Final rejection of refund claim bars adjustment of later duty demand absent provisional assessment framework

A final rejection of an earlier refund claim prevented later adjustment of a duty demand against the alleged excess payment, because the refund issue had already attained finality and the assessments were not provisional. The tribunal noted that the subsequent order only confirmed the balance duty demand and did not reopen any right of set-off against a refundable amount. In the absence of a valid provisional assessment framework, adjustment under the cited rule was not available. The order allowing adjustment was set aside and the balance demand was restored.

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Issues: Whether the duty demand of Rs. 11,58,767/- could be adjusted against the alleged excess payment of Rs. 86,54,690/- when the earlier refund claim had already attained finality and the assessments were not provisional.

Analysis: The earlier refund claim, which included the amount now claimed as excess payment, had already been rejected and that rejection had been upheld without further appeal. In that situation, the refund issue had become final. The later order of the Assistant Commissioner therefore confined itself to confirming only the balance duty demand and did not open any question of adjustment against a refundable amount. The record did not justify treating the assessment as provisional so as to permit such adjustment under the cited rule.

Conclusion: The adjustment was not permissible and the assessee's plea for setting off the demand against the claimed excess payment was rejected.

Final Conclusion: The Revenue's challenge succeeded, the order permitting adjustment was set aside, and the Assistant Commissioner's order confirming only the balance demand was restored.

Ratio Decidendi: Where a refund claim has already been finally rejected, a later demand arising from re-quantification cannot be adjusted against the claimed excess payment in the absence of a valid provisional assessment framework.

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