Financial hardship justified waiver of pre-deposit pending appeal, with stay granted against recovery of disputed duty.

Financial hardship can justify waiver of pre-deposit pending appeal where the applicant shows limited liquid assets, continuing losses, exhausted overdraft facilities and substantial outside borrowings, and the Department does not rebut that material. The immediate inquiry is whether payment of the disputed duty would cause undue hardship for the purpose of the proviso to the pre-deposit requirement, even if the legality of the duty demand remains unresolved. On those facts, the pre-deposit was dispensed with and stay against recovery of the demanded duty was granted.

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Issues: Whether the applicants were entitled to dispensation of pre-deposit of duty pending appeal on the ground of financial hardship.

Analysis: The applicants showed a weak financial position, including limited liquid assets, continuing losses, exhausted overdraft facilities, and substantial outside borrowings. The Department did not controvert the financial material. Although the legality of demand under Section 11A was noted as not finally settled, the immediate question was whether deposit of the disputed duty would cause undue hardship for the purpose of the proviso to Section 35F.

Conclusion: The requirement of pre-deposit was waived and the applicants were granted stay against deposit of the duty demanded.

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