Credit shall not be allowed, if inputs are stolen.

Royal Containers [2006 (197) E.L.T. 381 (Tribunal-Delhi)]

In this matter, the respondents are engaged in the manufacture of Tin Containers, and they were availing the benefit of MODVAT credit in respect of the duty paid Tin plates used in the manufacture of their final product. The 23.524 MT inputs were stolen from their factory. The Revenue issued a show cause notice for reversal of the credit in respect of the inputs, which were stolen.

The Appellant has filed the appeal against the above notice after taking the into consideration the decision of the Tribunal in the case of Ram Printing Mills Vs. Collector of Central Excise, Chandigarh, reported in 1994 (73) ELT 397 (Tribunal). However, the department has the contention facts of case is different as in the case of Ram Printing Mills Vs. Collector of Central Excise, Chandigarh (supra) fabrics were stolen from the factory, which was the final product of the manufacturer.

After hearing the views and facts of both side the CESTAT has absorbed that the facts of the present case are different. In this case the inputs on which credit was taken before use in the manufacture of final product was stolen. Thus, it is held that the input is stolen before the use in manufacture of final product thus, the credit would not be available.