Cenvat credit on returned duty-paid goods is admissible when goods are received back for reprocessing and records support the trail.

Rule 16 of the Central Excise Rules permits Cenvat credit when duty-paid goods are returned to the factory for reprocessing. On the facts recorded, the goods return register showed receipt of the returned goods, their processing, and subsequent clearance, which supported eligibility for credit. Mismatch in description and batch number, and the absence of separate production of invoices, did not defeat credit because the material issue was receipt of the goods back into the factory for reprocessing, not the later clearance. The register entries also contained invoice numbers and dates, confirming the transactional trail.

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Issues: Whether Cenvat credit was admissible on duty-paid goods returned to the factory for reprocessing and subsequently cleared, despite objections regarding mismatch in description, batch number, and non-production of invoices.

Analysis: Rule 16 of the Central Excise Rules entitles a manufacturer to take credit on goods brought back into the factory for reprocessing. The material on record, including the goods return register, showed receipt of the returned goods, their processing, and subsequent clearance. The objection of the revenue went to the later clearance and to differences in description and batch numbers, but credit under the rule depends on receipt of the goods for reprocessing. The entries in the register also recorded invoice numbers and dates, and the absence of separate production of invoices did not affect eligibility to credit in these facts.

Conclusion: The credit was admissible and the appeal succeeded.

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