Pre-deposit waived where subcontractor faced possible double service tax payment and the dispute had to be decided on merits.

Where a subcontractor contended that service tax had already been paid by the main contractor for the same services, insisting on full pre-deposit was considered unnecessary because it raised a risk of double taxation. The prior dismissal by the Commissioner (Appeals) was for non-compliance with the pre-deposit direction and not on merits, so the dispute required substantive adjudication. The pre-deposit condition was waived unconditionally, and the matter was remanded for decision on merits without insisting on deposit.

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Issues: Whether the appellant could be insisted upon to make pre-deposit of the entire dues when it claimed that service tax for the same services had already been paid by the main contractor, and whether the matter should be decided on merits without such pre-deposit.

Analysis: The appellant's plea was that it acted as a sub-contractor and that payment of service tax by it would result in double payment for the same service. It was also noticed that the appeal before the Commissioner (Appeals) had been rejected for non-compliance with the pre-deposit direction and not on merits. In these circumstances, the insistence on depositing the entire amount was held unnecessary, and the appeal required adjudication on merits.

Conclusion: The pre-deposit condition was waived unconditionally, and the matter was remanded to the Commissioner (Appeals) for decision on merits without insisting on pre-deposit.

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