Service tax on services rendered outside India did not appear applicable at the interim stage, so pre-deposit was waived and recovery stayed.

Services rendered outside India through a US office were treated as prima facie outside the service tax levy for the relevant period, in light of the applicable Board clarification. On that basis, the Tribunal granted waiver of pre-deposit and stayed recovery pending disposal of the appeal. The interim relief was confined to the stage of stay and waiver, with the levy's applicability to such cross-border service activity left open for final decision.

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Issues: Whether waiver of pre-deposit and stay of recovery should be granted where the service activity was rendered outside India and the levy of service tax was challenged as inapplicable for the relevant period.

Analysis: The appellant asserted that the services were performed outside the country through an office in the USA, and relied on the Board's clarification that services provided beyond the territorial waters of India were not liable to service tax because the service tax provisions had not been extended to such areas. The Tribunal accepted that this contention had force at the prima facie stage in view of the circular and the nature of the activity during the relevant period.

Conclusion: Waiver of pre-deposit was granted and recovery was stayed pending disposal of the appeal, in favour of the appellant.

Final Conclusion: The Tribunal afforded interim relief on the basis that the levy did not appear to apply to services rendered outside India during the material period.

Ratio Decidendi: Services rendered outside India during the relevant period, in the light of the applicable Board clarification, were treated as not attracting service tax at the interim stage for purposes of waiver and stay.

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