Waiver of pre-deposit in excise appeals may follow mechanical denial of cross-examination and support from a sanctioned rehabilitation scheme.

Waiver of pre-deposit in excise appeals may be supported where a remanded adjudication mechanically rejects cross-examination requests without addressing procedural fairness, especially when the case substantially depends on witness statements. The text also notes that a sanctioned BIFR rehabilitation scheme, particularly one providing that no payment be sought towards the relevant dues, interest, penalty or other charges, can be a relevant factor in exercising interim discretion. Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 does not itself govern pre-deposit under Section 35F of the Central Excise Act, 1944, but the scheme and surrounding circumstances may still justify interim relief.

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Issues: (i) Whether the appellant was entitled to waiver of pre-deposit during the pendency of the appeal in view of the denial of cross-examination in the remanded adjudication. (ii) Whether the sanctioned BIFR scheme and the circumstances surrounding it justified grant of waiver of the pre-deposit requirement.

Issue (i): Whether the appellant was entitled to waiver of pre-deposit during the pendency of the appeal in view of the denial of cross-examination in the remanded adjudication.

Analysis: The request for cross-examination was rejected by the adjudicating authority merely on the footing that no specific direction had been issued by the remand order. In a fresh adjudication after remand, the authority was required to deal with procedural requests in accordance with law and record reasons for accepting or rejecting them. A mechanical refusal to consider cross-examination, where the case rested substantially on witness statements, supported the plea for interim relief.

Conclusion: The appellant was held entitled to seek waiver of the pre-deposit requirement.

Issue (ii): Whether the sanctioned BIFR scheme and the circumstances surrounding it justified grant of waiver of the pre-deposit requirement.

Analysis: The order notes that the scheme had been worked out in consultation with the Government of India and contained a clause directing that no payment be sought towards the relevant dues, interest, penalty or other charges. Although the statutory bar under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 did not extend to pre-deposit under Section 35F of the Central Excise Act, 1944, the scheme and surrounding circumstances were treated as relevant for interim discretion.

Conclusion: The sanctioned scheme was accepted as a supporting factor for waiver of the pre-deposit requirement.

Final Conclusion: Interim protection was granted by waiving pre-deposit and the stay applications stood disposed of, while the appeals were left for final hearing.

Ratio Decidendi: In interim excise proceedings, waiver of pre-deposit may be granted where procedural fairness is not properly addressed in remand adjudication and the surrounding rehabilitation scheme supports such relief, even though Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 does not itself govern pre-deposit under Section 35F of the Central Excise Act, 1944.

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