Pre-deposit waiver discretion must consider a prima facie case and conflicting Tribunal rulings when assessing undue hardship.

The proviso to Section 35F of the Central Excises & Salt Act, 1944 gives the Tribunal a judicial discretion to waive pre-deposit, and that discretion must be exercised on relevant factors. A prima facie arguable case on merits is material in assessing undue hardship, especially where conflicting Tribunal Bench decisions on the same legal question cast doubt on the order under challenge. The presence of two contradictory decisions was treated as showing that the appeal was not frivolous, so the Tribunal was required to reconsider the waiver request in light of that aspect.

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Issues: Whether the Appellate Tribunal should reconsider dispensing with pre-deposit under the proviso to Section 35F of the Central Excises & Salt Act, 1944 on the ground that the appeal disclosed a prima facie arguable case and that insistence on deposit would cause undue hardship.

Analysis: The proviso to Section 35F confers a discretionary power on the Tribunal to waive or dispense with pre-deposit, and that discretion must be exercised judicially on relevant factors. Existence of a prima facie case on merits is a material consideration in assessing undue hardship, especially where conflicting decisions of different Tribunal Benches on the same legal question create a substantial doubt about the correctness of the order appealed against. The Court treated the presence of two contradictory decisions as sufficient to show that the appeal was not frivolous and that the Tribunal ought to have considered that aspect while dealing with the request for waiver.

Conclusion: The petitioner was entitled to a reconsideration of the request for waiver of pre-deposit, and the Tribunal was directed to re-examine the prayer in light of the observations made.

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