Input service credit for insurance of deposits upheld where banking nexus and proper supporting documents were established.

Insurance of deposits was treated as an input service because it is integrally connected with banking operations, so service tax paid on that insurance qualified for Cenvat credit under Rule 2(l) of the Cenvat Credit Rules, 2004. The supporting records were also held sufficient because they contained the service provider's name and address, the nature of services rendered, and the registration number, satisfying Rule 9(2) requirements for duty-paying documents. On that basis, denial of Cenvat credit was unsustainable and the impugned order was set aside, with consequential relief granted to the assessee.

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Issues: (i) whether Cenvat credit was admissible on service tax paid on insurance of deposits; (ii) whether the supporting documents produced by the assessee were sufficient to avail Cenvat credit.

Issue (i): whether Cenvat credit was admissible on service tax paid on insurance of deposits.

Analysis: Insurance of deposits was found to be integrally connected with the business of banking and treated as an input service within the meaning of Rule 2(l) of the Cenvat Credit Rules, 2004. The service tax paid on such insurance therefore qualified for credit.

Conclusion: Cenvat credit on insurance of deposits was admissible in favour of the assessee.

Issue (ii): whether the supporting documents produced by the assessee were sufficient to avail Cenvat credit.

Analysis: The documents placed on record were found to contain the name and address of the service provider, the nature of services rendered and the registration number, satisfying the requirement of proper duty-paying documents under Rule 9(2) of the Cenvat Credit Rules, 2004.

Conclusion: The documents were held to be sufficient and the credit was correctly availed in favour of the assessee.

Final Conclusion: The denial of Cenvat credit was unsustainable and the impugned order was set aside, resulting in allowance of the appeal with consequential relief.

Ratio Decidendi: Insurance of deposits, being integrally connected with banking operations, qualifies as an input service, and Cenvat credit cannot be denied when proper supporting documents establish the duty-paying nature of the service.

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