Pre-deposit waiver under Central Excise law is unavailable where the assessee says the demanded amount is not duty.

Section 35F of the Central Excise Act permits waiver of pre-deposit only of duty demanded or penalty levied, subject to undue hardship. Where the assessee itself contends that the amount recoverable under Section 11D is not duty, the statutory basis for seeking dispensation under Section 35F does not survive, and the Tribunal cannot entertain a request to stay recovery of that confirmed amount. The application for waiver of pre-deposit of the confirmed amount was therefore rejected, while the penalty component was separately stayed pending appeal.

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Issues: Whether an application for waiver of pre-deposit under Section 35F of the Central Excise Act, 1944 was maintainable where the amount demanded under Section 11D of the Central Excise Act, 1944 was asserted to be not duty.

Analysis: The proviso to Section 35F empowers the Tribunal to dispense with deposit only of duty demanded or penalty levied where pre-deposit would cause undue hardship. Since the applicant itself contended that the amount recoverable under Section 11D was not duty, the statutory basis for invoking Section 35F to seek waiver of pre-deposit did not survive. On that premise, the request for stay of recovery of the confirmed amount could not be entertained. The penalty portion was separately stayed during the pendency of the appeal.

Conclusion: The application for waiver of pre-deposit of the confirmed amount was not maintainable and was rejected.

Ratio Decidendi: Where the assessee asserts that the amount demanded is not duty, the dispensation power under Section 35F of the Central Excise Act, 1944 cannot be invoked to seek waiver of pre-deposit of that amount.

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