Pre-deposit waiver for a sick public sector company was granted in full after financial hardship was shown.

In the facts stated, pre-deposit under Section 35F of the Central Excise Act, 1944 could not be insisted upon without considering pleaded financial hardship where the assessee was a wholly owned Central Government company declared sick and proceedings were pending before the BIFR. The appellate authority's refusal to grant full waiver was treated as an erroneous exercise of discretion. Full waiver of the pre-deposit was directed, and the appeal was to be heard on merits without insisting on deposit.

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Issues: Whether, in the facts of the case, the appellate authority ought to have waived the pre-deposit under Section 35F of the Central Excise Act, 1944 in view of the assessee being a sick company under consideration before the BIFR.

Analysis: The assessee had asserted financial hardship on the ground that it was a wholly owned Central Government company declared sick and that proceedings were pending before the BIFR. In such circumstances, the requirement of pre-deposit could not be insisted upon without considering the pleaded hardship. The refusal to grant full waiver was found to be an erroneous exercise of discretion.

Conclusion: The pre-deposit was directed to be waived in full, and the appeal before the appellate authority was to be heard without insisting on deposit.

Final Conclusion: The assessee obtained complete relief from the pre-deposit condition, and the matter was directed to proceed before the appellate authority on merits with expedition.

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