Pre-deposit discretion must be exercised reasonably, with instalments allowed to avoid undue hardship while preserving the appeal condition.

The Tribunal was entitled to require pre-deposit as a condition for entertaining the appeal, and it had considered the assessee's prima facie case, but insisting on a single lump-sum payment caused undue hardship on the facts. The statutory condition was therefore maintained while the mode of compliance was relaxed by permitting payment in instalments, so that the appeal could proceed after compliance. The ruling confirms that discretion over pre-deposit must be exercised reasonably and may be adjusted to avoid hardship without dispensing with the requirement itself.

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Issues: Whether the appellate tribunal's order directing pre-deposit under the proviso to Section 35F of the Central Excises and Salt Act, 1944 called for interference on the ground of undue hardship.

Analysis: The Tribunal had jurisdiction to insist upon a pre-deposit while entertaining the appeal under Section 35B, and it had taken into account the petitioner's prima facie case. However, the direction to deposit the entire amount of one crore rupees in a single lump sum was found to cause undue hardship on the facts of the case. The appropriate course was to preserve the pre-deposit requirement while easing the manner of compliance by permitting instalments.

Conclusion: The pre-deposit requirement was modified by permitting payment of one crore rupees in four equal instalments, and the appeal was to be heard after compliance. The relief was therefore in favour of the assessee only to that limited extent.

Final Conclusion: The writ petition succeeded only to the extent of rescheduling the pre-deposit, while the Tribunal's requirement of pre-deposit itself was maintained.

Ratio Decidendi: Where pre-deposit is required as a condition for hearing an appeal, the authority's discretion must be exercised reasonably and may be moulded to avoid undue hardship without removing the statutory condition altogether.

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