Tour operator classification dispute led to partial pre-deposit relief and stay of recovery pending appeal.

The service tax dispute concerned classification of the appellant as a tour operator and the related request for complete waiver of pre-deposit and stay of recovery. Liability for the period before 10-09-2004 was treated as already settled in favour of the appellant, while the classification issue and the applicability of service tax to a State Government organisation for the later period were left for final hearing. As no prima facie case for total waiver was made out, the appellant was directed to deposit Rs. 1 lakh within four weeks. On compliance, the balance pre-deposit was waived and recovery was stayed until disposal of the appeal.

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Issues: Whether the appellant was entitled to complete waiver of pre-deposit and stay of recovery in a service tax demand raised on the alleged classification as a tour operator, including the liability position for the period prior to 10-09-2004 and the period thereafter.

Analysis: The liability for the period prior to 10-09-2004 was treated as already settled in favour of the applicant. For the subsequent period, the classification of the appellant's activity as that of a tour operator, and the applicability of service tax to a State Government organisation, required examination at the final hearing. On that basis, the appellant was found not to have made out a prima facie case for complete waiver of the confirmed demand.

Outcome: The appellant was directed to deposit Rs. 1 lakh within four weeks, and on compliance the balance pre-deposit was waived and recovery stayed till disposal of the appeal.

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