Prima facie classification uncertainty and undue hardship support waiver of service-tax pre-deposit without deciding final liability

Pre-deposit of a service-tax demand may be waived during an appeal where the classification of the appellant as a telecom authority and the scope of business auxiliary services remain prima facie uncertain. The notes state that requiring payment would cause undue hardship and that the balance of convenience favoured the appellant. Accordingly, waiver of pre-deposit was granted for the appeal's pendency, without finally determining the service-tax classification or underlying liability.

---

---

Issues: Whether pre-deposit of the service tax demand should be waived during the pendency of the appeal.

Analysis: The Tribunal noted prima facie uncertainty regarding classification of the appellant as a telecom authority and the extent of business auxiliary services. Without expressing a final opinion on the merits, it found that requiring pre-deposit would cause undue hardship and that the balance of convenience favoured the appellant.

Outcome: Waiver of pre-deposit granted during the pendency of the appeal, without final adjudication on the service-tax classification or liability.

---