Prima facie service tax liability can limit pre-deposit waiver, while financial hardship may justify only partial relief.

In waiver of pre-deposit applications, relief may be limited where the record shows a prima facie liability to service tax, even if financial hardship is demonstrated. Applying the statutory definition of advertising agency service under the Finance Act, the activity of arranging display of advertisements in media was treated as falling within the taxable service on a prima facie basis. Financial hardship was considered, but it justified only partial relief rather than total waiver. Total waiver of pre-deposit was declined, partial waiver was granted on deposit of a specified sum, and recovery of the balance was stayed during pendency of the appeal.

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Issues: Whether the applicant was entitled to total waiver of pre-deposit of service tax and penalty in proceedings relating to advertising agency service.

Analysis: The expression of liability for service tax was examined with reference to the statutory definition of advertising agency under the Finance Act. On a prima facie view, the applicant's activity of arranging display of advertisements in media brought it within the ambit of the taxable service. At the same time, the applicant's financial hardship was taken into account while considering the extent of pre-deposit.

Conclusion: Total waiver of pre-deposit was declined, but partial waiver was granted subject to deposit of Rs. 90,000 and stay of recovery for the balance during pendency of the appeal.

Ratio Decidendi: In applications for waiver of pre-deposit, the extent of relief may be restricted where the record discloses a prima facie liability, though financial hardship can justify partial waiver.

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