IMPORTANT POINT
Order directing deposit of an amount by way of pre-deposit under Section 35F Central Excise Act has to be passed considering merits of appeal and then considering financial hardship and other relevant factors.

ORDER

Leave granted.

2. The issue here relates to the order passed by the Commissioner (Appeals), Central Excise and Customs, under Section 35F of the Central Excise Act, 1944. By the impugned order, the appellants have been directed to deposit an amount of Rs. 30 lakhs by way of pre-deposit. The reasoning given in support of such order is wholly unsatisfactory. The appellate authority has not at all considered the prima facie merits and has concentrated upon the prima facie balance of convenience in the case. The Appellate Authority should have addressed its mind to the prima facie merits of the appellants case and upon being satisfied of the same determined the quantum of deposit taking into consideration the financial hardship and other such relevant factors.

3. We accordingly set aside the decision of the High Court as well as the impugned order dated 14.8.2002 and remand the matter back to the appellate authority for redetermining the issue under Section 35F of the Act after affording an opportunity of hearing to the parties.

4. The appeal is allowed without any order as to costs.

Appeal allowed and matter remanded.

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