Extended period of limitation not prima facie sustainable; conditional waiver of pre-deposit and stay of recovery granted in service tax dispute.

Invocation of the extended period of limitation was found not prima facie sustainable in the pending service tax dispute, given the earlier adjudication and revision on the same matter. On that basis, the Tribunal granted interim relief on conditions: the assessee was directed to deposit service tax for the normal period with interest within six weeks and report compliance on the specified date. Upon compliance, waiver of the balance pre-deposit was granted and recovery was stayed during the appeal.

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Issues: (i) whether the demand could, on a prima facie view, be sustained by invoking the extended period of limitation; and (ii) whether pre-deposit of the balance adjudged dues should be waived and recovery stayed during the pendency of the appeal.

Issue (i): whether the demand could, on a prima facie view, be sustained by invoking the extended period of limitation.

Analysis: The Tribunal noted the background of the earlier adjudication and revision for the same dispute and found that, on a prima facie basis, invocation of the larger period was not warranted in the present proceedings.

Conclusion: The extended period was held not prima facie invocable.

Issue (ii): whether pre-deposit of the balance adjudged dues should be waived and recovery stayed during the pendency of the appeal.

Analysis: In view of the earlier direction requiring deposit of 25% in respect of the demand for the larger period, the Tribunal directed deposit of service tax for the normal period along with interest within six weeks and compliance reporting on the specified date.

Conclusion: Upon compliance, waiver of the balance pre-deposit was granted and recovery was stayed during the appeal.

Final Conclusion: Interim relief was granted on conditions, while the appeal itself remained pending for final disposal.

Ratio Decidendi: Where the demand for the extended period is not prima facie sustainable, conditional waiver of pre-deposit and stay of recovery may be granted pending appeal.

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