TMI Blog2023 (9) TMI 1378X X X X Extracts X X X X X X X X Extracts X X X X ..... ER 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Both the appeals are filed by the revenue against the respondents which are engaged in the banking business. Central Excise Appeal No. 21 of 2021 is filed against the respondent-Yes Bank Ltd. against an order 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 provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Service Tax, Calicut. In the said case, the Larger Bench vide judgment dated 20 March, 2020 reported in 2020 (41) G.S.T.L. 609 (Tri.-LB) answered the reference which was made to it, by holding that the insurance 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um by the respondents to the DICGC could not have been taken into account for input services. Drawing our attention to the questions of law and the grounds as raised in the appeals, Mr. Kantharia would submit that the questions as raised 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 mandato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue in the present proceedings is certainly not different which has fell for consideration of the Larger Bench in the case of South Indian Bank (supra) . We find 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. In our opinion, the CESTAT has rightly observed that the issue stands squarely covered by the decision of the La ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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