Redemption fine not covered by interim stay under Section 35F, but conditional relief for penalty may follow undue hardship.

Section 35F of the Central Excises & Salt Act, 1944 was read as empowering interim stay only for duty demanded or penalty levied, not for redemption fine. The request for stay against redemption fine was therefore refused, and inherent powers were not used to extend relief beyond the statute. On penalty, the appellant showed financial hardship by affidavit and the revenue did not rebut that position, so conditional interim protection was granted subject to a cash deposit and bank guarantee to safeguard revenue interests.

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Issues: (i) Whether stay could be granted against recovery of redemption fine under Section 35F of the Central Excises & Salt Act, 1944 or in exercise of inherent powers; (ii) whether stay against penalty could be granted on conditions in view of undue hardship.

Issue (i): Whether stay could be granted against recovery of redemption fine under Section 35F of the Central Excises & Salt Act, 1944 or in exercise of inherent powers.

Analysis: Section 35F empowers stay only in respect of duty demanded or penalty levied, and does not expressly provide for stay against redemption fine. The Court declined to extend the statutory power to redemption fine and found no justification to invoke inherent powers in the facts of the case.

Conclusion: Stay against recovery of redemption fine was refused and the request stood rejected.

Issue (ii): Whether stay against penalty could be granted on conditions in view of undue hardship.

Analysis: The appellant claimed financial hardship, supported the stay petition by affidavit, and the revenue produced no material to dispute the asserted financial position. The Court therefore considered it appropriate to grant interim protection against the penalty subject to safeguards for the revenue.

Conclusion: Stay against penalty was granted conditionally by requiring a cash deposit and a bank guarantee.

Final Conclusion: The application succeeded only in part, with relief confined to the penalty component and no interim relief granted for redemption fine.

Ratio Decidendi: In the absence of an express statutory provision, interim stay cannot be granted against redemption fine under Section 35F, though conditional stay against penalty may be granted where undue hardship is shown and revenue interests are safeguarded.

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