Pre-deposit compliance within time bars dismissal for non-compliance and requires the appeal to be heard on merits.

Compliance with the pre-deposit condition within the time granted under the stay order made dismissal of the appeal for alleged non-compliance unsustainable. The assessee had deposited part of the demand and the balance pre-deposit was waived for hearing; the record showed that the deposit was made within four weeks of receiving the stay order. The appellate authority was therefore required to hear the matter on merits, and the dismissal was set aside with remand for fresh decision after hearing the appellant.

---

---

Issues: Whether the dismissal of the appeal for alleged non-compliance with the stay order was justified, and whether the matter required remand for fresh decision.

Analysis: The appellant had already deposited Rs. 12 lakhs and the remaining pre-deposit was waived for hearing. The dismissal by the Commissioner (Appeals) rested on alleged non-compliance with the pre-deposit condition under Section 35F of the Central Excise Act read with Section 83 of the Finance Act. The record showed that the deposit was made within four weeks from receipt of the stay order, and the compliance was therefore treated as having been made within the stipulated time. In these circumstances, the dismissal for non-compliance could not be sustained and the appeal had to be heard on merits by the appellate authority.

Conclusion: The dismissal was set aside and the matter was remanded to the Commissioner (Appeals) for fresh decision after hearing the appellant.

Ratio Decidendi: Where the assessee complies with the pre-deposit condition within the time permitted under the stay order, dismissal of the appeal for non-compliance is unsustainable and the matter is liable to be restored for fresh adjudication.

---