Confiscated goods and sick-unit status justified unconditional waiver of pre-deposit for duty and penalties pending appeal.

Confiscated goods under the control of customs and central excise authorities were treated as vesting in the Government, so pre-deposit of confirmed customs duty and corresponding excise duty was not insisted upon at the stay stage. The same reasoning was applied to the pre-deposit requirement for penalties. The assessee's status as a sick unit with substantial accumulated losses was also treated as an additional ground against insisting on deposit. The stay application was allowed unconditionally and the appeal was directed to proceed to regular hearing.

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Issues: Whether the assessee was entitled to unconditional waiver of pre-deposit of the confirmed customs duty, central excise duty and penalties pending appeal.

Analysis: The goods in question were under the control of the customs and central excise authorities and had been confiscated. The Tribunal applied the principle that, where confiscated goods vest in the Government, insistence on pre-deposit of duty is not warranted at the stay stage. The same approach was held applicable to the requirement of pre-deposit under the corresponding excise provision. The Tribunal also took note of the assessee's status as a sick unit and its substantial accumulated losses, treating the financial position as an additional ground against insisting on pre-deposit of penalties.

Conclusion: The assessee was entitled to waiver of pre-deposit of the duty and penalty amounts.

Final Conclusion: The stay application was allowed unconditionally and the appeal was directed to proceed to regular hearing.

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