Pre-deposit waiver requires consideration of prima facie merits, hardship and financial position before insisting on deposit.

Pre-deposit under the appellate provision is discretionary where insisting on payment would cause undue hardship, and the authority must consider the appeal's prima facie merits, the appellant's financial position, and other relevant circumstances before deciding waiver. An order that directs deposit without addressing these material factors, or the assessee's contention that duty and interest were already paid and that the penalty issue required merits-based reconsideration, is unsustainable. The pre-deposit order was set aside and the matter was remanded for fresh consideration of the waiver application after hearing both sides and deciding it on merits.

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Issues: Whether the order directing pre-deposit of the disputed amount, without considering the merits of the stay application and the assessee's prima facie case, was sustainable.

Analysis: The requirement of pre-deposit under the applicable appellate provision is discretionary where deposit would cause undue hardship. In deciding waiver or dispensation, the appellate authority must consider the prima facie merits of the appeal, the financial position of the appellant, and other relevant circumstances. The order under challenge did not reflect consideration of these material factors and did not deal with the assessee's contention that the duty and interest had already been paid and that the penalty issue required reconsideration on merits.

Conclusion: The pre-deposit order was not sustainable and was set aside. The matter was remanded for fresh consideration of the waiver application after hearing both sides and taking a decision on merits.

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