Pre-deposit waiver and sick-unit status under excise law did not bar recovery; partial deposit was still required.

Waiver of pre-deposit under Section 35F was considered on the basis of undue hardship, but the company's plea of financial sickness did not justify complete relief. Documentary material and admissions showed no prima facie infirmity in the duty demand, and the fact that the unit was sick under the Sick Industrial Companies (Special Provisions) Act, 1985 did not bar recovery where it remained a working concern and had recovered substantial dues. Section 22 of the SICA was treated as not prohibiting duty recovery in the manner sought. Complete waiver was refused; partial waiver was granted subject to a pre-deposit, with the balance stayed pending appeal.

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Issues: Whether waiver of pre-deposit under Section 35F of the Central Excises & Salt Act, 1944 was justified in view of the company's plea of financial hardship and sickness under the Sick Industrial Companies (Special Provisions) Act, 1985.

Analysis: The proceedings were based on documentary evidence, including private records showing discrepancies and manipulation in the record of Bagasse used. The admissions on record and the material relied upon by the lower authority disclosed no prima facie infirmity in the demand. For waiver of pre-deposit, the statutory test under Section 35F required consideration of undue hardship. The fact that the company had been declared a sick unit did not bar a pre-deposit, particularly when it remained a working concern and had recovered substantial outstanding dues. Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 was held not to prohibit recovery of duty in the manner claimed.

Conclusion: The prayer for complete waiver was rejected. The company was directed to pre-deposit Rs. 10,00,000 towards duty, and the balance of duty and penalty was waived and recovery stayed pending appeal. The individual applicants were similarly granted partial waiver on condition of depositing specified amounts towards penalty.

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