Pre-deposit of duty demand set aside where applicability of Packaged Commodities Rules remained seriously doubtful.

Pre-deposit of the entire duty demand pending appeal was not justified where the applicability of the Packaged Commodities Rules to the goods cleared during the relevant period was under serious doubt. Earlier judicial authority supported the assessee's stand, and the controversy was not free from doubt at the interlocutory stage. On that basis, insistence on deposit of the full demand was held unwarranted, and the pre-deposit direction was set aside. The appellate tribunal was directed to hear and decide the appeal on merits without requiring deposit of the duty demand.

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Issues: Whether the assessee was required to make pre-deposit of the entire duty demand pending appeal where the applicability of the Packaged Commodities Rules to the goods cleared during the relevant period was in doubt.

Analysis: The entitlement to insist upon pre-deposit depended on whether the underlying controversy was open to serious doubt. The relevant period was covered by earlier judicial authority supporting the assessee's stand, and the question of applicability of the Rules was not free from doubt. In these circumstances, insistence on deposit of the entire demand was not warranted at the interlocutory stage.

Conclusion: The pre-deposit direction was set aside and the appellate tribunal was directed to decide the appeal on merits without insisting on deposit of the duty demand.

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