Pre-deposit under excise law upheld where undue hardship was not shown and BIFR protection did not apply on the facts.

Pre-deposit relief under section 35F was not warranted because the assessee failed to show concrete financial incapacity or undue hardship, and the recorded funds position supported the Commissioner (Appeals)' discretion to require deposit. The writ court also held that Regulation 22 of the BIFR framework did not apply on the facts, as no recovery proceedings were shown and the disputed excise dues were not established as part of a sanctioned rehabilitation package. The challenge to the pre-deposit direction therefore failed.

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Issues: (i) Whether the Commissioner (Appeals) was justified in directing pre-deposit of 50 per cent of the disputed excise duty under the dispensation power under section 35F. (ii) Whether the petitioner could resist the pre-deposit direction on the ground that it was a sick industrial company protected by Regulation 22 of the BIFR Regulations.

Issue (i): Whether the Commissioner (Appeals) was justified in directing pre-deposit of 50 per cent of the disputed excise duty under the dispensation power under section 35F.

Analysis: The material before the Court showed that the petitioner had substantial receipts and liquid funds, while the amount directed to be deposited was comparatively small. The stay-cum-waiver application did not disclose concrete financial incapacity or establish that deposit of the amount would cause undue hardship. In proceedings under Article 226, interference with an interlocutory pre-deposit order is warranted only in exceptional cases.

Conclusion: The pre-deposit direction was justified and no interference was called for.

Issue (ii): Whether the petitioner could resist the pre-deposit direction on the ground that it was a sick industrial company protected by Regulation 22 of the BIFR Regulations.

Analysis: The Court noted that no recovery proceedings were being pursued against the petitioner and that the record did not show that the excise dues in question formed part of any sanctioned rehabilitation package. The protection under Regulation 22 was therefore not attracted on the facts of the case.

Conclusion: The BIFR-based objection failed and did not entitle the petitioner to relief.

Final Conclusion: The challenge to the pre-deposit order failed, and the writ petition was not maintainable for interference with the Commissioner (Appeals)' exercise of discretion under the facts found.

Ratio Decidendi: Relief against a pre-deposit order under section 35F is not warranted where the assessee fails to establish undue hardship, and BIFR protection under Regulation 22 applies only where recovery is actually sought against dues covered by a sanctioned rehabilitation package.

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