Board circular clarified that charges for erection, installation and commissioning are not covered by consulting engineer services and are separately taxable under the relevant entry. The levy on commissioning and installation services was introduced only in July 2003. Since the services in question were rendered before that date, the applicants established a strong prima facie case on merits for the purpose of interim relief.

Conclusion: Waiver of pre-deposit was justified and recovery of the disputed amount was to remain stayed pending appeal.

Final Conclusion: Interim relief was granted in favour of the applicants by dispensing with the pre-deposit and staying recovery during the pendency of the appeal.

Ratio Decidendi: Where the taxable entry for a service is introduced prospectively, services rendered before its commencement cannot be treated as taxable under a different category merely on the basis of an earlier board circular, and this supports waiver of pre-deposit at the interim stage.

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