Pre-deposit under excise appeal law must account for undue hardship and may be reduced where financial stringency is shown.

Under the pre-deposit regime in Section 35F of the Central Excises and Salt Act, 1944, the appellate authority must examine the appellant's asserted undue hardship before insisting on deposit as a condition for admission of the appeal. A pending refund claim, although not part of the appeal itself, may still be a relevant circumstance when assessing financial stringency and whether the deposit requirement should be diluted. The authority may therefore require only a part-deposit where the circumstances justify relief from full cash deposit; in the stated facts, a 50% pre-deposit was treated as appropriate.

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Issues: Whether, in considering the requirement of pre-deposit for admission of the appeal, the Tribunal was bound to examine the petitioner's plea of undue hardship based on a pending refund claim and could require only a part-deposit.

Analysis: The refund claim itself did not form part of the appeal before the Tribunal, but the proviso to Section 35F of the Central Excises and Salt Act, 1944 required consideration of the circumstances shown by the appellant to cause undue hardship before insisting on deposit as a condition precedent. The petitioner's asserted financial stringency, linked to an unresolved refund claim, was a relevant circumstance that ought to have been considered while deciding whether the statutory pre-deposit should be diluted or dispensed with. In the circumstances, directing deposit of only 50% of the demanded amount was appropriate.

Conclusion: The Tribunal was required to consider undue hardship and could not insist on full cash deposit without examining the petitioner's plea; a reduced pre-deposit of 50% was warranted.

Ratio Decidendi: While imposing a pre-deposit condition under Section 35F of the Central Excises and Salt Act, 1944, the appellate authority must consider the appellant's shown circumstances of undue hardship and may suitably dilute the deposit requirement.

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