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2021 (1) TMI 754 - AT - Service TaxCENVAT Credit - input services - services provided by the Insurance Corporation for insuring the deposits of public with the banks - HELD THAT - This very same issue was referred to Larger Bench and vide order in the case of M/s. South Indian Bank (supra) dated 20.03.2020 2020 (6) TMI 278 - CESTAT BANGALORE , the Larger Bench of the Tribunal had held that credit is eligible on the service tax paid on such premiums. The learned AR has relied upon the decision of CESTAT Bench at Mumbai in the case of M/s. Bank of America 2020 (11) TMI 582 - CESTAT MUMBAI . The very same issue has again been referred to the Hon ble President to resolve the issue by constituting a Larger Bench. The reason for such reference and doubting of the order rendered by the Larger Bench is that the decision rendered by the Hon ble Apex Court in Dilip Kumar Co. 2018 (7) TMI 1826 - SUPREME COURT was not considered by the Larger Bench and therefore the Larger Bench decision is per incuriam. When the issue has been decided by Larger Bench, judicial discipline binds us to follow the same - Further, the judgement in Dilip Kumar Co. 2018 (7) TMI 1826 - SUPREME COURT is with regard to interpretation of exemption notifications and would not be relevant for application to the issue under consideration which is the eligibility of Cenvat Credit. Application of judicial discipline is necessary to give uniformity certainty decisions. Thus, we are bound to follow the decision of the Larger Bench which is placed before us. Appeal allowed - decided in favor of appellant.
Issues:
Whether the appellants are eligible to avail Cenvat Credit of Service Tax paid for insuring public deposits with banks. Analysis: The appeal dealt with the eligibility of the appellants to claim Cenvat Credit on Service Tax paid for insuring public deposits with banks. The appellant argued that the issue had been addressed in a Larger Bench decision and a subsequent Division Bench decision, both supporting the eligibility for credit. The appellant contended that the Division Bench was bound by the Larger Bench decision, which established the eligibility of credit for services provided by the Deposit Insurance Corporation. On the other hand, the department relied on a different Division Bench decision, claiming that the Larger Bench decision was per incuriam as it did not consider a judgment by the Apex Court. The department argued that since the issue had been referred to a Larger Bench again, the previous decision was not applicable. The Tribunal considered the conflicting arguments and referred to the Larger Bench decision in the case of M/s. South Indian Bank, where it was held that credit is indeed eligible on the service tax paid for insuring public deposits. The Tribunal emphasized that services provided by the Deposit Insurance Corporation to banks fell within the definition of "input service," crucial for banks to function and provide financial services. The Tribunal analyzed the nature of deposits and loans, distinguishing between accepting deposits and extending deposits, to support the eligibility of credit. The Tribunal also highlighted the importance of judicial discipline in following decisions of Larger Benches for uniformity and certainty in legal interpretations. Ultimately, the Tribunal sided with the appellant, following the precedent set by the Larger Bench decision and setting aside the department's denial of credit. The Tribunal allowed the appeal, granting consequential reliefs to the appellants. The decision was pronounced in open court, emphasizing the resolution of the issue regarding the eligibility of Cenvat Credit for Service Tax paid on insuring public deposits with banks.
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