1. The application for waiver of pre-deposit of penalty of Rs. 9,34,099/- arises out of the order of the Commissioner of Central Excise (Appeals), Mumbai. The penally has been imposed on the ground that the applicants did not obtain Service Tax Registration for a period exceeding about 4 years.
2. We have heard both sides. We find prima facie force in the submission that the penalty of Rs. 6,78,599/- imposed for suppression of value of taxable service received by the applicants under Sec. 78 of Chapter V of Finance Act, 1994 as amended is not sustainable in view of the proviso to Section 78 which states that "if the value of taxable service (as determined by the Central Excise Officer on assessment) in respect of which value has been suppressed ...exceeds a sum of twenty five thousand rupees, the Central Excise officer shall not issue any direction for payment by way of penalty without the previous approval of the Commissioner of Central Excise" as in this case the value of taxable service admittedly exceeds Rs. 25,000/- and the records does not show that prior approval of the Central Excise officer was obtained. However, we hold that no prima facie case for waiver of the entire penalty has been made out in view of the long gap in obtaining the Service Tax Registration. We direct pre-deposit of Rs. 2 lakhs (Rupees Two lakhs) within eight weeks from today and on such deposit, pre-deposit of the balance penalty shall stand waived and recovery thereof stayed, pending the appeal. Failure to comply with this direction shall result in vacation of stay and dismissal of appeal without prior notice.