Prima facie case and limitation doubt justify only partial pre-deposit in service tax dispute over online examinations.

A partial stay and waiver of pre-deposit may be granted where the appellant shows only a limited prima facie case against service tax on online examination facilitation and voucher sales, with exemption under Notification No. 14/2004-S.T. left for final hearing. The extended period of limitation was also prima facie doubted because the department had audit material, audit notes, and later discussions on the same activities before issuing the show-cause notice. The operative effect was a directed partial deposit, with recovery of the balance stayed pending disposal of the appeal.

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Issues: (i) Whether, for purposes of stay and waiver of pre-deposit, the appellant had made out a prima facie case against the service tax demand on the activity of facilitating online examinations and sale of vouchers. (ii) Whether the invocation of the extended period of limitation was prima facie justified for the demand covering the period October 2004 to March 2009.

Issue (i): Whether, for purposes of stay and waiver of pre-deposit, the appellant had made out a prima facie case against the service tax demand on the activity of facilitating online examinations and sale of vouchers.

Analysis: The appellant's activity was found, at least prima facie, to be connected with conduct of online examinations and evaluation by a third party for certification of professional competence, rather than a simple sale transaction. The claim of exemption under Notification No. 14/2004-S.T. was noted, but that issue was left for detailed consideration at the final hearing, and the order was confined to interim relief.

Conclusion: A limited prima facie case was made out, but not to the extent of complete waiver.

Issue (ii): Whether the invocation of the extended period of limitation was prima facie justified for the demand covering the period October 2004 to March 2009.

Analysis: In view of the departmental audit in 2005, the audit notes issued in 2006, and subsequent discussions with the Commissioner in 2009 on the same activities, the belated show-cause notice invoking the extended period was found prima facie open to doubt.

Conclusion: The extended period of limitation was prima facie not justified.

Final Conclusion: Interim relief was granted in part by directing a partial deposit and by staying recovery of the balance pending disposal of the appeal.

Ratio Decidendi: In a stay proceeding, a partial pre-deposit may be ordered where the appellant shows only a limited prima facie case and the demand raises a prima facie limitation objection.

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