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2023 (12) TMI 435 - CESTAT HYDERABADCENVAT Credit - input service or not - Insurance Premium paid to Deposit Insurance & Credit Guarantee Corporation (DICGC) - HELD THAT:- The issue is no longer res-integra and the same have been adjudicated by the Hon’ble Kerala High Court in THE PRINCIPAL COMMISSIONER OF CENTRAL TAX & CENTRAL EXCISE, COCHIN VERSUS M/S SOUTH INDIAN BANK AND M/S CATHOLIC SYRIAN BANK LTD [2022 (12) TMI 1479 - KERALA HIGH COURT] the High Court relying on the ruling of Larger Bench of this Tribunal in South Indian Bank being Final Order No. 20691-30708/2020 dated 23.09.2020 [2020 (11) TMI 120 - CESTAT BANGALORE], have held that similarly situated assessee like banks are entitled to take Cenvat Credit on the premium paid to DICGC for the insurance services rendered by DICGC to the banks. Hon’ble High Court observed that without accepting deposits the bank cannot extend loans which is necessary to earn profit and the banks are under Statutory obligations to ensure the deposits received are issued for conducting the banking business. Further, the commercial banks face the risk of being dilicensed by the RBI if they did not insure the deposits with the DICGC (subsidiary of RBI). The impugned order is set aside - Appeal allowed.
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