CENVAT credit on returned goods cannot be denied solely because it was taken before physical receipt, if later receipt is proved.

Credit on returned goods was not to be denied merely because it was taken before physical receipt, where the identity and quantity of the goods were accepted and the goods were later received. The timing difference was treated as a technical irregularity rather than a substantive bar to credit. Once the returned waste parings were received from the sister concern, entitlement to credit arose, and prior availment alone could not defeat otherwise admissible credit.

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Issues: Whether credit could be denied merely because it was taken before actual receipt of the returned goods, though the goods were subsequently received and credit was otherwise admissible.

Analysis: The credit claim related to waste parings earlier cleared on duty and later received back from the sister concern. The appellate authority had accepted that the assessee was entitled to credit on the returned goods and had also accepted the identity and quantity of the goods, but denied credit only on the ground that it was taken before physical receipt. That timing gap was held to be a technical irregularity. Once the goods were received, entitlement to credit arose, and the earlier availment could not by itself justify denial of substantive credit.

Conclusion: Credit could not be denied solely because it was taken before receipt of the returned goods. The issue was decided in favour of the assessee.

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