Pre-deposit waiver in service tax dispute denied where assessee failed to show prima facie exemption, abatement, or undue hardship.

In an appeal against service tax demand and penalty, the Tribunal declined full waiver of pre-deposit because the appellant did not produce sufficient material to establish sub-contractor status, non-taxability, prior tax payment by the principal operator, or entitlement to full abatement under Notification No. 15/2007-S.T. Applying a prima facie assessment and balance of convenience, it held that Revenue's interest required protection pending appeal and directed partial pre-deposit, with recovery of the balance stayed on compliance.

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Issues: Whether waiver of pre-deposit could be granted in full in an appeal against service tax demand and penalty.

Analysis: The appellant challenged the demand on several grounds, including sub-contractor status, double taxation, abatement under Notification No. 15/2007-S.T. dated 04.04.2007, and limitation. The Tribunal found that the appellant had not produced sufficient evidence to support the claimed sub-contractor arrangement, non-taxability, or entitlement to full abatement. It also found no material to show that the service had already suffered tax in the hands of the principal operator, and no basis to conclude that the appellant would suffer undue hardship if required to make a partial deposit. Applying the principles of balance of convenience and prima facie assessment, the Tribunal held that Revenue's interest required protection during the pendency of the appeal.

Conclusion: Full waiver of pre-deposit was declined and the appellant was directed to pre-deposit Rs. 85 lakhs, with stay of recovery of the balance amount on compliance.

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