Pre-deposit waiver for a sick industrial unit may be limited, with partial relief allowed only on undue hardship grounds.

A sick industrial unit under BIFR is not automatically entitled to complete waiver of pre-deposit under the appellate pre-deposit provision. The statutory condition attached to the right of appeal continues to apply, but the tribunal may reduce the deposit where insisting on full payment would cause undue hardship. On the facts noted, total waiver was declined and only partial dispensation was granted, with a deposit condition imposed for the balance amount. The principle applied is that sickness status may support relief, but it does not by itself override the pre-deposit requirement.

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Issues: Whether the pre-deposit of duty under section 35F could be dispensed with in view of the assessee being declared a sick industrial unit under the Sick Industrial Companies (Special Provisions) Act, 1985, and whether partial waiver was justified on the ground of undue hardship.

Analysis: The demand for stay arose in an application for waiver of pre-deposit, not in a recovery proceeding. The mere fact that the unit was under BIFR did not by itself exempt the assessee from the statutory condition attached to the right of appeal. At the same time, the Tribunal found that insisting on deposit of the entire duty amount would cause undue hardship. Balancing the statutory requirement with the financial condition of the unit, the Tribunal held that partial dispensation was appropriate.

Conclusion: The request for complete waiver was rejected, but pre-deposit was dispensed with to the extent of the balance amount on condition that the assessee deposit Rs. 1,25,000 within the stipulated time.

Final Conclusion: The appeal was allowed only to a limited extent by granting partial relief from pre-deposit, while maintaining the statutory condition as to the remaining amount.

Ratio Decidendi: A declaration that an industrial unit is sick does not automatically entitle it to total waiver of pre-deposit, and the Tribunal may grant only such dispensation as is justified by undue hardship under the governing pre-deposit provision.

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