Pre-deposit waiver on service tax dispute granted only after deposit of the tax component, with interest and penalty stayed.

Credit taken on input services used for construction of premises within the factory for opening a bank branch required detailed examination at final hearing, so the Tribunal directed deposit of the service tax component. On compliance, it waived pre-deposit of the remaining demand, limited to interest and penalty.

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Issues: Whether waiver of pre-deposit should be granted in respect of the service tax demand, interest and penalty.

Analysis: The dispute concerned credit taken on input services used for construction of premises within the factory for opening a bank branch. The Tribunal found that the controversy required detailed examination at the stage of final hearing. It therefore directed deposit of the service tax amount and, on compliance, waived pre-deposit of the remaining demand towards penalty and interest.

Conclusion: Pre-deposit was waived only to the extent of the penalty and interest, subject to deposit of the service tax amount.

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