Adjustment against non-final duty demand invalid where no show cause notice was shown to have been served.

Abatement of duty could not be adjusted against an alleged demand where no show cause notice was shown to have been served and the demand had not attained finality. Because the underlying demand order was still pending in appeal, the proposed set-off lacked legal support. The adjustment portion of the order was therefore set aside in favour of the assessee.

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Issues: Whether the Commissioner could adjust the abatement of duty amount allowed to the assessee against a demand that had not attained finality and in respect of which no show cause notice was shown to have been issued.

Analysis: The record did not show service of any show cause notice before directing adjustment of the abatement amount against the alleged demand. The demand order against the assessee was also pending in appeal before the Commissioner (Appeals) and had therefore not attained finality. In these circumstances, the adjustment could not be legally sustained.

Conclusion: The adjustment portion of the order was set aside and the appeal was allowed to that extent in favour of the assessee.

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