Judgment 1. This writ petition is filed by the two Companies, wherein the order passed by the Customs, Excise and Service Tax Appellate Tribunal (in short Tribunal) is questioned. The said order by the Tribunal seems to have been passed in appeals filed by the two petitioners and three others, who were connected with the Companies in their capacities as Managing Directors, etc. It seems that these appeals were filed against the order dated 26-09-2003 passed by the Commissioner of Central Excise, Meerut against the two petitioners inflicting a duty of Rs. 42,00,000/- in case of petitioner no. 1 and 24,00,000/- in case of petitioner no. 2. By the same order, 100% penalty was also inflicted besides separate penalties on the officers of the Companies, who were appellants nos. 3,4 and 5 in the appeals. The said duties have been inflicted on the ground that the manufacturing units have carried out clandestine production and removal of excisable goods (electric lamps) and have evaded central excise duty during the period 1997-1998 to 1999-2000. 2. A raid was conducted by the officers of the Central Excise Department at Dehradun on 20-01-2000, wherein the officers seized a large number of records and a thorough and deep investigation was made thereafter into the affairs of the Companies. In pursuance of that, show cause notice came to be issued on 15-03-2002 by the Commissioner, Central Excise, Meerut, which show cause notice in itself was a result of the thorough investigation made by the department. The petitioners were asked to show cause as to why the evaded excise duty should not be recovered from them and further why interest U/s 11AB and penalty U/s 11AC of Central Excise Act, 1944 read with Rule 173 Q of the Central Excise Rules, 1944 be not imposed upon them. After the petitioners were heard, an adjudication order came to be made on 26-09-2003 and by that order the proposed recoveries, penalties and interest were ordered by the Commissioner, Central Excise, besides the personal penalty against its officers. This order of the Commissioner was sought to be appealed against and the appellants prayed for the waiver of the requirement of pre deposit on the ground of their meritorious case as also undue financial hardship. This order of the Commissioner was sought to be appealed against and the appellants prayed for the waiver of the requirement of pre deposit on the ground of their meritorious case as also undue financial hardship. It was tried to be contended that so called sales of the excess goods were not excisable as those goods were not manufactured by the Companies or any of them, and the sales were only the trading activity on the part of the Companies. In support of their plea, a number of affidavits and certificates were filed before the Tribunal suggestion that in fact the goods alleged to have been sold, were beyond the manufacturing capacity of the appellants. 3. It was tried to be suggested that the Company was neck deep in debts and did not have a sound financial position. This plea was tried to be buttressed by filing the certificates of the Chartered Accountants, their affidavits as also the balance-sheets. The evidence was also produced in the shape of the notices to the companies for recovery from a number of financial institutions, like Banks, etc. and also notices of recovery of various taxes like Income Tax and Trade Tax. In short, the Companies pleaded acute paucity of funds and on that basis contended that the recoveries as ordered were bound to be stayed during the pendency of appeals under section 35 F proviso of the Act as the payment thereof was likely to result in undue hardship to them. 4. The Tribunal did not accept this plea altogether, but granted only the part relief by directing M/s Prestige Lights Ltd. to pre-deposit Rs. 20,00,000/- and M/s Pooja Luminaries Private Ltd. to pre-deposit Rs. 10,00,000/-. Six weeks time was granted by the Tribunal. Feeling aggrieved by that, the petitioners have come up before us claiming complete stay of these recoveries. 5. Learned Senior Counsel arguing on behalf of the petitioners painstakingly took us through the order passed by the Tribunal and assailed the same as a laconic, sketchy and a casual order. The contention is that from the language of the proviso 35 F of the Central Excise Act, 1944, it is evident that the Tribunal had the necessary discretion to waive completely or partly the precondition of depositing the duty claimed by the Commissioner. The contention is that from the language of the proviso 35 F of the Central Excise Act, 1944, it is evident that the Tribunal had the necessary discretion to waive completely or partly the precondition of depositing the duty claimed by the Commissioner. The learned counsel further argues that the Tribunal had practically given no reason as to why the discretion was not exercised in favour of the appellants before the Tribunal. The learned counsel argues that the thrust of the proviso was not on the merits of the claim of the appellants before the Tribunal, but on the 'undue hardship' caused to such appellants and if the deposit of the duty demanded or penalty levied, caused such 'undue hardship', then the Tribunal can dispense with the pre-deposit before the appeal is entertained. The learned counsel argues that the Tribunal in this case has not given any finding about the 'undue hardship'. To support the argument, the learned counsel points out that the precarious financial health of the appellants, which was supported by the affidavits of the Chartered Accountants and which remained un-countered, was enough for the discretion being shown in favour of the petitioners, completely exempting them from making pre-deposit of the duty demanded and the penalty imposed. According to the learned counsel, there is no finding given by the Tribunal on this very important aspect. 6. As against this, the learned counsel appearing for the Department asserted that it could not be said that the Tribunal was not alive to this aspect of undue hardship which is clear from the order. The learned counsel also points out that this was a case where the appellants had shown transactions with the non-existent firms and it was also clear from the finding given by the Commissioner that those, who were at the helm of affairs to run the Companies as Managing Directors etc. siphoned the funds of the Companies, and yet the Tribunal had given a substantial relief to the appellants, which is almost 50% of the liability of the appellants. 7. Before we examine the order of the Tribunal, it would be better to see the exact language of the Section 35F of the Central Excise Act, 1944: "35F. siphoned the funds of the Companies, and yet the Tribunal had given a substantial relief to the appellants, which is almost 50% of the liability of the appellants. 7. Before we examine the order of the Tribunal, it would be better to see the exact language of the Section 35F of the Central Excise Act, 1944: "35F. 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 the 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 the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interest of the revenue: Provided further that where an application is filed before the Commissioner (Appeals) for dispensing with the deposit of duty demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall where it is possible to do so, decide such application within thirty from the date of its filing." The whole thrust being on the proviso, which arms the Tribunal with the discretion to dispense with the deposit being made by the appellants of the demanded duty and the penalty, learned counsel for the appellants/petitioners was at pains to point out the fallen financial health of the Companies. He firstly pointed out from the balance-sheet that the petitioner Companies had more liabilities than the assets. It was pointed out that in support of the said balance-sheets, the affidavits of the Chartered Accountants were filed on the record which remained unchallenged. He also invited our attention to the various notices issued against the petitioner Companies for payment of Income Tax, Trade Tax and other taxes and contended that the Companies were not in a position to pay as a pre-deposit, the amounts ordered by the Tribunal and that the Tribunal had not considered these matters at all. 8. He also invited our attention to the various notices issued against the petitioner Companies for payment of Income Tax, Trade Tax and other taxes and contended that the Companies were not in a position to pay as a pre-deposit, the amounts ordered by the Tribunal and that the Tribunal had not considered these matters at all. 8. When we look on the order of the Tribunal, it is apparent that the Tribunal had considered the aspect of undue hardship by refusing to attach credibility to the claim of the financial hardship on account of the Companies being hemorrhaged of its funds by none else than the Managing Directors. That is clear cut expression to be found in the paragraph 4. Not only this, but the Tribunal had also perused the records and found that the offences alleged against the Companies were grave and that there were clandestine production and clearance of bulbs and evasion of duty, for which clandestine and fake sale of goods and receipts from the sale, were shown to and from, the non-existent parties. The criticism that the Tribunal had not at all considered this aspect cannot, therefore, be countenanced. In our opinion, the Tribunal was wholly justified in denying the total dispensation of the pre-deposit of the demanded duty and the penalty. In fact, the Tribunal had given a relief of more than 50% of the liability limiting it to 20,00,000/- (Rupees Twenty Lacs only) in case of the first petitioner and Rs. 10,00,000/- (Rupees Ten Lacs only) in case of the second petitioner. 9. A mere inability on the part of the Company to pay, is not contemplated in the proviso. What is required for the exercise of discretion, is not merely a 'financial hardship', but 'undue financial hardship'. The word 'undue' makes all the difference. Therefore, where it is shown that the finances of the Company were systematically siphoned of, leading to the Company facing financial debacle, it cannot be said that it is an 'undue hardship'. 10. 'Undue', which is an 'adjective', according to Blacks Law Dictionary, Seventh Edition 1999 means: "Archaic. Not yet owned; or currently payable as undue debt". It also means 'excessive or unwanted'. According to the Concise Oxford Engiish Dictionary, Tenth Edition 2002, 'undue' means: "Unwarranted or inappropriate because excessive or disproportionate". 10. 'Undue', which is an 'adjective', according to Blacks Law Dictionary, Seventh Edition 1999 means: "Archaic. Not yet owned; or currently payable as undue debt". It also means 'excessive or unwanted'. According to the Concise Oxford Engiish Dictionary, Tenth Edition 2002, 'undue' means: "Unwarranted or inappropriate because excessive or disproportionate". According to Webster's Third New International Dictionary, 'undue' means: "1: Not due: not yet payable (an debt or an bond). 2a : unsuited to the time, place or occasion: IMPROPER, INAPPROPRIATE, INOPPORTUNE (behaviour) : b : exceeding or violating propriety or fitness: EXCESSIVE, IMMODERATE, UNWARRANTED (desire for private profit - T.W. Arnold) (his sartorial equipment stops just short of elegance - Philip Hamburger). 3. "archaic: contrary to justice, right or law: UNLAWFUL". 11. The term 'undue hardship' is, however, not defined in any Law Dictionary. Reading the two words together the meaning would be 'unwarranted hardship'. Where, therefore, there appears to be a systematic effort to drain the coffers of the Company with a clear idea to enrich himself on the part of the Managing Director, the Tribunal would be justified in taking into consideration that aspect while holding that atleast the petitioners' companies could not plead an 'undue hardship' since that hardship was not warranted. The financial debacle faced by the Companies would undoubtedly be relevant, but that by itself is no reason; where such financial debacle is a part of systematic design to drain the Company and in the process to enrich the Managing Director himself, the plea of 'undue hardship', would not be available. In this behalf, it is apparent from the order and the findings that the so called trading activity claimed by these companies was a mere facade as a careful and deep investigation suggested that five concerns with whom, the said trading activity was shown to have been done, did not exist at all at their given addresses. The said five concerns were (a) M/s Ambay Trading Co., B-53, Yamnotri Complex, Ghaziabad; (b) M/s Jagdamba Trading Co., 42, Yamnotri Comples, 1st Floor, Ambedkar Road, Ghaziabad; (c) M/s Raj Enterprises, Niwari Road, Modi Nagar, Ghaziabad; (d) Mis Agrawal Trading Centre, 1-310, Govind Puram, Ghaziabad and (e) M/s K.P. Trading, Opp. Milk Dairy, Mohiuddinpur, Meerut (RUD No. 1422). The said five concerns were (a) M/s Ambay Trading Co., B-53, Yamnotri Complex, Ghaziabad; (b) M/s Jagdamba Trading Co., 42, Yamnotri Comples, 1st Floor, Ambedkar Road, Ghaziabad; (c) M/s Raj Enterprises, Niwari Road, Modi Nagar, Ghaziabad; (d) Mis Agrawal Trading Centre, 1-310, Govind Puram, Ghaziabad and (e) M/s K.P. Trading, Opp. Milk Dairy, Mohiuddinpur, Meerut (RUD No. 1422). It becomes apparent from the order that the first concern never dealt in the bulb but that firm had shown sale and purchase only of iron and steel scraps in' their trade tax return for 1997-98. There was no business transaction in the year 1998-99 and 1999-2000, and the registration of the company was also cancelled w.e.f. 09-06-1998. As regards the second concern, it was found that this concern had not filed any return. That concern was not found to be functioning at the given address and action for cancellation of their registration was initiated. This is apart from the fact that this concern when it was functioning used to deal with the machinery parts, sanitary goods and hardware goods. The same is the story about the third concern, which was also not found to have any business activities at the given address. Identical is the story about the fourth and fifth concern. The notices sent to these concerns by the Department were also returned in the absence of any such addressee being there at the said addresses. As if this is not sufficient, it becomes apparent that some goods received were shown to have been received by various transporters for the transport of goods, and the letters issued to such transporters in order to ascertain the veracity of the goods received (in case of six such transporters), were returned undelivered by the postal authorities due to non availability of the addressees. When the registration number of the vehicles mentioned in the aforementioned goods received were checked, they were not found to be commercial transport carriers, but of mopeds, scooters, motor cycles, tractor trolleys, cars and Government vehicles etc. Things do not stop there. In paragraph 3.8.1 of the order, it is pointed out that a cheque for Rs. 70,000/- (Seventy Thousand only) shown issued to M/s Ambey Trading Company, was actually reached the Managing Director Mr. M.K. Goel on its encashment. So also a cheque of Rs. 60,000/- (Rupees Sixty Thousand only) also found its way on being encahsed to Mr. In paragraph 3.8.1 of the order, it is pointed out that a cheque for Rs. 70,000/- (Seventy Thousand only) shown issued to M/s Ambey Trading Company, was actually reached the Managing Director Mr. M.K. Goel on its encashment. So also a cheque of Rs. 60,000/- (Rupees Sixty Thousand only) also found its way on being encahsed to Mr. M.K. Goel, the Managing Director. In paragraph 3.8.2, three more cheques worth Rs. 50,000/- (Fifty Thousand only), Rs. 50,000/- (Fifty Thousand only), Rs. 60,000/- (Sixty Thousand only), were also found to be shady transactions. Similar such examples are to be found in paragraph 3.8.3 for the cheques totaling Rs. 6,25,000/- (Six Lacs Twenty Five Thousand only). All this suggests that there was rampant falsification of accounts. In paragraph no. 8.2, a clear cut finding has been given that the purchased bills worth Lakhs of Rupees claimed by M/s Ambay Trading Company, from whom finished goods were supposed to have been purchased, was a fake transaction as the M/s Ambay Trading Company was a noncexistent firm. A careful study seems to have been made of the various ledger accounts of all these firms suggesting that firstly in the name of trading, the manufactured goods were stealthily removed and huge amounts were received in the personal accounts of those, who were at the helm of affairs of these appellants, such as Mr. M.K. Goel, Mrs. Sudha Goel, and Mr. A.K. Thapa. If this was the state of affairs, there would be no question of there being any 'undue hardship' on the part of the appellants so that a discretion could be exercised in their case, by giving them a total exemption. We were taken through the various affidavits to impress us that both these petitioners were heavily indebted and they are not in a position financially to pay the duties. None of the affidavits, however, can be read to undo the theory of siphoning of the funds. We are, therefore, convinced that this is not a case of total 'undue hardship' on the part of the petitioners. 12. Learned Senior Counsel thereafter referred to certain reported decisions. We shall now take stock of that argument. 13. The first such judgment is by the Kerala High Court Rubicon Vs. Collector of Central Excise reported in 1989 (44) E.L.T. 401 (Kerala). 12. Learned Senior Counsel thereafter referred to certain reported decisions. We shall now take stock of that argument. 13. The first such judgment is by the Kerala High Court Rubicon Vs. Collector of Central Excise reported in 1989 (44) E.L.T. 401 (Kerala). This judgment was pressed into service in order to buttress the contention that even if there is an allegation of clandestine removal of the goods from the factory premises, that by itself would be no reason to refuse the discretion under the proviso 35F of the Central Excise Act. Heavy reliance was placed on the observations in paragraph 8, where Court has observed that even if there is an admitted due, yet the Appellate Authority can dispense with the duty and penalty, if insistence of such deposit will cause 'undue hardship' to the appellant. This was, however, not a case where there was a systematic siphoning of the funds for enriching the authorities, like Managing Director. We have already pointed out that the whole plea of financial hardship becomes suspicious once it is seen that there is a systematic activity to cause wrongful loss to the Companies and wrongful gain to the authorities, like Managing Director. We hastened to add that we are not using these two terms as they are used in the Criminal Law. However, there can be no dispute that in this case, it is proved that the money which should have gone to the coffers of the Companies, have not actually been received by the Companies, but have gone to the greedy pocket of the Managing Director. 14. In the aforementioned decision, a decision reported in 1985 (2) E.L.T. 243 - U.P. Laminations Vs. Union of India, had been relied upon. So also a reference was made of a reported decision of Delhi High Court reported in 1987 (28) E.L.T. 61 - Uptron Powertronics Vs. Collector of Central Excise. In support of his argument that there was no attempt on the part of the Tribunal to enquire financial difficulties of the petitioner Companies and, therefore, the order refusing to exercise discretion was wrong, the learned counsel very heavily relied upon these two decision. We have no quarrel with these two decisions. However, it cannot be said that there was no enquiry into the financial status of the petitioner Companies. We have no quarrel with these two decisions. However, it cannot be said that there was no enquiry into the financial status of the petitioner Companies. The Tribunal has undoubtedly taken into account the affidavits and had come to the conclusion that those affidavits by themselves were not reliable in view of the proved irregularities in financial transactions. We are, therefore, not impressed by the argument at all that there should have been counter filed on behalf of the department to the above said claims made through the affidavits of the Chartered Accountants. In short, we do not find any merits in this writ petition and would choose to dismiss the same. 15. Writ petition is accordingly dismissed in the light of the above observations. However, under the circumstances, we desist from ordering any cost against the Petitioner companies.