The requirement of pre-deposit under Section 35F of the Central Excise and Salt Act, 1944 can be waived if the applicant establishes a prima facie case in their favor and the balance of convenience lies in their favor.

( 1 ) THE issue involved in the present writ petition relates to deposit of the amount of impugned demand as a condition precedent to hearing of appeals before the Collector (Appeals ). The facts leading to the filing of this petition are that during the relevant period of 31-7-87 to 6-1-88, i. e. the period covered by the impugned order of the Assistant Collector, dated 28-11-89, motorcycle were cleared ex-factory for sales in the wholesale price which was available with the respondent within the meaning of sec. 4 (l) (a) of the Central Excise and Salt Act. 1944 (hereinafter referred to as the Act ). Apart from the ex- factory sales on wholesale price, the petitioners also sold motor- cycles in retail through their depot in Ghaziabad and in some cases from the factory to various customers all over India. The petitioners case is that once the ex-factory wholesale price is available. the same would be applicable to all clearances made from the factory and, therefore, it is not permissible in law to determine the assessable value with regard the sales in retail on a different basis. In other words, the assessable value in respect of the sales made in retail would also be the same as the assessable value for sales made in wholesale ex-factory.

( 2 ) AS regards the subsequen period covered by the Assistant Collector s order dated 30-11-89, i. e. period from 7-1-88 to 10-9-89, holding that the normal wholesale price applicable for U. P. State should be the wholesale price charged from dealers of UP which is in excess of declared wholesale price under Section 4 (l) (a) of the Act, the party was directed to file a separate price list of wholesale price for sales in UP State. The further case of the petitioners is that w. e. f. 22-6-88, they had made sales to UP dealers from their Ghaziabad depot after stock transfers from the factory at Delhi to its depot at Ghaziabad, and when the ex-factory prices are available, the same should be taken as assessable value as against ex-depot prices also.

( 3 ) IN compliance of the aforesaid orders of the Asstt, Collector, the Superintendent issued a demand order for a sum of Rs. 69,59,353. 29p. , the alleged duty short paid for the period August, 1987 to October, 1989.

( 4 ) AGGRIEVED from the said orders of the Assistant Collector, me petitioner preferred two appeals before the Collector (Appeals) together with the applications for stay of deposit of demands pending hearing of appeals and for issuance of appropriate directions. The contention of the petitioners is that respondent no. 2 is not even prepared to give a hearing either on the stay applications or on the appeals while respondent no. 3, i. e. Assistant Collector of Central Excise, Ghaziabad, is pressing hard for immediate payment of the demand. The respondents are also refusing to permit the petitioner to clear the motorcycles on the basis of the assessable value claimed by the petitioners, and this has seriously affected their business. In view of the illegal action of the respondents, and the denial of even a hearing of the stay applications and the appeals, filed before the Collector (appeals), the petitioners invoked the jurisdiction of this court for the issuance of an appropriate writ, order or direction for the quashing the orders of the Assistant Collector dated 28-11-89 and 30-11-89 and also for quashing the demand order of the Superintendent dated 13-3-90 for a stum of Rs. 69,59,353. 29 and also for the disposal of their applications and appeals pending before the Collector.

( 5 ) AT the preliminary hearing, on 2nd May, 1990, the Division Bench issued a show cause notice to the respondent, limited to the question as to why the application for stay u/s 35f of the Act should not be disposed of. Later on, on 23-5-90. in the presence of cunsel for the parties, the Bench passed the following order :-

"the Collector of Central Excise (Appeals), respondent No. 2, will decide the petitioners application for stay u/