Pre-deposit requirement waived where seized goods were sold and sale proceeds secured the demand, with remand for merits

Where seized goods had already been sold and the sale proceeds were with the department, insistence on pre-deposit of penalty was held unwarranted because the confiscated goods, with redemption fine option, effectively stood as security for the demand. The order dismissing the appeal for non-deposit was set aside, and the matter was remanded to the Commissioner (Appeals) for fresh disposal on merits without insisting on pre-deposit. The note therefore confirms that, in such circumstances, recovery protection should not defeat appellate consideration on the substantive issues.

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Issues: Whether the appeal could be dismissed for non-deposit of penalty when the seized goods had already been sold and the sale proceeds were with the department, and whether the matter should be remanded for decision on merits without insisting on pre-deposit.

Analysis: The Tribunal noted that the adjudicating authority had confiscated the goods with an option of redemption fine, and therefore the goods themselves could serve as security for the demand. It further accepted the representation that the goods had been sold and the sale proceeds were available with the department. In these circumstances, insistence on pre-deposit at that stage was unwarranted. Since the Commissioner (Appeals) had not decided the appeal on merits, the matter required fresh consideration.

Conclusion: The requirement of pre-deposit was waived, and the order dismissing the appeal for non-deposit was set aside. The matter was remanded to the Commissioner (Appeals) for disposal on merits without insisting on pre-deposit.

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