Pre-deposit in service tax appeals cannot be stretched to full demand where substantial deposit is already made.

Where an assessee had already deposited more than half of the disputed service tax demand, the appellate forum was not justified in insisting on deposit of the entire remaining amount as a condition for hearing the appeal. The High Court held that, in these circumstances, further insistence on full pre-deposit was unnecessary, and the interim protection already granted was made absolute. The direction requiring deposit of the entire service tax amount was set aside to that extent, and the Tribunal was directed to hear the appeal on merits without any further pre-deposit.

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Issues: Whether the Tribunal was justified in directing the assessee to make the entire disputed service tax amount as pre-deposit for hearing of the appeal.

Analysis: The appeal concerned only the quantum of pre-deposit required as a condition for entertaining the assessee's appeal. The assessee had already deposited more than 50% of the total tax demand. In these circumstances, insisting on further deposit of the entire remaining amount was considered unnecessary, and the earlier interim protection was made absolute.

Conclusion: The direction to deposit the entire amount of service tax was set aside to that extent, and the Tribunal was directed to hear the appeal on merits without requiring any further pre-deposit.

Ratio Decidendi: Where the assessee has already made a substantial deposit exceeding half of the disputed demand, the appellate forum should not insist upon full pre-deposit as a condition for hearing the appeal.

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