Pre-deposit waiver under excise law turns on overall liquidity and undue hardship, not cash in hand alone.

Dispensation of pre-deposit under Section 35F depends on proof of undue hardship, assessed with reference to the assessee's overall financial position and the balance of convenience. Liquidity is a relevant factor, but it must be judged by examining current assets, liabilities, cash in hand, bank balances, stock, debtors, and other convertible assets, not cash alone. Where the assets and liquidity position do not justify complete relief, only partial waiver may be granted. In the stated matter, total waiver was refused and the assessee was required to deposit a portion of the disputed duty, while the remaining duty deposit and the penalty deposit were waived.

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Issues: Whether the appellant-company was entitled to waiver of the entire pre-deposit under Section 35F of the Central Excises and Salt Act, 1944, in view of alleged undue hardship and its liquidity position.

Analysis: The application turned on the proviso to Section 35F, under which pre-deposit may be dispensed with wholly or partly if undue hardship is shown and the interests of revenue are safeguarded. The Tribunal treated liquidity as a relevant component of undue hardship and held that the assessment must be made on the basis of the company's overall financial position, including current assets, liabilities, cash-in-hand, cash in bank, stock, debtors, and other convertible assets, rather than cash alone. It also weighed the balance of convenience and the competing prejudice to both sides, noting that the assets were not as weak as projected and that complete waiver was not justified.

Conclusion: The Tribunal held that the appellant-company was not entitled to total waiver of pre-deposit. It was directed to deposit 25% of the disputed duty amount, while pre-deposit of the balance duty and the penalty amount was waived.

Final Conclusion: Interim relief was granted only in part, with conditional dispensation of pre-deposit limited to a portion of the duty demand and full waiver of the penalty deposit.

Ratio Decidendi: For dispensation of pre-deposit under Section 35F, undue hardship must be assessed on the assessee's overall liquidity and the balance of convenience, not merely on cash-in-hand.

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