Pre-deposit waiver requires prima facie merit and hardship; sick-industry status alone does not justify full exemption.

Full waiver of pre-deposit was declined where the Tribunal treated prima facie merits and financial hardship as the governing factors for waiver, but found no strong prima facie case on the facts. The unit's sickness declaration and BIFR pendency were held insufficient by themselves to dispense with pre-deposit, because the sick-industry protection under Section 22 was not treated as covering such obligations. Allegations of clandestine removal, parallel invoices, and record discrepancies weighed against the appellant, and financial hardship was not accepted as enough for complete waiver. Deposit of 50% of the duty demand was directed, with waiver only for the balance.

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Issues: Whether the appellant was entitled to full waiver of pre-deposit under Section 35-F of the Central Excise Act, 1944 on the ground of prima facie case, financial hardship, and declaration as a sick industry.

Analysis: The Tribunal held that the governing consideration under Section 35-F is the prima facie merits of the appeal, along with financial hardship and other relevant factors. The declaration of the unit as a sick industry and pendency before the BIFR was held to be no ground by itself for dispensing with pre-deposit, particularly in view of the law that Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 does not cover such pre-deposit obligations. On the facts, the case involved clandestine removal, parallel invoices, and discrepancies in records, and the appellant was found to have no strong prima facie case. Financial hardship was not accepted as sufficient to justify full waiver.

Conclusion: Full waiver of pre-deposit was rejected. The appellant was directed to deposit 50% of the duty demand, and waiver was granted only for the balance amount.

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