Undue financial hardship can justify waiver of pre-deposit, with the company treated as an independent legal person.

Undue financial hardship can justify waiver of the pre-deposit required for appeals under the proviso to Section 35-F of the Central Excise and Salt Act, 1944. The court accepted that the petitioner's financial position was unsound, that forcing deposit of the full disputed amount would cause grave hardship, and that the annual report and balance sheet supported the claim of losses. It also held that the presence of a multinational company as a major shareholder was irrelevant because the petitioner had to be treated as an independent legal person. Complete pre-deposit at the first appellate stage was therefore found unjustified, leading to partial relief in some appeals and no interference in others.

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Issues: Whether the conditions of pre-deposit imposed in the appeals under the proviso to Section 35-F of the Central Excise and Salt Act, 1944 should be waived on the ground of undue financial hardship.

Analysis: The applications for waiver disclosed that the petitioner's financial condition was unsound and that insistence on depositing the entire disputed amount would cause grave and irreparable hardship. The material placed on record, including the annual report and balance sheet, supported the plea that the company had suffered losses. The fact that a multinational company was a major shareholder was held irrelevant, as the petitioner had to be treated as an independent legal person. In the circumstances, complete pre-deposit was found unjustified at the first appellate stage.

Conclusion: The refusal to waive pre-deposit was interfered with in part, and relief was granted in respect of Appeal Nos. 423 and 424 by directing partial deposit and waiver of the balance; no interference was made for Appeal Nos. 425 and 426.

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