Prima facie exemption and limitation issues led to waiver of pre-deposit and stay of recovery in a service tax dispute.

Road repair work was noted as proposed for retrospective exemption in the Finance Bill, 2012, while construction of parks was observed not to prima facie fall within commercial or industrial construction service. The demand was also considered to appear time-barred. On these grounds, the appellants were found to have a strong prima facie case, and the requirement to pre-deposit service tax and penalties was dispensed with, with recovery stayed during the appeal.

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Issues: Whether the appellants were required to make pre-deposit of service tax and penalties in a dispute concerning taxability of road repair work and construction of parks and boundary walls, where limitation and a proposed retrospective exemption were also raised.

Analysis: The order records that repair of roads was proposed to be exempted retrospectively in the Finance Bill, 2012, that construction of parks did not prima facie fall within commercial or industrial construction service, and that the demand appeared barred by limitation. On that basis, the appellants were found to have a strong prima facie case for interim relief.

Conclusion: The condition of pre-deposit of service tax and penalties was dispensed with and recovery was stayed during the pendency of the appeal.

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