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If your intention is not going to work for the employer then it’s your responsibility to inform them not to appeal your EP rejection and give some thoughtful rationale.

If an employer is appealing your application means they have shown interest on your profile and trying their best to get through the work visa process.

Why you didn’t inform them about your decision despite of knowing that they are appealing on pass rejection?

Now, coming back to your second part of question, if it has written to pay 2 weeks salary on the offer letter, if you are absconded then by rule you should pay but it depends on how are you convincing them the reason not to join them, so that they can accept your request and agreed not to claim 2 weeks salary from you. And, more importantly they won’t complain at MoM against you. Good luck

Note: 2 weeks salary to be paid only when your EP is approved and you are not joining. So, they can’t claim 2 weeks salary if appeal of EP rejection is not successful.

Hi,
Thanks for the quick reply.
The hr is very slow in answering my questions, usually replies me after 2~3 days. (I know they are busy so that's fine to me).
The reason I wanted to withdrawn is that I have received a better offer, right after they informed me my EP application has failed and undergoing appealing (yes, they just informed me so I didnt really have time to reject too).
So most probably I would have to pay them the penalty... 

Try to negotiate and convincing them to withdraw their appeal. You may not be paying any salary amount here.

You can read note of my previous message to understand that if they withdraw their appeal then you no need to pay them anything but depends on how you negotiate.

Alright!
Thanks for the info.
Will keep my status posted.

The company wont ask me to pay anything. 
But I have been waiting for the withdrawal of appeal for 3 days...

Good to hear. Give them few more days to withdraw. Keep a healthy negotiation with them and they will make it faster.