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2023 (9) TMI 1378 - HC - Service TaxCENVAT Credit - input service - Deposit Insurance Service provided by Deposit Insurance and Credit Guarantee Corporation - nexus of such service with the actual performance of the banking service provided by the respondents/assessees - HELD THAT:- The issue in the present proceedings is certainly not different which has fell for consideration of the Larger Bench in the case of M/S. SOUTH INDIAN BANK VERSUS THE COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX-CALICUT [2020 (6) TMI 278 - CESTAT BANGALORE] - It is found that the Larger Bench has taken into consideration the statutory scheme of DICGC 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. The CESTAT has rightly observed that the issue stands squarely covered by the decision of the Larger Bench. It can be construed from a plain reading of section 66D that the negative list is compiled of the services stated therein and is relied on to bring the assessee within the negative list is clause-(n) i.e. services by way of extending deposits, loans, advances etc. in so far as the consideration is represented by way of interest or discount. The expression used in clause-(n) begins with the words ‘extending deposits, loans or advances’, and such activity is represented by way of interest or deposit of money. The 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. Thus, no substantial question of law arises in the present appeals - appeal dismissed.
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