Excise appeal pre-deposit can be replaced by bank guarantee where genuine hardship and revenue protection are shown.

Pre-deposit conditions for excise appeals may be modified where the assessee shows genuine financial hardship and the revenue can be protected by adequate security. In this matter, the appellate authority had required deposit of half the adjudicated demand and dismissed the appeals on non-deposit. The Court noted reversal of credit entries for two consignments and an FIR under investigation for the third, and found that a balanced approach was warranted because no amount might ultimately be found payable. The pre-deposit requirement was therefore substituted with a bank guarantee to the satisfaction of the appellate authority, and the appeals were directed to be heard and decided on merits expeditiously.

---

---

Issues: Whether the pre-deposit condition imposed for hearing the excise appeals should be modified in view of the assessee's claimed financial hardship, with protection of the revenue secured by a bank guarantee.

Analysis: The adjudication involved demands of central excise duty and penalties arising from diversion of export goods to home consumption. The appellate authority had required deposit of 50% of the adjudicated amount, and on non-deposit the appeals were dismissed. The Court found that the assessee was facing genuine hardship, that credit entries in respect of two consignments had been reversed, and that in relation to the third consignment an FIR had been registered and was under investigation. In these circumstances, the Court held that the matter warranted a more balanced approach, since the possibility remained that nothing might ultimately be found payable, while the revenue could still be safeguarded by appropriate security.

Conclusion: The pre-deposit requirement was modified and substituted by a bank guarantee to the satisfaction of the appellate authority, and the appeals were to be heard and decided on merits expeditiously.

---