Adjustment of Refund against Confirmed Demand During Pendency of Appeal is not Permissible: CESTAT

The CESTAT ruled that refund adjustment against confirmed demand during the pendency of an appeal is not permissible. This decision arose in a case where a taxpayer attempted to adjust a refund due against a demand confirmed by the tax authorities. The Tribunal held that such adjustments cannot be made while the appeal is still pending, as doing so would undermine the appeal process. The ruling highlights the need for taxpayers to maintain separate accounts for disputed amounts until a final decision is made on the appeal.