Pre-deposit in service tax dispute on foreign airline commission upheld as no prima facie case was shown.

A service tax dispute over overriding commission received from foreign airlines was found not to justify waiver of pre-deposit, because a prior decision of the same Bench had already gone against the appellants and they failed to establish a prima facie case on merits. The Tribunal also noted that the demand was within the normal limitation period under section 73 of the Finance Act, 1994, and did not accept the Export of Services Rules plea at the interim stage. On a lenient view, it directed a pre-deposit of Rs. 10,00,000 within four weeks, without finally adjudicating tax liability.

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Issues: Whether the appellants had made out a prima facie case for waiver of pre-deposit in respect of the service tax demand on overriding commission received from foreign airlines, and whether the demand was barred by limitation or otherwise liable to be interfered with at the interim stage.

Analysis: The demand arose from overriding commission received in Indian currency from airlines registered abroad. A prior decision of the same Bench had gone against the appellants on the same issue, and the Tribunal found that the appellants could not establish a prima facie case on merits. It also held that the demand was within the normal period of limitation under section 73 of the Finance Act, 1994. The plea based on the Export of Services Rules was not found acceptable, though a lenient view was considered while deciding the interim relief request.

Outcome: Direction issued to pre-deposit Rs. 10,00,000 within four weeks and report compliance on the specified date; no final adjudication of the tax liability was made.

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