Prima facie case for stay on tyre retreading service tax dispute led to waiver of pre-deposit.

In proceedings on service tax liability for retreading used tyres as a maintenance or repair service, the Tribunal treated the absence of any contract or agreement between the parties as significant to the stay analysis. It accepted the applicants' case that they were only retreading used tyres and found that they had made out a strong prima facie case at the pre-deposit stage. On that basis, the pre-deposit of the service tax demand was waived and the stay petitions were allowed.

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Issues: Whether, in the absence of any contract or agreement, the applicants had made out a prima facie case for waiver of pre-deposit in proceedings relating to service tax on retreading of tyres as maintenance or repair service.

Analysis: The Tribunal noted the revenue's case that the activity amounted to maintenance or repair service, but accepted the applicants' contention that they were only retreading used tyres and that no contract or agreement existed between them and the customers. On that basis, the Tribunal found that the applicants had a strong prima facie case at the stage of stay.

Conclusion: Pre-deposit of the service tax demand was waived and the stay petitions were allowed.

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