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Issues: Whether the Tribunal was justified in insisting on pre-deposit by requiring a bank guarantee under Section 35F of the Central Excises and Salt Act and in dismissing the appeal for non-compliance, despite the assessee's pleaded financial hardship.
Analysis: The assessee had been found by the Tribunal itself to be under undue hardship, with a small unit, continued losses, closure of the factory, and inability to furnish a bank guarantee of the required amount. The condition imposed in substance required the assessee to secure a cash equivalent with the bank, which was inconsistent with the finding of hardship. The repeated refusal to relax the condition, followed by dismissal of the appeal for non-compliance, effectively defeated the statutory right of appeal.
Conclusion: The requirement of pre-deposit by way of bank guarantee was not justified on the facts, and the dismissal of the appeal for non-compliance was unsustainable. Relief was granted in favour of the assessee by dispensing with pre-deposit and directing disposal of the appeal on merits.
Ratio Decidendi: Where the appellate authority records undue hardship and the appellant is financially incapable of complying, a pre-deposit condition should not be enforced in a manner that frustrates the statutory right of appeal.
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