Pr. Commissioner of Central Tax Vs Kalyan Jewellers India Ltd. (CESTAT Bangalore)
CESTAT Upholds CENVAT Credit on Aircraft Running Expenses and Executive Jet Hiring Charges, Dismisses Revenue Appeal – CESTAT
The Revenue appealed against the order of the Commissioner (Appeals), which had allowed the respondent’s claim of CENVAT credit on aircraft running expenses and executive jet hiring charges for the period 2015-16 and 2017-18 (up to June 2017). The respondent was engaged in sourcing jewellery through conversion of bullion into gold jewellery, manufacturing gold jewellery, distributing jewellery to retail showrooms across India through regional offices, and providing output services including business auxiliary services and renting of immovable property. During audit for the period April 2015 to June 2017, it was observed that the respondent had availed CENVAT credit on certain services which, according to the department, were ineligible under the CENVAT Credit Rules, 2004. A show cause notice dated 18.02.2021 was issued for the period 01.04.2016 to 30.06.2017. The adjudicating authority confirmed recovery of the credit with interest and imposed an equivalent penalty. On appeal, the Commissioner (Appeals), by order dated 11.07.2024, held that the activities carried out by the respondent were directly or indirectly involved in the manufacture of the final product, allowed the credit, and also held that the extended period of limitation was not invocable in the absence of evidence of willful suppression. Revenue challenged that order.
