Pre-deposit discretion upheld where hardship factors were considered and the deposit was substantially reduced.

Pre-deposit for maintaining an appeal is a statutory condition, and waiver or reduction depends on a prima facie case, balance of convenience, financial burden, and undue hardship. Where the appellate authority has considered those factors and substantially reduced the deposit, the order will not be interfered with unless substantial hardship is shown. Here, the reduced pre-deposit was found to be a proper exercise of discretion and not arbitrary or illegal, so the challenge failed and interference was refused.

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Issues: Whether the order directing pre-deposit of Rs. 19,50,000 out of the disputed service tax demand under Section 35-F of the Central Excise Act as made applicable by Section 83 of the Finance Act called for interference on the ground of undue hardship and lack of consideration of the petitioner's financial burden.

Analysis: The requirement of pre-deposit is a statutory condition for entertaining the appeal. Waiver or reduction depends upon consideration of prima facie case, balance of convenience, financial burden, and undue hardship. The authority had considered these factors and reduced the deposit to about half of the demand. In the absence of any substantial hardship, the reduced pre-deposit could not be treated as arbitrary or illegal.

Conclusion: The challenge to the pre-deposit order failed and interference was not warranted.

Ratio Decidendi: Interference with a pre-deposit order is not justified where the appellate authority has considered the relevant hardship factors and exercised discretion to grant substantial reduction, unless substantial undue hardship is shown.

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