Pre-deposit waiver and suspension of confiscation can be granted despite mandatory penalty provisions during appeal.

Section 11AC prescribes a mandatory penalty on final adjudication, but it does not curtail the appellate authority's power under Section 35F to dispense with pre-deposit pending appeal. The two provisions operate in different fields, so interim relief can still be granted where the circumstances justify it; here, voluntary payment of the duty supported waiver of the penalty pre-deposit. The confiscation of plant, machinery and other assets could also be kept in abeyance during the appeal, subject to security and the undertaking not to alienate the assets, to protect the Revenue's interest.

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Issues: (i) Whether the penalty imposed under Section 11AC of the Central Excises and Salt Act, 1944 could be stayed and the pre-deposit of penalty waived under Section 35F of the same Act. (ii) Whether the order of confiscation of plant, machinery and other assets should be kept in abeyance pending disposal of the proceedings.

Issue (i): Whether the penalty imposed under Section 11AC of the Central Excises and Salt Act, 1944 could be stayed and the pre-deposit of penalty waived under Section 35F of the same Act.

Analysis: Section 11AC provides for mandatory penalty equal to the duty determined as short levied, but the power to dispense with deposit under Section 35F remains available to the appellate authority. The two provisions operate in different fields: Section 11AC governs the final penalty on adjudication, whereas Section 35F governs interim relief pending appeal. The voluntary payment of the entire duty also supported waiver of pre-deposit.

Conclusion: The requirement of pre-deposit of the penalty was waived.

Issue (ii): Whether the order of confiscation of plant, machinery and other assets should be kept in abeyance pending disposal of the proceedings.

Analysis: Since the appeal was pending and the applicants undertook not to dispose of the assets, the confiscation order was treated as capable of being suspended during the pendency of the matter, subject to security to protect the Revenue's interest.

Conclusion: The confiscation order was held in abeyance pending disposal of the case.

Final Conclusion: Interim relief was granted by dispensing with pre-deposit of penalty and suspending the confiscation order during the pendency of the appeal, subject to the stated safeguards.

Ratio Decidendi: The appellate power under Section 35F to dispense with pre-deposit is not curtailed by the mandatory nature of penalty under Section 11AC at the stage of final adjudication.

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