Deduction for goods sold in outdoor catering supported interim relief and stay of recovery on a prima facie tax exemption claim.

An outdoor caterer claimed deduction of the value of goods and materials sold to the service recipient under Notification No. 12/2003-ST, supported by invoices showing VAT payment on those supplies. On a prima facie examination, the tribunal found the documentation and cited authorities sufficient to support the deduction claim, and therefore held that a prima facie case existed for interim relief. Waiver of pre-deposit was granted and recovery of the demanded amount was stayed pending disposal of the appeal.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery on a prima facie view that the value of goods and materials sold was deductible under the service tax exemption notification.

Analysis: The appellant was classified as an outdoor caterer under Section 65(76) of the Finance Act, 1994 and had claimed the benefit of deduction for the value of goods and materials sold to the recipient of service under Notification No. 12/2003-ST dated 20-06-2003. The invoices produced showed VAT payment on the goods and materials sold. On a prima facie examination, the claim appeared supported by the documents and by authorities relied on for the proposition that such value was eligible for deduction. The tribunal therefore found a prima facie case for interim relief.

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

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