CESTAT says Refund Cannot Be Adjusted Against a Non-Final Demand

Johnson & Johnson had been sanctioned SAD refunds of ₹14.29 lakh and ₹3.68 lakh, but the amounts were adjusted against a duty drawback demand that was still appealable. The drawback demand was subsequently dropped in 2024, yet the Department did not suo motu release the appropriated refund. CESTAT held that such adjustment against a non-final demand was legally unsustainable and directed refund of the amounts with applicable interest.