CENVAT credit on returned goods fails where evidence does not prove actual return and no substantial question of law arises.

CENVAT credit on returned goods depends on proof that the goods were actually re-entered and that credit was permissible under Rule 16 of the CENVAT Credit Rules, 2002. On the facts, the Tribunal treated the consignee representative's statement, transporter evidence, absence of credit notes reaching the consignee, and unexplained delay in re-entry as showing that the alleged return of goods was not established. The High Court treated these as concurrent findings of fact based on evidence, held that there was no case of no evidence or irrelevant material, and found no substantial question of law for interference; the denial of credit, interest, and equivalent penalty was upheld.

---

---

Issues: Whether CENVAT credit on allegedly returned goods was rightly denied on the facts proved on record, and whether the High Court could interfere in the absence of a substantial question of law.

Analysis: The dispute turned on whether the appellant had discharged the burden of proving that the finished goods were actually returned by the consignee and that the credit taken on re-entry of goods was permissible under Rule 16 of the CENVAT Credit Rules, 2002. The Tribunal's majority view rested on factual appreciation of the statements of the consignee's representative, the transporter, the absence of credit notes reaching the consignee, and the unexplained delay in re-entry of goods, leading to a finding that the claimed return of goods was not established. The High Court found that these were findings of fact based on evidence, and that the record did not disclose a case of no evidence or reliance on irrelevant material.

Conclusion: The denial of CENVAT credit, interest, and equivalent penalty was upheld, and no substantial question of law arose for interference.

Ratio Decidendi: Concurrent findings of fact based on appreciation of evidence will not be interfered with in appeal unless the case discloses a substantial question of law or a finding unsupported by evidence.

---