Prima facie compliance with exemption notification conditions justified waiver of pre-deposit and interim stay in service tax proceedings.

Prima facie compliance with the conditions of Notification No. 32/2004-ST was treated as sufficient to justify waiver of pre-deposit of service tax and penalty at the interim stage. The stay application turned on whether the benefit of the notification was available subject to fulfilment of its conditions, and the record disclosed a prima facie case in the applicant's favour. On that basis, pre-deposit was dispensed with and interim relief was granted.

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Issues: Whether the applicant was entitled to waiver of pre-deposit of service tax and penalty on a prima facie showing that the conditions of Notification No. 32/2004-ST dated 03.12.2004 had been fulfilled.

Analysis: The application for stay turned on whether the benefit of the notification was available subject to compliance with its conditions. On perusal of the record, a prima facie case was found in favour of the applicant because the appeal asserted compliance with the notification conditions. That prima facie satisfaction was treated as sufficient to dispense with pre-deposit at the interim stage.

Conclusion: Pre-deposit of service tax and penalty was waived and the stay petition was allowed in favour of the applicant.

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