Prima facie case and undue hardship govern pre-deposit waiver in a service tax classification dispute.

In a stay application for service tax classification, the Tribunal held that complete waiver of pre-deposit was not justified because the appellant had not shown a clear prima facie case on the available record. The dispute concerned whether vehicle transportation activity fell outside taxability or was classifiable as Goods Transport Agency service rather than Business Auxiliary Service. At the interim stage, the classification issue required detailed examination, and undue hardship alone did not warrant full waiver. Partial pre-deposit was directed, and the merits of the classification dispute were left open for final decision.

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Issues: Whether the appellant had made out a prima facie case for complete waiver of pre-deposit in a service tax dispute concerning classification of vehicle transportation activity under Business Auxiliary Service or Goods Transport Agency.

Analysis: The appellant contended that the activity was not taxable or, alternatively, fell within Goods Transport Agency service and not within Business Auxiliary Service. The Revenue maintained that the activity did not satisfy the requirements of Goods Transport Agency service and was properly classifiable as service in relation to promotion or marketing of sale of goods. At the stage of stay, the dispute on classification required detailed examination, and the record did not permit a conclusive finding in favour of the appellant. The plea of undue hardship was considered, but the Tribunal found that complete waiver was not justified on the materials before it.

Conclusion: No complete waiver of pre-deposit was granted; the appellant was directed to deposit Rs. 50,00,000.

Final Conclusion: The appeal was kept pending for final hearing subject to partial pre-deposit, and the classification dispute was left open for decision on merits.

Ratio Decidendi: In a stay application, complete waiver of pre-deposit is not warranted unless the appellant establishes a clear prima facie case and corresponding undue hardship on the materials then available.

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