Pre-deposit waiver in tax appeal turns on prima facie assessment of contract activity and record-based stay relief.

Entitlement to partial waiver of pre-deposit depended on a prima facie assessment of the contract activity and the material on record. The dispute over whether the work was manufacturing-related or supply of manpower required detailed examination at final hearing, so it was not ative at the stay stage. The allegation that service tax had been collected but not paid was unsupported by concrete material and could not by itself justify a larger deposit. As substantial payment had already been made, a further deposit of Rs. 5,00,000 was directed, and on compliance the balance pre-deposit was waived and recovery stayed during the appeal.

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Issues: Whether the applicant was entitled to partial waiver of pre-deposit for admission of the appeal, and whether the material on record justified a larger deposit at the stay stage.

Analysis: The dispute turned on the true nature of the activity undertaken under the contract, namely whether it was manufacturing-related work or supply of manpower, and the record showed that this question required detailed examination at final hearing. The allegation that service tax had been collected but not paid was not supported by concrete material in the notice or order, and the reference to such collection could not by itself resolve the stay issue. Since the applicant had already deposited a substantial amount, the balance requirement had to be calibrated on a prima facie assessment pending final disposal.

Conclusion: The applicant was directed to make a further deposit of Rs. 5,00,000 within six weeks, and on such deposit the balance pre-deposit was waived and recovery stayed during the pendency of the appeal, which is partly in favour of the assessee.

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