It's possible ... it depends what type of server side framework you're using to some extent. But it might be easier for users to encrypt confidential files before uploading them?
Offline encryption meaning on the client machine, a desktop application?
If that's what you're going to write source (code?) for, don't bother. Recommend a handful of the many free encryption programs available. If you just let people upload files ... of any kind ... then when security is important, people will decide which software and/or algorithm is best for them. And there's added security in that now an intruder doesn't just need the file and the password, but also to know whether it's PGP, Idea, DES, or moonshine. Some of them write the algorithm into the file, though.
Using a SSL connection will help with this as it passes data from a secure encrypted link. But you will need to secure a SSL certificate for this to work.
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<mgraphic /> - I don't have a solution but I admire the problem.
