Sanctioned refund cannot be adjusted against unconfirmed show cause notice amounts without an adjudicated demand.

A sanctioned refund cannot be adjusted against amounts mentioned only in show cause notices when those notices have not been adjudicated and have not resulted in a confirmed demand. In the absence of an existing, confirmed liability, there is no subsisting dues against which the refund can be set off. Treating disputed amounts as recoverable solely on the basis of pending notices is incorrect, and an interim order in a different matter does not apply where the refund has already been sanctioned.

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Issues: Whether refund sanctioned on merits could be adjusted against amounts referred to in show cause notices which had not been adjudicated and had not resulted in a confirmed demand.

Analysis: The refund claim had been sanctioned after holding that the show cause notices did not culminate in any confirmed demand against the appellant. In the absence of an adjudicated and confirmed liability, there was no subsisting demand available for adjustment against the sanctioned refund. The appellate authority therefore erred in treating the disputed amounts mentioned in the show cause notices as if they were confirmed dues. The relied upon interim order in another matter was held to be inapplicable on the facts because the refund there was still pending, whereas here the refund had already been sanctioned.

Conclusion: The adjustment of the sanctioned refund against the unadjudicated show cause notices was unjustified, and the issue was decided in favour of the appellant.

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