Unjust enrichment barred refund adjustment, so no set-off was allowed against the duty demand.

Adjustment of a duty demand against a claimed refund was refused where the refund itself was barred by unjust enrichment. The Tribunal distinguished authorities allowing set-off of excess duty against short payment, noting that those cases did not address a situation where the assessee accepted that the duty burden had been passed on to customers and, therefore, the refund was not payable to it. As no existing refundable amount was available in law, there was nothing against which the demand could be adjusted. The reliance on Rule 9B was also rejected on the same basis, and the duty demand was upheld.

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Issues: Whether, while finalising the claim, the amount found payable by the assessee could be adjusted against the amount found refundable when the refundable amount was barred by unjust enrichment.

Analysis: The Tribunal held that the cited authorities on adjustment of excess duty against short payment did not deal with a case where the assessee itself ed that the refundable amount was not payable because the incidence of duty had been passed on to customers. In such circumstances, the refundable amount was not available to the assessee, and there was no existing refund against which the demand could be adjusted. The Tribunal also distinguished the plea based on Rule 9B, holding that the case did not warrant the adjustment sought once the refund stood defeated by unjust enrichment.

Conclusion: The adjustment was not permitted, and the demand of duty was upheld against the assessee.

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