Job work classification under Cenvat Credit Rules supported waiver of pre-deposit and stay of recovery in service tax dispute.

The appellant's use of excess plant capacity for manufacture by another concern was treated on a prima facie basis as job work under Rule 4(5) of the Cenvat Credit Rules, 2004. On that view, liability to service tax under Management, Maintenance and Repair services was considered unlikely to arise, so complete waiver of pre-deposit of the disputed service tax and penalties was justified. Recovery was stayed pending disposal of the appeal.

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Issues: Whether the appellant was required to make pre-deposit of the service tax and penalties demanded in relation to Management, Maintenance and Repair services, and whether interim stay on recovery was warranted.

Analysis: The appellant's use of excess plant capacity for manufacture by another concern was treated as job work under Rule 4(5) of the Cenvat Credit Rules, 2004. On that prima facie view, the service tax liability under Management, Maintenance and Repair services was found unlikely to arise, and a complete waiver of pre-deposit was considered justified.

Outcome: Waiver of pre-deposit was granted and recovery was stayed till disposal of the appeal.

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