Penalty pre-deposit waiver in service tax matters may be refused when prima facie non-compliance is shown, with conditional relief allowed.

Total waiver of pre-deposit of service tax penalty was refused where the record showed prima facie non-payment of service tax on due dates and failure to obtain registration despite departmental demand. Conditional relief was still granted: the applicant was directed to deposit Rs. 1 lakh within six weeks, and on compliance the balance penalty pre-deposit would stand waived. The note indicates that in penalty pre-deposit matters, full waiver is not justified when there is evident non-compliance with service tax obligations, but partial waiver may be allowed subject to deposit conditions.

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Issues: Whether the applicant was entitled to total waiver of pre-deposit of the penalty imposed under the service tax provisions.

Analysis: The application sought waiver of pre-deposit of penalty. The applicant did not appear, and the record showed non-payment of service tax on due dates and failure to obtain registration despite demand by the Revenue. In these circumstances, full waiver was not considered justified, though conditional relief was granted by directing partial deposit and waiving the balance on compliance.

Conclusion: Total waiver of pre-deposit was denied. The applicant was directed to deposit Rs. 1 lakh within six weeks, and on such deposit the balance penalty pre-deposit stood waived.

Ratio Decidendi: In a penalty pre-deposit application, full waiver may be refused where the record discloses prima facie non-compliance with service tax obligations, while conditional partial waiver may still be granted.

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