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Challenge to order of Commissioner (Appeals) regarding pre-deposit of adjudicated dues under Section 35F. Analysis: The judgment involves two petitions challenging a common order passed by the Commissioner (Appeals) concerning the pre-deposit of adjudicated dues under the proviso to Section 35F. The petitioners had availed Modvat credit for inputs sent for job work outside the factory but not received back within the prescribed period. The Asstt. Collector demanded dues from the petitioners, leading to first appeals before the Commissioner (Appeals). Under Section 35F, an appeal cannot be entertained without depositing the adjudicated dues, but the proviso allows the appellate authority to waive pre-deposit partially if undue hardship is established. The petitioners applied for waiver, and the Commissioner directed them to deposit reduced amounts, considering the merits of their cases. The petitioners did not plead financial hardship before the appellate authority, although they had applied for time extensions that were not granted. The adjudication orders denied Modvat credit due to the goods not being received back within the stipulated period, without specifying if and when the goods were actually returned. The Commissioner only partially waived the pre-deposit, prompting the court to intervene. Given the technical nature of the default and the circumstances, the court found that a substantial part of the demand should have been waived under the proviso to Section 35F. Consequently, the writ petitions were allowed, modifying the Commissioner's order. One petitioner was directed to deposit Rs. One lac within a month, while the other was to deposit Rs. 2,50,000 within the same period. Upon depositing these amounts, the pre-deposit condition for the remaining balance would be dispensed with.
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