Recipient liability for foreign services and alleged suppression led to waiver of pre-deposit and penalty stay.

In a service tax dispute involving services received from a provider located outside India, the Tribunal noted divergent views on when recipient liability arose, with one view from 1 January 2005 and another from 18 April 2006 after amendment. On that prima facie conflict in legal position, it found that suppression was not established for purposes of pre-deposit and penalty. Accordingly, pre-deposit of the service tax and penalty was waived and stay was granted.

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Issues: Whether the applicant was entitled to waiver of pre-deposit in a service tax demand based on receipt of services from a provider located outside India, and whether suppression could be alleged for the purpose of pre-deposit and penalty.

Analysis: The Tribunal noticed that the liability of a recipient of taxable services provided by a non-resident or from outside India had been the subject of divergent views, with one view fixing liability from 1-1-2005 and another from 18-4-2006 after specific amendment. In that background, it found prima facie merit in the applicant's contention that suppression was not established.

Outcome: Pre-deposit of the service tax and penalty was waived and stay was granted.

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