Amalgamation and service tax: merger of entities supported waiver of pre-deposit and stay on recovery during appeal.

Amalgamation of the appellant with another entity was treated as creating a strong prima facie case against service tax on any alleged service between the merged companies, since there is no taxable service to self after merger. On that basis, pre-deposit of the adjudged dues was waived and recovery was stayed during pendency of the appeal.

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Issues: Whether pre-deposit of the adjudged dues should be waived and recovery stayed during pendency of the appeal in view of the amalgamation of the appellant company with another entity.

Analysis: The appellant relied on the approved amalgamation with effect from 31-3-2009 and the principle that, once two companies merge, any alleged service between them cannot be treated as a taxable service because there is no service to self. On that basis, a strong prima facie case was found for granting interim protection.

Conclusion: Waiver of pre-deposit was granted and recovery of the dues was stayed during pendency of the appeal.

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