Pre-deposit waiver and stay on recovery may follow where substantial payment and arguable limitation support the appellant's case.

Where a substantial portion of the disputed service tax demand and some interest had already been paid, and the dispute appeared arguable, the Tribunal treated further pre-deposit as unnecessary and stayed recovery of the balance during the appeal. On limitation, it noted that a departmental circular clarifying taxability of commission received by dealers from banks and NBFCs indicated genuine uncertainty during the relevant period, so the extended period was not prima facie invocable and the limitation objection remained arguable in favour of the appellant.

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Issues: (i) whether the appellant was required to make further pre-deposit and whether recovery of the remaining demand should be stayed during the pendency of the appeal; (ii) whether, on a prima facie view, the extended period of limitation could be invoked for the service tax demand.

Issue (i): whether the appellant was required to make further pre-deposit and whether recovery of the remaining demand should be stayed during the pendency of the appeal.

Analysis: The order recorded that more than 50% of the disputed demand and some interest had already been paid. On that basis, and considering the arguable nature of the dispute, the Tribunal found it to waive any further pre-deposit and protect the appellant from recovery during the appeal.

Conclusion: Further pre-deposit was waived and recovery of the remaining liability was stayed.

Issue (ii): whether, on a prima facie view, the extended period of limitation could be invoked for the service tax demand.

Analysis: The Tribunal noted that the departmental circular clarified the position on taxability of commission received by dealers from banks and NBFCs, including cases where part of the commission was passed on to customers. The existence of such clarification was treated as indicative of genuine doubt during the relevant period, supporting the appellant's plea that the demand may be barred by limitation.

Conclusion: On a prima facie view, the extended period was not considered invocable and the limitation objection was held arguable in favour of the appellant.

Final Conclusion: The appeal was protected by waiver of further pre-deposit and a stay on recovery, with the limitation issue left open for consideration in the appeal.

Ratio Decidendi: Where the record shows payment of a substantial portion of the demand and a bona fide controversy supported by a clarificatory circular, further pre-deposit may be waived and recovery stayed on a prima facie view, while the limitation plea is treated as arguable.

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