TaxTMI 
TaxTMI 
2023 (9) TMI 1378
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....r dated 15 September, 2020 passed by the Central Excise & Service Tax Appellate Tribunal (CESTAT) whereas the companion appeal filed against Indusind Bank Ltd., the impugned order is 29 September, 2020. 2. The facts are not in dispute. The respondents/assessees are engaged in the business of providing "banking and other financial services (BOFS)" defined under section 65 of the Finance Act, 1994. During the period under dispute, the respondents/assessees availed cenvat credit on service tax paid on Deposit Insurance Service provided by Deposit Insurance and Credit Guarantee Corporation (for short "DICGC"), considering the same as input service, defined under Rule 2(l) of the Cenvat Credit Rules, 2004 (for short "CCR"). The respondents avai....
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....rance service" provided by the Deposit Insurance Corporation to the banks is an "input service" and Cenvat credit of service tax paid for such service received by the banks from the Deposit Insurance Corporation could be availed by the banks for rendering 'output services'. Thus, the CESTAT has followed the said decision of the Larger Bench in passing the impugned order and has observed that the issue which fell for consideration in the respondents' appeals was no more res-integra being fully covered by the said decision of the Larger Bench. In this view of the matter, the CESTAT, Mumbai set aside the impugned orders and allowed the appeals filed by the respondents. It is on such backdrop, the proceedings are before us. 4. The revenue in p....
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....should be decided by this Court. 6. On the other hand, Mr. Paranjape, learned counsel for the respondent/revenue would submit that the impugned orders would not require any interference. He has taken us through the orders passed by the Larger Bench of the CESTAT to submit that the respondents were entitled to reckon the service tax which were paid on insurance premium to DICGC. He submits that the Larger Bench has taken into consideration that the requirement to make payment of such premium was a mandatory requirement under the Deposit Insurance and Credit Guarantee Corporation Act, 1961, hence in respect of all the deposits, which is the only subject matter of the present proceedings, the respondents were entitled to take the benefit of t....
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....as also the mandatory requirement under the Reserve Bank of India directives to be complied by the bank like the assessee and the compliances of which were mandatory. It is in the course of availing such insurance service for the benefit of the depositors, the petitioner was required to pay the premium on which service tax was paid, and of which, input tax credit was sought to be availed. In our opinion, the CESTAT has rightly observed that the issue stands squarely covered by the decision of the Larger Bench. 10. We are also in agreement with the view taken by the Division Bench of the Kerala High Court in approving the decision of the Larger Bench. We may note hereunder the relevant observations of the Division Bench of the Kerala High C....
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....determining word in the clause is 'extending deposits, loans or advances etc.' 'Extending deposits' literally understood is the deposits, loans etc. extended by the assessee. The acceptance of deposits is a pure and simple money transaction. But the realm in which the controversy operates is after receiving the deposits from public, the assessee is under statutory obligation to insure the deposits received for conducting the bank business and extends under law services on which service tax is paid. The services provided by the assessee are not falling within the negative list. Therefore, there is relatability on a hostile consideration of business in banking between the services availed and services rendered. The suggestion of revenue would....