ORDER A.R. Tiwari, J. 1. An erstwhile partnership firm M/s Rubber Products claims that it is now a proprietary concern owning a factory at village Sejvaya, District Dhar for manufacture of Rubber foam sheets and plywood. M/s. Dayal Laminates of Makai Nagia, manufacturer of paper surfaced Hard board and decorative laminate is said to be a private limited Company registered under the Companies Act. The department felt that M/s. Rubber Products an alleged proprietary concern owned by one R.N. Kapur is nothing but a front company i.e. M/s. Dayal Laminates (P) Ltd. owned by Sahebdass and Gurucharandas and that martrecious (sic) segregation has been designed in a ruse to earn eligibility of the exemption from payment of duty in terms of the Notification No. 175/86 dated 1-3-1986. 2. Pursuant to the report of the intelligence, the Central Excise Officers conducted simultaneous raid on 9th and 10th October, 1991 on the alleged two units and seized documents. After show clause notice and order of adjudication dated 16-7-1993 (Annexure P/14) is passed by respondent No. 3 imposing duty of Rs. 20,09487.1 and Rs. 73,631.65 under Section 9(2) of Central Excise Rules, 1944 read with Section 11A of Central Excises and Salt Act, 1944 besides penalty of Rs. 3,00,000/-. 3. Both the concerns preferred appeals registered as No. 2824/1993-D and 2825/1993-D against the Order No. 14/Collector/CE/93-l adj., dated 16-7-1993 Annexure P/14 passed by the Respondent No. 3 before Respondent No. 2. They filed therein application for waiver of predeposit of total duty-demand of Rs. 20,16,850/- besides penalty of Rs. 2 Lakh each on these concerns. 4. The respondent No. 2 by order dated 16-2-1994 (Annexure P/21) allowed the prayer in part and softened the rigour by directing these concerns to deposit in cash Rs. 8 Lakhs on or before 31-5-1994 for purpose of hearing appeals and for staying recovery of the amount as adjudicated and foisted. 5. Petition No. 852/94 (M/s Rubber Products, Indore) and Petition No. 853/94 (M/s Dayal Laminates Pvt. Ltd. Indore) have been filed impugning the order of assessment (Annex. P14) and order on application (Annexure P/21). 6. As the point is short. I heard the petitions finally at this stage. 7. 5. Petition No. 852/94 (M/s Rubber Products, Indore) and Petition No. 853/94 (M/s Dayal Laminates Pvt. Ltd. Indore) have been filed impugning the order of assessment (Annex. P14) and order on application (Annexure P/21). 6. As the point is short. I heard the petitions finally at this stage. 7. The counsel for the petitioners in both these petitions contended that existence of prima facie case in favour of the assessee is the dominant consideration in matter of grant of stay and waiver of pre-deposit and the respondent No. 2 has erred in holding that no prima facie case on merits has been made out for waiver of pre-deposit. It is urged that undernoted facts and features, relevant and vital, have not been adverted to and considered properly. (1) The demand in 92 in respect of alleged evasion of 1986 to 1991 is ex facie barred by limitation being not within 6 months. (2) Products of two concerns are not liable to be clubbed. And if these concerns are treated to be one, then how is that penalty was imposed separately ? (3) Benefit of Notification 175/86 dated 1-3-1986 was available and undeniable and as such no duty was payable. (4) The concerns are incurring losses and order causes 'undue hardship'. (5) Closure of concern since 1993 is in force on the strength of the orders of respondent No. 3. (6) Valuable right of appeal should not be seen to be frustrated by inability to deposit the amount. (7) Views expressed by Apex Court and various High Courts in this country sufficiently indicated that there existed a prima facie case. 8. The counsel has placed reliance on 1992 (61) E.L.T. 52 (M.P.) Kinetic Honda Motor Ltd. v. Union of India - 1993 (67) E.L.T. 216 (M.P.), Partap Steel Rolling Mills Ltd. v. CEGAT - 1993 (65) E.L.T. 161 (Del.), Eicher Motors Ltd. v. Union of India -1989 (44) E.L.T. 629 (Ker.), Excel Rubber Products v. Addl. Collector of C. Ex. & Customs - 1993 (48) ECR 272 (Tribunal), Kothari Products Ltd. v. Collector of Central Excise, Kanpur; to urge that order of pre-deposit is arbitrary and is not based on sound principles. 9. The counsel for the respondents have filed reply to the application and opposed the prayer and also substitution of Bank Guarantee. 10. The order dated 16-2-1994 (Annexure P/21) is a discretionary order. But discretion means a sound discretion. 9. The counsel for the respondents have filed reply to the application and opposed the prayer and also substitution of Bank Guarantee. 10. The order dated 16-2-1994 (Annexure P/21) is a discretionary order. But discretion means a sound discretion. Lord Mansfield in John Silks' case (1770) 4 Supp. 2528 stated in classic terms that discretion meant sound discretion governed by law and guided by rule. 11. Admittedly while deciding application under Section 35F of the Act the CEGAT is required to take into account two factors (a) prima facie case and (b) financial hardship. Here the principal issue is whether or not duty is payable at all and benefit of notification, granting exemption is available besides question of bar of limitation and whether or not products were liable to be clubbed. The point pressed into service to show prima facie case and financial hardship on the basis of closure and losses cannot be categorised as futile and do not appear to have been evaluated judiciously. Therefore all decisions tear up the tenebrosity and illuminate the path. On scrutiny of the order, as impugned, with reference to point and position as chronicled above and decisions as cited above, I thus find that the order is not resting on the linchpin of sound judicial principles and suffers from the vice of arbitrariness. Prima facie merit of the case seems to have been overlooked to some extent with the result that remedy is rendered to become promise of unreality. There can be no lis like law versus justice and as such there has to be harmony, not antinomy. The order thus needs to be modified. 12. I therefore dispose of both the petitions with directions as under :- (a) That respondent No. 2 will hear both the appeals on merits without insisting on pre-deposit of the amount as ordered. (b) That the petitioners shall furnish Bank guarantee for the amount equivalent to the amount which is ordered to be deposited in cash i.e. Rs. 8 Lakhs, within one month from today before respondent No. 2 as a pre-condition to the tenability of the appeal as held in Partap's case (supra). (c) The respondent No. 2 shall hear and decide the appeals on merits within a period of four months from today. (d) On Bank guarantee as above further proceedings in pursuance of order (Annex. 8 Lakhs, within one month from today before respondent No. 2 as a pre-condition to the tenability of the appeal as held in Partap's case (supra). (c) The respondent No. 2 shall hear and decide the appeals on merits within a period of four months from today. (d) On Bank guarantee as above further proceedings in pursuance of order (Annex. P/14) impugned in appeal shall remain stayed till disposal of the appeals. 13. The order (Annexure P/21) is thus modified in terms indicated with directions as above. 14. Both these petitions (M.P. No. 852/94 and M.P. No. 853/94) are thus allowed in part as above with no orders as to costs. 15. The original order shall be retained in the records of M.P. No. 852/94 and its copy shall be placed in the records of connected petition M.P. No. 853/94.