Pre-deposit waiver must be reasoned: authority must consider hardship and relevant factors before directing deposit.

A pre-deposit waiver order under Section 129E of the Customs Act must reflect objective consideration of prima facie case, financial hardship and other relevant factors; a personal hearing is not mandatory merely because discretion is involved, but the authority must show application of mind and give reasons. An order that refers only to the revenue's prima facie case and balance of convenience, without addressing undue hardship, is unsustainable because it affects the right of appeal. The impugned pre-deposit direction was therefore set aside and the waiver application was remitted for fresh decision in accordance with law.

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Issues: Whether the order directing pre-deposit under Section 129E of the Customs Act, 1962 was sustainable when it did not objectively consider undue hardship and the relevant factors bearing on waiver of deposit.

Analysis: A personal hearing on a waiver application is not mandatory merely because the authority has discretion under the pre-deposit provision. However, that discretion must be exercised objectively and on relevant considerations. The order impugned recorded only a prima facie view in favour of the revenue and referred to balance of convenience, but it did not address the assessee's claim of hardship or disclose application of mind to the twin considerations of prima facie case and financial hardship. A waiver order affecting the right of appeal must therefore be reasoned and must show due consideration of the material placed before the authority.

Conclusion: The order directing pre-deposit was unsustainable and was set aside. The matter was remitted to the Commissioner (Appeals) for a fresh decision on the waiver application.

Final Conclusion: The petitioner succeeded in having the impugned pre-deposit order quashed, and the waiver request was restored for reconsideration in accordance with law.

Ratio Decidendi: While a personal hearing on a pre-deposit waiver application is not indispensable, the authority must exercise its discretion objectively and pass a reasoned order showing consideration of undue hardship and the relevant case-specific factors.

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