Conditional pre-deposit in service tax stay matters may justify waiver and recovery stay for the balance demand.

In a stay application arising from a service tax dispute under Business Auxiliary Service, the Tribunal held that the amount of pre-deposit could be fixed having regard to the facts and comparable precedent. Because no tax had been deposited in the present matter, unlike the cited case, the Tribunal required a limited pre-deposit as a condition for interim protection. On compliance with the deposit order, recovery of the remaining tax, interest and penalty was waived and stayed during pendency of the appeal.

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Issues: Whether the applicant was required to make a partial pre-deposit and, upon such deposit, whether recovery of the balance demand was to be waived and stayed pending disposal of the appeal.

Analysis: The dispute arose in an appeal concerning service tax demand under the category of Business Auxiliary Service. The applicant relied on an exemption notification and on an earlier High Court order in a comparable matter. The Tribunal noted the factual distinction that, unlike the cited case where part of the tax had already been paid, no amount had been deposited in the present matter. Taking into account the High Court's observations in the relied-upon decision, the Tribunal found it appropriate to require a limited pre-deposit while protecting the appellant against recovery of the remaining dues during the pendency of the appeal.

Conclusion: The applicant was directed to deposit Rs. 5,00,000 within eight weeks, and on such deposit the balance demand of tax, interest, and penalty was waived and recovery stayed till disposal of the appeal.

Ratio Decidendi: In a stay application, the extent of pre-deposit may be fixed on the basis of the facts of the case and comparable precedent, with conditional waiver and stay granted for the balance demand upon compliance.

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