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TMI Blog2024 (11) TMI 1410X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal. The Division Bench noticed that there were conflicting decisions on the issue as to whether a banking company would be entitled to avail CENVAT credit of service tax paid to Deposit Insurance and Credit Guarantee Corporation for insuring deposits. 2. Earlier, a Larger Bench of the Tribunal had been constituted to examine this very issue and the reference was answered by the Larger Bench by an order dated 20.03.2020 in the following manner: "The insurance service provided by the Deposit Insurance Corporation to the banks is an "input service" and CENVAT credit of service tax paid for this service received by the banks from the Deposit Insurance Corporation can be availed by the banks for rendering "output services"." 3. While a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as, the questions raised in the appeals are answered against the revenue and in favour of the assessee. Hence the appeals stand dismissed." (emphasis supplied) 5. The reference made to the Larger Bench has, therefore, to be answered in the same terms as was answered by the Larger Bench of the Tribunal on 20.03.2020. The reference is, accordingly, answered in the following manner: "The insurance service provided by the Deposit Insurance Corporation to the banks is an "input service" and CENVAT credit of service tax paid for this service received by the banks from the Deposit Insurance Corporation can be availed by the banks for rendering "output services"." 6. The appeal may now be placed before the Division Bench of the Tribunal fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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