Pre-deposit waiver for penalty stayed where service tax was already paid and services were rendered outside India.

Service tax had already been paid before the show cause notice, and the Tribunal noted prima facie that service tax was not leviable on services rendered outside India. It also relied on the Board circular supporting the assessee's position. On those facts, the penalty demand did not justify insistence on pre-deposit at the interim stage, so waiver of pre-deposit was granted and recovery of the penalty was stayed pending disposal of the appeal.

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Issues: Whether waiver of pre-deposit of penalty and stay of its recovery were justified in the facts of the case.

Analysis: The appellants had already deposited the service tax before issuance of the show cause notice. Prima facie, the Tribunal noted that service tax was not leviable on services rendered outside India and that the Board circular supported the assessee's stand. On that basis, the penalty demand did not warrant insistence on pre-deposit at the interim stage.

Conclusion: Waiver of pre-deposit of the penalty amount was granted and recovery of the penalty was stayed till disposal of the appeal.

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