Pre-deposit waiver and remand on merits granted where a prima facie exemption and export-of-services case was shown.

Unconditional stay was granted where the appeal had been rejected only for failure to comply with a 50% pre-deposit condition. A prima facie case was found on the taxpayer's claim that the services for the earlier period were covered by an exemption notification and, for the later period, that the activity constituted export of services. The pre-deposit requirement was set aside and the matter was remanded to the Commissioner (Appeals) for decision on merits, leaving substantive tax liability open.

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Issues: Whether the appellant was entitled to unconditional stay and waiver of pre-deposit, and whether the matter should be remanded to the Commissioner (Appeals) for decision on merits.

Analysis: The appeal was dismissed by the Commissioner (Appeals) only for non-compliance with the stay order requiring deposit of 50% of the service tax demand. The record disclosed a prima facie case in favour of the appellant, including the contention that the services were covered by the exemption notification for the relevant earlier period and that, for the later period, the activity was claimed to fall within export of services. On that basis, insistence on pre-deposit was found unnecessary and the appeal required consideration on merits.

Conclusion: The appellant was granted unconditional stay, the requirement of pre-deposit was set aside, and the matter was remanded to the Commissioner (Appeals) for decision on merits.

Final Conclusion: The dispute was sent back for adjudication on merits without any pre-deposit condition, while the substantive tax liability remained undecided at this stage.

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