Pre-deposit requirement in service tax appeals cannot defeat merits where a prima facie case is shown.

A prima facie case against the service tax demand was found where bus owners supplied buses with drivers for fixed routes, a activity treated in earlier matters as outside rent-a-cab service. In that context, rejection of the appeal solely for non-compliance with the pre-deposit requirement was considered improper, and the matter was remanded for decision on merits without insisting on pre-deposit.

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Issues: Whether the Commissioner (Appeals) was justified in rejecting the assessee's appeal solely for non-compliance with the pre-deposit requirement, and whether the matter deserved remand for disposal on merits without insisting on pre-deposit.

Analysis: The assessee was able to show a prima facie case against the service tax demand. The dispute was similar to an earlier batch of matters in which the activity of bus owners supplying buses with drivers for fixed routes was viewed as not falling within rent-a-cab service. In that backdrop, insistence on pre-deposit and rejection of the appeal without examining the merits was not proper.

Conclusion: The impugned order was set aside and the matter was remanded to the Commissioner (Appeals) to decide the assessee's appeal on merits without insisting on any pre-deposit.

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