Pre-deposit waiver requires factual hardship review; sick company proceedings do not create automatic exemption under excise law.

Pendency of proceedings under Section 16 of the Sick Industrial Companies (Special Provisions) Act, 1985 does not automatically waive the pre-deposit requirement under Section 35F of the Central Excises and Salt Act, 1944. The appellate authority must still assess undue hardship on the facts, consider whether a prima facie case exists, and balance any dispensation against the need to safeguard revenue. Section 22 of the sick company law stays certain proceedings, but it does not create a blanket exemption from procedural conditions under the excise law. The waiver decision remains a discretionary exercise based on the statutory facts.

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Issues: Whether pendency of an inquiry under Section 16 of the Sick Industrial Companies (Special Provisions) Act, 1985 automatically requires waiver of pre-deposit under Section 35F of the Central Excises and Salt Act, 1944, and whether the appellate authority must still examine undue hardship and the need to safeguard revenue.

Analysis: Section 35F confers a general rule of pre-deposit, with a limited discretion to dispense with deposit where the authority forms an opinion that deposit would cause undue hardship and may impose conditions to protect revenue. Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 stays certain proceedings during pendency of the statutory process, but it does not by itself create an automatic exemption from the requirement of pre-deposit under the excise law. The special scheme of the sick company legislation, including the machinery under Sections 19 and 32, shows that concessions and financial relief are governed by a structured statutory process and do not operate as an automatic waiver of all procedural conditions under other enactments. The appellate authority was therefore required to examine hardship on the facts and also consider the existence of a prima facie case.

Conclusion: The answer is in the negative. Pendency of proceedings under Section 16 of the Sick Industrial Companies (Special Provisions) Act, 1985 does not automatically dispense with pre-deposit under Section 35F of the Central Excises and Salt Act, 1944; the authority must decide undue hardship on the facts of the case.

Final Conclusion: The order insisting on pre-deposit was set aside and the appeal was directed to be heard without any pre-deposit condition, on the facts of this case.

Ratio Decidendi: Section 22 of the sick industrial company legislation does not create an automatic waiver of statutory pre-deposit requirements; waiver under the excise statute depends on a factual finding of undue hardship and exercise of discretion to safeguard revenue.

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