Foreign exchange service exports supported prima facie exemption and justified waiver of pre-deposit in service tax dispute.

Services rendered to a foreign company and paid for in convertible foreign exchange were treated as potentially eligible for exemption under Notification No. 6/99, with reference to the earlier view on similar services under Notifications No. 6/99 and 21/03. On that basis, the Tribunal found that the appellant had shown a prima facie case against the service tax demand and penalties framed as Market Research Agency Services. Waiver of pre-deposit was therefore allowed and recovery was stayed pending disposal of the appeal.

---

---

Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit of service tax and penalties, and consequent stay of recovery pending appeal.

Analysis: The demand was founded on the allegation that the appellant's activities amounted to Market Research Agency Services. The Tribunal noted that the services were rendered to a foreign company and payment was received in convertible foreign exchange. It also referred to the applicability of Notification No. 6/99 and the earlier view that similar services received in foreign exchange were eligible for exemption under Notification No. 6/99 and subsequently Notification No. 21/03. In these circumstances, the Tribunal considered that the appellant had demonstrated a prima facie case.

Conclusion: The appellant was entitled to waiver of pre-deposit and recovery was stayed till disposal of the appeal.

---