Bona fide belief and prima facie limitation justified waiver of pre-deposit and stay of service tax recovery.

Waiver of pre-deposit was justified where the appellant had already paid service tax with interest for management, maintenance or repair services, and the contract for erection, commissioning and installation placed the service tax burden on the main contractor, who had in fact discharged it. On that basis, the appellant's non-payment was treated as arising from a bona fide belief. The demand notice issued in 2012 for the period April 2007 to March 2008 also appeared, prima facie, to be time-barred. Recovery of the balance dues was therefore stayed pending disposal of the appeal.

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Issues: Whether waiver of pre-deposit of the balance service tax demand was justified on the basis of bona fide belief arising from the contract terms and the prima facie plea of limitation.

Analysis: The appellant had already discharged the service tax liability with interest in respect of management, maintenance or repair service. For the erection, commissioning and installation service demand, the agreement provided that the main contractor would discharge the service tax liability, and the record indicated that this arrangement had in fact been acted upon by the main contractor. In these circumstances, the appellant's non-payment could be treated as arising from a bona fide belief. The notice issued in 2012 for the period April 2007 to March 2008 also appeared, prima facie, to be hit by limitation.

Conclusion: Waiver of pre-deposit was warranted and recovery of the balance dues was stayed pending disposal of the appeal.

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