Pre-deposit waiver for service tax dispute granted where disputed balance was prima facie covered by exemption notification.

Waiver of pre-deposit was allowed where the assessee had already deposited a substantial part of the service tax demand and the disputed balance was prima facie capable of falling within the exemption under Notification No. 3/1994 dated 30-6-1994. On that interim assessment, the Tribunal found the balance tax, interest and penalty fit for waiver pending the appeal and stayed recovery of the remaining amount until disposal of the matter.

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Issues: Whether waiver of pre-deposit of the balance service tax, interest and penalty was justified in view of the claimed exemption under Notification No. 3/1994 dated 30-6-1994.

Analysis: The Tribunal noted that the assessee had already deposited a substantial portion of the demand and that the disputed balance could fall within the exempted category covered by the notification. In these circumstances, and having regard to the overall material placed for interim relief, the balance demand, interest and penalty were considered fit for waiver pending disposal of the appeal.

Conclusion: Waiver of pre-deposit was granted and recovery of the balance amount was stayed till disposal of the appeal.

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