Pre-deposit waiver in service tax dispute where the levy began after the relevant period and a vocational training circular was relied on.

In a waiver of pre-deposit application concerning service tax and penalty for April to June 2003, the tribunal found a prima facie case because the levy on commercial coaching and training centre had come into force only on 1 July 2003. The applicant also relied on a departmental circular stating that vocational training institutes imparting foreign language training would not be liable, and that objection was not addressed in detail in the impugned order. Taking into account the small amount involved and the timing of the levy, the pre-deposit condition was dispensed with and unconditional stay was granted pending final disposal.

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Issues: Whether, in an application for waiver of pre-deposit, the applicant was entitled to unconditional stay in respect of service tax and penalty demanded for the period April to June 2003, when the levy on commercial coaching and training centre came into force on 1-7-2003 and the applicant relied on a circular regarding vocational training in foreign languages.

Analysis: The demand related to a period anterior to the introduction of the levy. The applicant also relied on the departmental circular indicating that vocational training institutes imparting foreign language training would not be liable, and the objection was not dealt with in detail in the appellate order under challenge. In view of the small amount involved and the prima facie case arising from the timing of the levy, the condition of pre-deposit was waived.

Outcome: Unconditional stay was granted by dispensing with pre-deposit, and the appeal was directed to be listed for final disposal.

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