High Court upholds Tribunal's pre-deposit order, stresses proof of financial hardship. Compliance crucial for appeal.

The High Court dismissed the petition challenging the Tribunal's order on pre-deposit but extended the time for payment. The Court emphasized the necessity of proving financial hardship with proper evidence, which was lacking in this case. The Tribunal's decision to reduce the pre-deposit amount was upheld, highlighting the importance of establishing financial hardship through pleading and evidence for such matters. Compliance with the extended deadline would allow the appeal to proceed based on its merits.

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Issues:
Challenge to order of Customs, Excise & Service Tax Appellate Tribunal on pre-deposit for entertaining appeal.

Analysis:
The petitioner challenged an order by the Tribunal directing a pre-deposit of Rs. 50 lakhs against a duty demand of Rs. 4.41 Crores. The Tribunal found no error in its order, considering the petitioner's claim of the demand not being sustainable and a strong prima facie case. Despite acknowledging the need for further consideration, the Tribunal reduced the pre-deposit amount based on the facts of the case, which was less than 20% of the principal tax demand.

The High Court noted that the petitioner did not establish financial hardship before the Tribunal. While the petitioner raised the issue during arguments, the Tribunal found no supporting evidence in the pleadings. The Court emphasized that financial hardship must be both pleaded and proven, and in the absence of specific pleading and evidence, the Tribunal could not consider any alleged financial hardship in determining the pre-deposit amount.

Considering the overall facts and circumstances, the High Court dismissed the petition but extended the time for making the pre-deposit until a specified date. Compliance with this directive would enable the Tribunal to hear the appeal on its merits. The Court found no grounds to entertain the petition, affirming the Tribunal's decision on the pre-deposit amount and emphasizing the importance of establishing financial hardship through proper pleading and evidence in such matters.

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