Pre-deposit relief on service tax transport demand limited by doubtful exemption claim and partial prima facie benefit under another notification

A CESTAT bench considered whether the appellant was entitled to complete waiver of pre-deposit and stay of recovery against a service tax demand on transport services. The Tribunal found the reliance on Notification No. 34/2004-Service Tax doubtful on the available worksheet because the same trucks appeared to have been used more than once and the monetary conditions for individual consignments and consignments transported in a goods carriage may not have been met. However, Notification No. 32/2004-Service Tax was held, prima facie, to be applicable and capable of supporting partial relief. Complete waiver was refused, a pre-deposit of Rs. 75,000 was directed, and recovery of the balance demand was stayed pending appeal.

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Issues: Whether the appellant was entitled to complete waiver of pre-deposit and stay of recovery in respect of the service tax demand, and whether the exemption notifications cited could support a prima facie case for relief.

Analysis: The demand arose on transport services availed by the appellant. The Tribunal noted that the plea based on Notification No. 34/2004-Service Tax appeared doubtful on the available work sheet because the same trucks were used on more than one occasion and the monetary conditions for individual consignments and consignments transported in a goods carriage may not have been satisfied. At the same time, Notification No. 32/2004-Service Tax was found, on a prima facie basis, to be applicable and could support partial relief.

Conclusion: Complete waiver was declined. The appellant was directed to make a pre-deposit of Rs. 75,000, and the balance demand was stayed pending disposal of the appeal.

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