Composite contract tax valuation: tribunal waived pre-deposit and stayed recovery after finding no prima facie basis to split the contracts.

Composite contracts were alleged to be divisible into manpower supply, construction, and maintenance and repair for tax demand purposes, but the record did not prima facie support such splitting or the valuation adopted by the adjudicating authority. The claimed free supply of material was also noted as being in dispute before the Delhi High Court. On that prima facie assessment, the tribunal found no basis to insist on pre-deposit at the admission stage, and the disputed recovery was stayed pending appeal.

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Issues: Whether the appellant was required to make pre-deposit of dues arising from the demand confirmed on the basis that the composite contracts could be split into separate components of manpower supply, construction, and maintenance and repair, and whether stay of recovery was warranted pending appeal.

Analysis: The appellant's contracts were treated by the Revenue as comprising distinct taxable elements, but the record did not prima facie establish a basis for splitting the composite contracts into three separate components or for the valuation adopted by the adjudicating authority. The claim regarding free supply of material was also stated to be the subject of pending disputes before the Delhi High Court. On this prima facie assessment, the demand was not considered fit for insistence on pre-deposit at the admission stage.

Conclusion: Pre-deposit was waived and recovery of the disputed dues was stayed during the pendency of the appeal.

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