Service tax recovery can continue without pre-deposit, but limited protection may be granted to enable compliance and appeal prosecution.

Recovery under service tax law may proceed where the assessee has not made the pre-deposit required for pending appeals and no interim protection is in place. In this matter, recovery from the bank was justified because the appeals had not been kept alive by compliance with the pre-deposit condition; however, since the Tribunal had not fixed a time for compliance and the assessee was ready to deposit, limited protection was granted by deferring further recovery steps for ten days to enable the pre-deposit and continuation of the appeals.

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Issues: Whether recovery proceedings initiated under the service tax law could continue when the assessee had not made the pre-deposit required for the pending appeals, and whether limited time should be granted to make the pre-deposit.

Analysis: The petitioner had challenged the original service tax demands in appeal without complying with the pre-deposit requirement. The appeals had been rejected on that ground, and one appeal remained pending while the other had been remitted to enable pre-deposit and decision on merits. Since no pre-deposit had yet been made and no interim protection existed in the pending appeal, the authorities were justified in commencing recovery under the provision enabling recovery from the bank. At the same time, as the Tribunal had not prescribed any time limit for making the pre-deposit and the petitioner expressed readiness to comply, limited protection was warranted to enable compliance.

Conclusion: The recovery notices were not quashed, but further proceedings were deferred for ten days to enable the petitioner to make the pre-deposit and pursue the appeals.

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