Pre-deposit discretion under excise law must balance undue hardship with revenue protection and preserve the right of appeal.

Discretion under the proviso to Section 35F on pre-deposit must be exercised to prevent undue hardship while preserving the right of appeal and protecting revenue interests. Where the record shows financial distress, including running losses and accumulated losses, requiring a substantial deposit may be unjustified if it effectively burdens the appeal remedy. The proper approach is to balance the assessee's hardship against revenue protection and, where warranted, reduce the deposit condition rather than impose a strong fetter on appellate access.

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Issues: Whether the order directing pre-deposit of a substantial part of the excise demand under Section 35F was justified in the circumstances, and what amount, if any, should be required to be deposited having regard to undue hardship and the right of appeal.

Analysis: The petitioner's financial position was relevant to the exercise of discretion under the proviso to Section 35F, which permits dispensation or relaxation of pre-deposit where deposit would cause undue hardship. The impugned order itself recorded that the unit was running in losses and had accumulated losses, yet the appellate authority still required a deposit of a large portion of the demand. The condition of pre-deposit has to balance the right of appeal with the interests of revenue and should not operate as a strong fetter on the appeal remedy.

Conclusion: The direction to deposit about two-thirds of the demand was not justified, and the petitioner was required to pre-deposit only Rs. 50,000 in cash, upon which the remaining pre-deposit condition stood dispensed with.

Final Conclusion: The writ petition succeeded to the extent that the pre-deposit burden was substantially reduced, and the appellate remedy was preserved without imposing an excessive hardship.

Ratio Decidendi: The discretion to waive or reduce pre-deposit under the proviso to Section 35F must be exercised to avoid undue hardship and to ensure that the condition does not effectively stifle the right of appeal while still safeguarding revenue interests.

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