Statutory pre-deposit exemption applies only to standalone penalty demands, not composite orders where tax and interest were later paid.

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....Statutory pre-deposit for an appeal against a penalty order does not apply under the proviso where the original order imposed a composite liability for tax, interest and penalty. Payment of the tax and interest components does not convert that original composite order into an order demanding penalty alone. A later recovery order confined to penalty likewise does not alter the character of the original order. Accordingly, rejection of the appeal for failure to deposit ten per cent of the penalty was set aside and the appeal was restored for adjudication on merits.....