Cenvat credit on returned goods and limitation for suo motu credit on supplementary invoices were both decided in favour of the assessee.

Cenvat credit on duty-paid rejected goods received back and re-cleared was held admissible where receipt was supported by records and a buyer's certificate; the absence of transportation evidence alone was not enough to deny credit once substantive receipt was established under Rule 16 of the Central Excise Rules. Demand on suo motu credit taken on supplementary invoices was held time-barred because the relevant entries were already reflected in statutory records and returns, with no concealment or mala fide shown. The assessee obtained relief on both the credit and limitation issues.

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Issues: (i) Whether Cenvat credit was admissible on duty-paid rejected goods received back and re-cleared when the fact of receipt was supported by records and a certificate, despite no transportation evidence; (ii) Whether the demand arising from suo motu credit of duty paid on supplementary invoices was barred by limitation.

Issue (i): Whether Cenvat credit was admissible on duty-paid rejected goods received back and re-cleared when the fact of receipt was supported by records and a certificate, despite no transportation evidence.

Analysis: The receipt of the rejected goods was not in dispute and stood reflected in the assessee's records, with corroboration from the buyer's certificate. The absence of transportation evidence, by itself, was not treated as a sufficient ground to deny credit where the substantive fact of receipt of the goods was established. Rule 16 of the Central Excise Rules governed the treatment of such returned goods.

Conclusion: The credit was admissible and the disallowance was set aside in favour of the assessee.

Issue (ii): Whether the demand arising from suo motu credit of duty paid on supplementary invoices was barred by limitation.

Analysis: The relevant entries were already reflected in the assessee's statutory records and returns, and the notice was issued long after the re-entry of credit. On these facts, no concealment or mala fide was found, and the demand was held time-barred.

Conclusion: The demand was barred by limitation and was set aside in favour of the assessee.

Final Conclusion: The assessee succeeded on both the credit issue and the limitation issue, resulting in complete relief.

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