The power to dispense with the pre-deposit requirement under Section 37B of the Central Excise Act, 1944, is not merely discretionary but involves a duty to exercise the power in appropriate cases, particularly where the appellant has a good prima facie case for exemption and insisting on the deposit would cause undue hardship.

( 1 ) THE appeal is taken up for hearing by treating it as included in the day's cause list. Filing of the paper book is dispensed with and the undertaking given in that behalf is discharged.

( 2 ) THE appeal arises out of a Writ Petition which was directed against an order dated March 16, 1988 passed by the Calcutta Bench of the Central Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as "the Tribunal") on an application for dispensing with the statutory requirement of pre-deposit of the amount of duty and penalty in dispute in appeal. The present appeal has been brought in view of the summary dismissal of the Writ Petition by the Trial Court.

( 3 ) THE following facts are not in dispute : (1) The original demand for excise duty was raised in respect of precipitated chalk manufactured by the appellant. (2) The case of the appellant before the competent authority was that precipitated chalk was eligible for exemption under Notification No. 23/55 dated April 29,1955. (3) The competent authority rejected the claim for exemption substantially on the ground that unless the product in question was shown to have been finally used in the manufacture of commodities mentioned in the said notification, the condition for exemption could not be regarded as having been duly satisfied and that the appellant had failed to establish the end use of the product and, as such the benefit of exemption could not be claimed and allowed. (4) Consequent upon the rejection of the claim for exemption a demand in the sum of Rs. 1,54,734. 30p was raised and penalty in the sum of Rs. 30,000/- was also levied. (5) The appellant preferred an appeal before the Tribunal and made an application for dispensing with the statutory requirement of pre-deposit of the amount of duty and penalty. (6) The Tribunal dispensed with the requirement of pre-deposit of the amount of penalty but rejected the prayer with regard to the requirement of dispensing with the pre-deposit of the amount of duty.

( 4 ) THE grounds which weighed with the Tribunal in rejecting the application made by the appellant arc contained in the following passage extracted from its impugned decision:". . . We find that the contention raised by the learned Counsel for the applicants that they were entitled to the benefit of the said Notification; that the demand was time-barred and that the penalty was illegal relates to the mertis of the case and will be gone into at the time of hearing of the appeal on merits. At this stage, in the light of the reasoning recorded by the Collector in the impugned order, it cannot be said that the applicants have good prima facie case as to warrant the dispensation of the pre-deposit of the amount of duty and penalty in question. However, looking to the financial position of the applicants' company as would be evident from the documents filed by them, we feel that asking the applicants to deposit the full amount of duty and penalty may cause undue hardship to them. Consequently we direct the applicants to deposit the amount of duty demanded for Rs. 1,54,734. 30 and dispense with the requirement of the penalty amount for Rs. 30,000/ -. "

( 5 ) THE learned Counsel for the appellant drew our attention to the decision of the Special Bench (C) of the Tribuanl at New Delhi in Collector of Central Excise, Chandigarh v. Thirani Chemicals Ltd. (Tribunal) and urged that the Tribunal has already taken the view that the benefit of exemption under the Notification in question is available with respect to precipitated chalk irrespective of the end use and that, therefore, the requirement of pre-deposit ought to have been relaxed in toto in the present case.

( 6 ) THE learned Counsel for the Revenue stated that the Department has accepted decision aforesaid of the Tribunal since, according to his instructions, no reference or appeal has been preferred.

( 7 ) AGAINST the aforesaid background, in our opinion it was impossible for the Tribunal