Branded service exemption challenge failed at stay stage where activity was found to be goods sales, supporting waiver of pre-deposit.

At the stay stage, the Tribunal held that the appellants had shown a strong prima facie case for waiver of pre-deposit of service tax and penalty because the material indicated they were selling goods under the brand name "Koutons" and not rendering a branded service. The Revenue's objection that service rendered under a brand name fell outside Notification No. 6/2005-S.T. was not accepted on the available record, as the appellants' activity was found to be goods sales rather than branded service. Waiver of pre-deposit was granted and the stay application was allowed.

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Issues: Whether the appellants were entitled to waiver of pre-deposit of service tax and penalty, and whether denial of the exemption under Notification No. 6/2005-S.T. on the ground of branded service was sustainable at the stay stage.

Analysis: The appellants contended that they were selling goods under the name 'Koutons' and were not rendering any branded service. The Revenue's case was that taxable service provided under a brand name or trade name would not qualify for the notification benefit. On the material placed before it, the Tribunal found that the appellants were selling goods and not rendering branded service, and therefore had a strong prima facie case.

Conclusion: Waiver of pre-deposit of service tax and penalty was granted and the stay application was allowed in favour of the appellants.

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