Appellant ordered to deposit 50% service tax pending appeal, emphasizing compliance. Services partly qualified for export.

The Tribunal directed the appellant to deposit 50% of the confirmed service tax amount within eight weeks, with a waiver of pre-deposit for the remaining dues until the appeal hearing, emphasizing compliance reporting by a specified date. The Tribunal found that the services provided, including promotion and marketing activities in India, did not entirely qualify as used outside India, impacting the export of service classification. The demand for service tax, interest, and penalty was not entirely waived based on the nature of services provided to a foreign firm, as certain activities were performed in India, leading to the decision for partial deposit.

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Issues:
1. Whether the demand for service tax, interest, and penalty should be waived based on the nature of services provided.
2. Whether the services provided by the applicant to a foreign firm qualify as export of service under the Export of Services Rules, 2005.
3. Whether the demand is beyond the normal period of limitation.
4. Whether the activities undertaken by the applicant can be considered as used outside India for the purpose of service tax liability.

Analysis:
1. The applicant sought a waiver of pre-deposit of service tax, interest, and penalty amounting to Rs.1,87,72,186. The demand was confirmed due to the provision of Business Auxiliary Service to a foreign firm. The applicant argued that the services provided fall under the Export of Services Rules, 2005, and cited relevant Tribunal decisions in their favor. The Revenue, however, relied on previous rulings and circulars to support the demand, stating it does not warrant a total waiver of pre-deposit.

2. The Tribunal examined the Agreements between the applicant and the foreign firm, focusing on the nature of services provided. While some activities were related to installation and commissioning of machines, other activities such as sales promotion, technical support, and evaluation of creditworthiness of customers were also undertaken. The Tribunal noted that certain services were performed in India, indicating that they were not entirely used outside India, thus impacting the export of service classification.

3. The applicant contended that if a subsequent circular is clarificatory, the demand would be beyond the normal period of limitation. The Tribunal acknowledged this argument but deferred a detailed examination to the final hearing, emphasizing that no financial hardship was pleaded. The issue of limitation was deemed a mixed question of facts and law.

4. Based on the analysis of the Agreements and activities undertaken by the applicant, the Tribunal found that the services provided, including promotion and marketing activities in India, did not entirely qualify as used outside India. Consequently, the Tribunal directed the appellant to deposit 50% of the confirmed service tax amount within eight weeks, with a waiver of pre-deposit for the remaining dues until the appeal hearing, emphasizing compliance reporting by a specified date.

This detailed analysis of the judgment highlights the key issues addressed by the Tribunal regarding the demand for service tax waiver, export of services classification, limitation period, and the nature of activities undertaken by the applicant.

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