Prima facie exclusion of non-taxable receipts justified waiver of pre-deposit and stay of service tax recovery pending appeal.

For stay and pre-deposit purposes, non-taxable components of the receipts were to be excluded from the taxable demand where the appellant produced a breakup certifying such elements. The Tribunal accepted this prima facie position in a service tax dispute involving classification as commercial coaching and training under the Finance Act, 1994, and treated the projected tax exposure as substantially lower than the adjudicated demand. On that basis, waiver of pre-deposit was granted and recovery was stayed pending appeal.

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Issues: Whether waiver of pre-deposit and stay of recovery should be granted pending appeal by excluding prima facie non-taxable elements from the taxable demand.

Analysis: The demand arose from service tax classification of the appellant's activity as commercial coaching and training under the relevant provisions of the Finance Act, 1994. For the limited purpose of the stay application, the Tribunal accepted the appellant's certification showing a breakup of receipts and held that non-taxable components should not be included in the tax liability at this stage. On that prima facie view, the projected tax exposure was treated as substantially lower than the adjudicated demand.

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

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