Pre-deposit waiver in excise appeals turns on arguable merits and financial hardship; partial deposit was unjustified.

Pre-deposit under Section 35F of the Central Excises and Salt Act, 1944 was held unwarranted where the assessee showed a prima facie arguable case on excisability and dutiability and the record indicated financial hardship. The Tribunal had already treated the dispute as one requiring determination on merits, and the hardship plea was not properly addressed before directing a partial deposit. In these circumstances, the statutory discretion to waive pre-deposit ought to have been exercised in favour of the assessee, and exemption from any deposit was justified.

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Issues: Whether the appellate authority was justified in directing pre-deposit of part of the excise duty demand under Section 35F of the Central Excises and Salt Act, 1944, or whether the assessee was entitled to waiver on the ground of undue hardship.

Analysis: The assessee showed that the Tribunal itself had treated the dispute on excisability and dutiability as one requiring consideration on merits, indicating an arguable case. The financial materials before the Tribunal reflected that the petitioner was not in a comfortable position, and the order directing partial deposit did not adequately address the plea of hardship. In such circumstances, the statutory discretion to dispense with pre-deposit ought to have been exercised in favour of the assessee.

Conclusion: The order requiring pre-deposit was unjustified and the assessee was entitled to exemption from making any deposit under Section 35F.

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