Small scale service tax exemption and brand-name restriction justified prima facie waiver of pre-deposit and stay of recovery.

Small Scale Notification No. 06/2005-S.T. was examined in relation to service tax demanded on commission received for sale of another person's products. The notification was read, prima facie, as denying exemption only where the taxable service is rendered under a brand name or trade name registered in the name of another person. On the facts stated, the commission related to sale of goods, not use of another's registered brand for the taxable service, so a prima facie case for waiver of pre-deposit was made out and recovery was stayed pending appeal.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit in respect of service tax demanded on commission received for sale of Amway products and for grant of stay of recovery during pendency of the appeal.

Analysis: The demand was founded on the view that the appellant was not entitled to the benefit of Small Scale Notification No. 06/2005-S.T. in relation to services connected with the sale of products of another person. The notification was examined and it was found that, prima facie, it contemplated denial of the benefit only where the taxable service was rendered under the brand name or trade name registered in the name of another person. On the facts presented, the commission was received for the sale of goods, and a prima facie case for waiver was made out.

Conclusion: The appellant was entitled to waiver of pre-deposit, and recovery of the demanded amount was stayed till disposal of the appeal.

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