Prima facie case against business support service demand led to waiver of pre-deposit and stay of recovery.

Collection of vehicle registration amounts on behalf of District Transport Authorities was found to give the appellants a strong prima facie case against the service tax demand framed as business support service. On that basis, pre-deposit of the dues was waived and recovery of the demand was stayed pending disposal of the appeals.

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Issues: Whether the appellants were required to make pre-deposit of the service tax demand and whether recovery of the demand should be stayed pending appeal, in a case where the demand was raised on the footing that the appellants provided business support service.

Analysis: The appellants contended that they were registered dealers of motor vehicles and merely collected amounts towards registration of vehicles on behalf of the District Transport Authorities, which were performing a statutory function under the Motor Vehicles Act. On the facts, the collection activity was found to give the appellants a strong prima facie case.

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

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