Customs, Excise and Services Tax Appellate Tribunal (CESTAT): Ajay Sharma (Judicial Member) allowed an appeal which was filed challenging the order passed by the Commissioner by which he had rejected the appeal filed by the Appellants while upholding the Order-in-Original. The issue involved was whether the Appellant was eligible to avail Cenvat credit of service tax paid by them on the deposit insurance service provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC).
The appellant was engaged in providing banking and various financial services in India. The department had denied the Cenvat Credit to the Appellants on the ground that the service in issue did not qualify as “Input Service” in terms of Rule 2(l) of CCR and Cenvat Credit for the service tax paid by the Appellants for this service cannot be availed by them.
The Tribunal considered the case of South Indian Bank v. Commr. Of Customs, CE & ST, 2020-TIOL-861-CESTAT-BANG-LB in which it was held that insurance service provided by the DICGC to the Banks for insuring the deposits of the public with the Banks was an “Input Service” in terms of Rule 2(l) of CCR and Cenvat Credit for the service tax paid by the banks for this service can be availed by the banks for rendering output service.
The Tribunal, therefore, allowed the appeal keeping in view the decision of the Larger Bench of the Tribunal in the above-mentioned decision.[IDFC Bank Ltd. v. Commr. Of CGST, 2021 SCC OnLine CESTAT 2, decided on 06-01-2021]
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