Pre-deposit in customs appeals requires reasonable time after waiver refusal before dismissal for non-compliance.

An appeal under Section 128 read with Section 129(1) of the Customs Act is entertainable even where penalty has not yet been deposited, because the provision contemplates deposit during the pendency of the appeal, subject to discretionary waiver for undue hardship. Where waiver is refused, the appellant must be given a reasonable opportunity to comply with the deposit requirement before the appeal can be dismissed for non-compliance. Immediate dismissal after refusal of waiver is inconsistent with the statutory scheme. The impugned appellate and revisional orders were quashed, and time was granted to deposit the penalty, after which the appeal was to be restored and decided according to law.

---

---

Issues: (i) Whether an appeal under Section 128 read with Section 129(1) of the Customs Act, 1962 is entertainable without prior deposit of the penalty levied. (ii) Whether the appellate authority can dismiss the appeal immediately after refusing waiver of deposit, without allowing reasonable time to comply with the deposit requirement.

Issue (i): Whether an appeal under Section 128 read with Section 129(1) of the Customs Act, 1962 is entertainable without prior deposit of the penalty levied.

Analysis: Section 128 permits an appeal by a person aggrieved by an order under the Act. Section 129(1) requires deposit of the duty demanded or penalty levied pending the appeal, but also confers discretion on the appellate authority to dispense with such deposit where it would cause undue hardship. The provision therefore contemplates maintainability of the appeal, subject to compliance with the deposit requirement during its pendency or a discretionary waiver.

Conclusion: The appeal is entertainable, but the penalty levied must ordinarily be deposited during the pendency of the appeal unless the appellate authority dispenses with deposit in exercise of its discretion.

Issue (ii): Whether the appellate authority can dismiss the appeal immediately after refusing waiver of deposit, without allowing reasonable time to comply with the deposit requirement.

Analysis: The wording of Section 129(1) does not prescribe a fixed period for deposit. After refusal to dispense with deposit, the appellant must be given a reasonable opportunity to comply with the statutory requirement. Immediate dismissal, without allowing such time, is inconsistent with the scheme of the section because the authority's power to reject the appeal arises only after non-compliance within a reasonable period.

Conclusion: Immediate dismissal without allowing reasonable time to make the deposit is not sustainable in law.

Final Conclusion: The impugned appellate and revisional orders were quashed, and the petitioner was granted one month's time to deposit the penalty, after which the appeal was to be restored and decided according to law.

Ratio Decidendi: Where a statute requires pre-deposit of penalty pending appeal but permits waiver for undue hardship, refusal of waiver must be followed by a reasonable opportunity to comply before the appeal can be dismissed for non-deposit.

---