The Appellate Tribunal should consider the merits of the case and the undue hardship caused to the assessee in exercising its discretion under S.35F.

1. Petitioner is the proprietor of M/s. Vitco Rubber Industries. He is engaged in the manufacture of Tread Rubber. This commodity is excisable. There was a surprise visa of the petitioner's factory by the officers of the Central Excise Department on 3-8-1985. Subsequently, by Ext.P1 notice dated 29-1-1986, the petitioner was asked to show cause as to why a duty of Rs.17,47,091.53 should not be levied besides penalty under R.52A(5) of the Central Excise Rules. Finally, by Ext.P5 order dated 19-6-1986, the first respondent demanded duty of Rs. 17,47,091.53 besides penalty of Rs.5,00,000/-. The petitioner filed an appeal before the 2nd respondent, Appellate Tribunal, evidenced by Ext.P7. He also filed Ext. P8 application along with an affidavit, Ext. P9, for stay of recovery of the entire amount levied by way of excise duty, penalty, etc. By Ext.P10 order dated 27-10-1986, the Appellate Tribunal directed the petitioner to make a deposit of Rs.5,00,000/- on or before 29-1-1987 and further observed that subject to the said prior deposit, the balance of duty and penalty would stand dispensed with. It was ordered that the appeal will be posed to 30-1-1987. In this original petition the challenge is against Ext. P1 notice, Ext.P5 order passed by the first respondent and Ext.P10 order passed by the 2nd respondent.

2. I heard counsel for the petitioner Mr. Sivasankara Panicker as also the Central Government Standing Counsel Sri P. V. Madhavan Nambiar. Ext.P1 notice has merged in Ext.P5 order. That order is the subject matter of an appeal before the 2nd respondent. The petitioner has availed of the statutory remedy by way of filing the appeal. In such circumstances, there is no justification in invoking the jurisdiction of this Court under Art.226 of the Constitution of India praying to quash Exts.P1 and P5. I reject the aforesaid prayer contained in the Original Petition. It should be remembered that the remedy under Art.226 of the Constitution is not a concurrent one. (Mc Dowell & Co.'s case, 1985 KLT 428). The more serious attack was against Ext.P10. Along with the appeal the petitioner filed Exts. P8 and P9 invoking the jurisdiction of the 2nd respondent under S.35F of the Central Excise and Salt Act, 1944. The 2nd respondent has also exercised the powers vested in it under the proviso to S.35F of the Act. Petitioner's counsel contended that the facts and circumstances disclosed in Exts. P7 to P9 would go to show that the deposit of duty demanded or penalty levied would cause undue hardship to the petitioner. Briefly stated, the petitioner has a case that he had no opportunity to put forward his plea or substantiate it before the first respondent, and there is violation of the principles of natural justice. It is also contended that the duty levied is unjustified and lacks factual and legal basis. There is also a contention that the assessment ex facie is not on the petitioner. According to the petitioner, these and other matters pleaded on the merits would go to show that the petitioner has a prima facie or arguable case. If that be so, in the present context, when the petitioner is not in a position to make any deposit of the amount demanded, a direction insisting a pre-deposit will really render any decision that is likely to be rendered in the appeal ineffectual or illusory. The question posed for consideration requires detailed, analysis on the merits. In exercising the discretion under the proviso to S.35F of the Act the Appellate Tribunal should have considered, atleast prima facie, the question involved in the appeal, as to whether a prima facie view of the matter discloses an arguable case as against a frivolous one, besides looking into the economic circumstances of the assessee. The amount involved in the case is certainly relevant. If it is a heavy amount, and if the petitioner is able to show a prima facie case, to insist on payment of a substantial amount which the assessee is not in a, position to deposit, w