Pre-deposit waiver in service tax dispute denied where study materials lacked separate value from coaching services.

Full waiver of pre-deposit was declined in the service tax appeal concerning the alleged value of study materials sold with coaching services. At the stay stage, the applicant failed to show that half the course fee represented the actual cost of materials sold, and the materials appeared to have no separate value independent of the training service. The possible artificial splitting of receipts was left open for final hearing. Conditional protection was granted instead: a deposit of Rs. 40,00,000 was directed within six weeks, after which the balance dues were waived and recovery stayed pending appeal.

---

---

Issues: Whether the applicant was entitled to full waiver of pre-deposit in the appeal against confirmation of service tax on the alleged value of study materials sold along with coaching services.

Analysis: The applicant did not establish, at the stay stage, that 50% of the course fee represented the actual cost of materials sold. The materials appeared to have no separate value independent of the training service, and the question whether the receipts were artificially split could be examined at the final hearing. In these circumstances, full waiver was not justified, though conditional protection could be granted against the balance dues.

Conclusion: Full waiver of pre-deposit was declined. The applicant was directed to deposit Rs. 40,00,000 within six weeks, and on such deposit the balance dues were waived and recovery stayed during the pendency of the appeal.

---