Pre-deposit waiver under excise law depends on proven undue hardship, not sick company status alone.

Section 35F pre-deposit relief turns on whether the required deposit would cause undue hardship while still protecting revenue, and undue hardship means more than ordinary inconvenience. A sick company status under the Sick Industrial Companies (Special Provisions) Act, 1985 does not by itself justify waiver. On the financial materials, including sales and cash flow, the assessee did not show that the directed deposit would be disproportionate or oppressive. Reference to Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 did not change the stay position, and the pre-deposit direction was upheld.

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Issues: Whether the direction to pre-deposit Rs. 35 lakhs under Section 35F of the Central Excise Act, 1944 was liable to be interfered with on the ground of undue hardship and sickness of the assessee under the Sick Industrial Companies (Special Provisions) Act, 1985.

Analysis: The power under Section 35F is to be exercised on the basis of whether deposit would cause undue hardship, while also safeguarding the interest of revenue. Undue hardship is more than ordinary inconvenience and must be shown to be disproportionate to the requirement of deposit. The assessee's status as a sick company does not by itself mandate waiver of pre-deposit. The financial materials on record, including substantial sales and cash flow, did not establish that deposit of the directed amount would cause such hardship. The reference to Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 did not alter the position in the stay application.

Conclusion: The direction to deposit Rs. 35 lakhs was upheld and no interference was called for.

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