Service tax on freight charges: pre-deposit waived and recovery stayed after a prima facie case on assessable value was shown.

Waiver of pre-deposit and stay of recovery were granted in a service tax dispute over freight and transportation charges because the appellants showed a strong prima facie case. The authorities had not considered the contention that the transportation charges had already formed part of the assessable value for central excise purposes, and the relevant notification indicated service tax was payable only on 25% of the freight value. As the demand had been raised on the full amount, the tribunal found sufficient grounds to waive pre-deposit and suspend recovery pending disposal of the appeal.

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Issues: Whether waiver of pre-deposit and stay of recovery should be granted in respect of the service tax demand on freight and transportation charges.

Analysis: The appellants' contention that transportation charges had already formed part of the assessable value for central excise purposes was not considered by the authorities. The notification governing the levy indicated that service tax was payable only on 25% of the freight value, yet the demand had been raised on the full amount. These circumstances disclosed a strong prima facie case in favour of the appellants.

Conclusion: Waiver of pre-deposit was granted and recovery of the demand was stayed pending disposal of the appeal.

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