M. C. AGARWAL, J. ( 1 ) THIS writ petition under Article 226 of the Constitution of India is directed against an order dated 19th March, 1997 passed by the Custom, Exicse and Gold (Control) Appellate Tribunal, new Delhi in exercise of powers under the proviso to Section 35f of the Central Excises and salt Act, 1944 (hereinafter referred to as the act) directing the appellant to make a pre-deposit of rs. 2,50,000/ -. ( 2 ) NO counter affidavit has been filed. ( 3 ) I have heard Sri Rajesh Kumar, learned Counsel for the petitioner and Sri Shishir Kumar, learned Counsel for Union of India. ( 4 ) THE petitioner inter alia is doing job work on behalf of the U. P. State Electricity Board under which used transformer oil belonging to the U. P. State Electricity Board is alleged to have been reclaimed by the petitioner. Its case was that the reclaimed oil is not subjected to any custom duty. This contention was accepted but later a view was taken that the reclaimed oil is a new product and is liable to excise duty. By an order dated 24-12-1996 the Commissioner of Central excise, Kanpur levied a sum of Rs. 5,30,246/- as excise duty. The dealer has preferred an appeal to the Tribunal and by virtue of Section 35f of the Act is required to deposit the duty demanded before its appeal can be heard. The proviso to that Section, however, authorises the appellate authority to dispense with such deposit if it is of the opinion that the deposit of duty demanded would cause undue hardship to such person. The Tribunal in the impunged order has observed as under : "15. We have considered the above submissions. We observe that this appears to be a case of difference of opinion on the excisability and durability between two senior officers of the department itself viz. the Collector and the Principal Collector. " "16. We feel that the case can be addressed on merits in details more appropriately at the time of hearing of the main appeal which will require persusal of technical and commercial aspects, etc. in order to formulate a view in the matter. " ( 5 ) THE Tribunal has directed the appellant before it to deposit Rs. 2,50,000/- out of the demand raised. The Tribunal has merely referred to gross profit of Rs. in order to formulate a view in the matter. " ( 5 ) THE Tribunal has directed the appellant before it to deposit Rs. 2,50,000/- out of the demand raised. The Tribunal has merely referred to gross profit of Rs. 12,88,154/- shown in the trading account but has ignored the profit and loss account which shows a loss of Rs. 5,79,030/- and, therefore, patently the petitioner is not in a comfortable financial position and it has an arguable case as acknowledged by the Tribunal itself. Therefore, the petitioner would suffer hardship if it is required to deposit the amount of duty demanded. ( 6 ) THE writ petition is, accordingly, allowed and the impugned order dated 19-3-1997 is quashed and it is ordered that the petitioner i. e. the appellant before the Tribunal is exempted from making any deposit under Section 35f of the Act in Appeal No. E-266/97-C. The parties will bear their own costs. .