Pre-deposit and hearing requirements must be followed before dismissing an appeal for non-compliance; matters were remanded for merits.

An appeal should not be dismissed for alleged non-compliance with a pre-deposit or stay direction without first giving notice and an opportunity of hearing. The proceedings were held unsustainable on that procedural ground, and the assessees' sick industrial status was treated as a relevant circumstance justifying waiver of pre-deposit. The matters were restored to the Commissioner (Appeals) for decision on merits, with direction to hear the appeals without insisting on pre-deposit.

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Issues: Whether the Commissioner (Appeals) could dismiss the appeals for non-compliance with the stay orders without serving notice and affording an opportunity of hearing under Section 35F of the Central Excise Act, 1944, and whether the matters should be remanded with waiver of pre-deposit.

Analysis: The dismissal of the appeals for alleged non-compliance with the stay directions was not sustainable because notice and opportunity of hearing were required before passing final orders. The assessees had also shown a sick industrial status, and the circumstances justified dispensing with pre-deposit. The proceedings were therefore required to be restored to the Commissioner (Appeals) for decision on merits.

Conclusion: The dismissal order was set aside, the appeals were remanded, and the Commissioner (Appeals) was directed to hear the appeals on merits without insisting on pre-deposit.

Final Conclusion: The assessees succeeded on the procedural challenge, and the appeals were restored for fresh adjudication on merits with waiver of pre-deposit.

Ratio Decidendi: An appeal cannot be dismissed for non-compliance with a pre-deposit or stay direction without affording the appellant notice and a hearing, and where circumstances justify it, pre-deposit may be waived and the appeal heard on merits.

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