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of <h1>Service tax classification dispute over technical inspection vs cargo handling, with interim stay on penalty recovery pending appeal</h1> In an admitted appeal raising substantial questions of law concerning service tax classification (technical inspection and certification/cargo handling) ... Not disposing of the appeal filed by the appellant - Technical Inspection and Certification Service - Cargo Handling Service - levy of penalty as well - HELD THAT:- Having admitted the appeal because it raises substantial questions of law and further in the light of the clarifications based on assessee’s statements, prima facie case for grant of interim stay insofar as the recovery of penalty is concerned, is made out. The balance of convenience is also in favour of the assessee. The rights and equities can be balanced by a limited stay and, therefore, there shall be stay of recovery of penalty in terms of the impugned order. The appeal was admitted on substantial questions of law concerning whether the Appellate Tribunal erred by not disposing of cross-appeals arising from the same Order-in-Original together, and whether it correctly sustained service tax demands under Section 73 for 'Technical Inspection and Certification Service' and 'Cargo Handling Service,' along with interest under Section 75 and penalties under Sections 76, 77 and 78. The appellant clarified that arguments would be confined to penalty: the issues on levy and legality of tax would be referred to only to show that 'when the matter was arguable with regard to the demand, no penalty should have been imposed.' It was further stated that the entire tax had been paid and no refund would be sought, and that the appellant would not argue the merits of the levy 'in the garb of argument on the point of penalty.' On the stay application, the Court held that since the appeal raises substantial questions of law and in light of the clarification, a prima facie case existed 'insofar as the recovery of penalty is concerned,' with the balance of convenience favoring the appellant. Accordingly, it ordered a limited interim stay: 'there shall be stay of recovery of penalty in terms of the impugned order.'
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