Service tax stay on advertising services: partial pre-deposit ordered as complete waiver was refused pending appeal.

In a service tax stay application concerning advertising services rendered to government departments, CESTAT found that the appellant had not established a strong prima facie case for complete waiver of pre-deposit. The exemption plea was held to require detailed examination at the final hearing, so the Tribunal declined full interim relief. Balancing the competing considerations, it granted only partial stay: the appellant was directed to pre-deposit Rs. 8,00,000 within three months, while recovery of the balance demand, interest, and penalties was stayed pending disposal of the appeal.

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Issues: Whether, in a stay application concerning service tax demand, the appellant had made out a case for complete waiver of pre-deposit and stay of recovery pending appeal.

Analysis: The demand related to advertising services rendered to government departments, along with interest and penalties under the Finance Act. The show cause notice was found to have invoked the proviso to Section 73. On the materials before it, the Tribunal held that the appellant did not establish a strong prima facie case on merits, and that the plea of exemption for advertising services rendered to government departments required detailed examination at the final hearing. Balancing the competing considerations, the Tribunal considered it appropriate to grant only partial relief at the stay stage.

Conclusion: Complete waiver was declined. The appellant was directed to pre-deposit Rs. 8,00,000 within three months, and recovery of the balance demand, interest, and penalties was stayed till disposal of the appeal.

Final Conclusion: Interim relief was granted only to a limited extent, with the appeal itself remaining pending for regular hearing.

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