Prima facie case on revised service tax classification beyond the show cause notice justified waiver of pre-deposit and stay.

In service tax proceedings, a stay application succeeded where the impugned suo motu revision under Section 84 of the Finance Act, 1994 appeared to travel beyond the scope of the original show cause notice. The notice proceeded on construction service for the relevant period, but the revisional order converted the matter into repair and maintenance service. That departure created a prima facie case for the appellant at the interim stage, and the balance of convenience was found in its favour. Waiver of pre-deposit was therefore granted and recovery of the demand was stayed pending disposal of the appeal.

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Issues: Whether, in a stay application arising from service tax proceedings, the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery on the ground that the suo motu revision under Section 84 of the Finance Act, 1994 travelled beyond the scope of the show cause notice.

Analysis: The notice was issued for taxing the appellant on the basis of construction service for the relevant period. The order under challenge had been revised suo motu by converting the matter into repair and maintenance service. At the interim stage, this departure from the basis of the show cause notice created a prima facie case in favour of the appellant, and the balance of convenience was found to lie with the appellant pending disposal of the appeal.

Outcome: Waiver of pre-deposit was granted and recovery of the demand was stayed during pendency of the appeal.

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