TMI Blog2004 (3) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... of recovery thereof. In appeal No. 2692, the application E/Stay-1794/2003 was taken out while in appeal No. 2693/2003, application E/Stay-1795/2003 was taken out by the petitioners for waiver of pre-deposit of duties and penalties and stay of recovery thereof. The case for waiver of pre-deposit of duties and penalties was sought to be set up by the petitioners on the ground that they have prima facie case and if waiver of pre-deposit was not granted, that would cause undue hardship as their accumulated losses as on 31st March, 2002 amounted to ₹ 4400.92 lacs. The accumulated losses, according to the petitioner far exceed paid up capital of ₹ 100 lacs and reserves of ₹ 1109.93 lacs. Besides that, it was submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the petitioners under Section 35B of the Central Excise Act, 1944. Section 35F of the Act of 1944 reads thus -- 35F. Deposit, pending appeal of duty demanded or penalty levied, --Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of central excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied; Provided that where in any particular case, the [Commissioner (Appeals)] or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct the appeal. See, in this connection, the observations of this Court in respect of Section 129 prior to substitution of Chapter XV by the Finance Act, 1980 in Navin Chandra Chhotelal v. Central Board of Excise and Customs, . The proviso, however, gives power to the Appellate Authority to dispense with such deposit unconditionally or subject to such conditions in cases of undue hardships. It is a matter of judicial discretion of the Appellate Authority. 8. The aforesaid observations, in our opinion, have no application to the instant case. Here the right that was granted, was a right held with a condition. There was no question of change of that right. In the instant case the only substantive right is the right of appeal as contemplated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al to dispense with such deposit unconditionally or subject to such conditions in cases of undue hardship, though discretionary, must be exercised on the relevant materials, honestly, bona fide and objectively. Obviously the party applying for dispensation of pre-deposit must not only show the prima facie cases in this favour but must also to establish undue hardship show that the particular burden which he is required to observe or perform is out of proportion to the nature of the requirement itself and the benefit which the applicant would derive from compliance with it. This is what was said by Delhi High Court in Amrit Banaspati Co. Ltd. v. Union of India, 2003(151)E.L.T. 496 (Del). 7. Section 35F of the Act deals with deposit pendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the applicant would derive from compliance with it. 9. We find ourselves in respectful agreement with the aforesaid view of Delhi High Court. 10. Now we turn to the impugned order. The Tribunal observed that couple of issues raised in the appeal were debatable and required to be gone into. Yet it observed that the applicants have not made out a strong prima facie case in their favour for the Tribunal to waive pre-deposit of duty and penalty fully. This is not a proper approach for consideration of application under Section 35F. What is required to be made out by the applicant for dispensation of pre-deposit wholly or partly is to show that prima facie case exists in this favour in the appeal. Besides that, the applicants are req ..... X X X X Extracts X X X X X X X X Extracts X X X X
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