Pre-deposit waiver for service tax and penalty granted only partially after hardship plea and weak prima facie case.

Waiver of the entire pre-deposit for service tax and penalty was declined because the applicant did not establish a prima facie case for full exemption, although asserted financial hardship and prior payment supported partial relief. The tribunal balanced the demand position against the appellant's plea of limited admissible credit and hardship, and granted conditional dispensation rather than complete waiver. The applicant was directed to make a pre-deposit within eight weeks, and on compliance the remaining duty and penalty stood waived pending disposal of the appeal.

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Issues: Whether waiver of the entire pre-deposit of service tax and penalty was warranted, and if not, the extent of deposit to be made pending appeal.

Analysis: The application for waiver was examined in the light of the appellant's plea that a substantial amount had already been deposited, that only a small credit was admissible, and that further deposit would cause financial hardship. The record was also considered on the departmental contention that the demand had been detected and that no full waiver was justified. On these facts, the applicant was found not to have made out a prima facie case for complete waiver of penalty, but the circumstances and asserted hardship justified partial relief.

Outcome: The applicant was directed to pre-deposit Rs. 75,000 within eight weeks. On deposit, the balance amount of duty and penalty stood waived till disposal of the appeal.

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