Difference between credit memo and Return order

first: "Return orders" ar not available in Financial, so you are in the wrong subforum

second: do you has pressed the help button ? ;-)

A Purchase Return Order is typically create as art of a compensation agreement with your vendor when you return a purchased item that you are dissatisfied with. This could be due to a quality issue or the delivery of a wrong item, for example. Also a the posting types of a "Retourn Order" are "Ship, Invoice or Ship and Invoice".

A credit memo could only "Ship and Invoice".

Regards

moreover in Indian scenarion different excise entries will be created i.e. on purchase return the excise payable account will be used whereas in purchase credit memo cenvat account will be credited.