Conditional waiver of pre-deposit granted in service tax dispute as limitation and bona fide belief raised arguable issues.

In a stay application concerning service tax on mining services, the Tribunal treated the pleas of limitation and bona fide belief as mixed questions of fact and law requiring fuller examination at final hearing. It noted that the appellant could have sought clarification when the levy was introduced, but also considered the correspondence with GMDC, the arguable limitation issue, and the claimed financial hardship. On that prima facie assessment, complete waiver of pre-deposit was declined, but conditional relief was granted: the appellant was directed to deposit Rs. 10 lakhs within eight weeks, after which the balance pre-deposit stood waived and recovery was stayed pending disposal of the appeal.

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Issues: Whether waiver of pre-deposit of the confirmed service tax demand and stay of recovery should be granted, and whether the appellant made out a prima facie case on limitation and bona fide belief.

Analysis: The demand substantially related to mining services. The appellant's plea of bona fide belief and limitation was held to be a mixed question of fact and law requiring deeper examination at final hearing. The order noted that the appellant could have sought clarification when service tax on mining services was introduced, but also took account of the correspondence with GMDC, the arguable nature of limitation, and the financial difficulty claimed. On that prima facie assessment, complete waiver was not justified, but conditional relief was warranted.

Conclusion: The appellant was directed to deposit Rs. 10 lakhs within eight weeks, and on compliance, waiver of pre-deposit of the balance amount was granted with recovery stayed till disposal of the appeal.

Final Conclusion: Interim protection was extended to the appellant on a conditional basis, with only a limited pre-deposit required before the merits of the appeal could be heard.

Ratio Decidendi: In a stay application, where the demand raises an arguable issue of limitation and prima facie bona fide belief, the Tribunal may grant conditional waiver of pre-deposit and stay recovery while balancing the appellant's financial hardship.

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