Telangana High Court
The Principal Commissioner Of Gst And ... vs M/S. Union Bank Of India on 27 June, 2024
THE HONOURABLE SRI JUSTICE SUJOY PAUL
AND
THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO
CEA.No.8 of 2024
JUDGMENT (per Hon'ble SP,J)
Sri A. Rama Krishna Reddy, learned Standing Counsel for
CBEC for the appellant is heard on admission.
2. Learned Standing Counsel for the appellant raised certain
substantial questions of law and contended that the Tribunal has
erred in deciding it in favour of the assessee.
3. We have heard him at length.
4. The paragraph No.6 of impugned order of the Tribunal
reads as under:
"Heard the parties. We find that the issue is no
longer res-integra and the same have been adjudicated
by the Hon'ble Kerala High Court in C.E.Appeal No.1 of
2021 along with other appeals and vide judgment dated
05.12.2022 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, habe 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)."
5. A plain reading of this order makes it clear that it is
founded upon a decision of a Larger Bench of the Tribunal in the
case of South Indian Bank (Final Order No.20691-30708/2020,
dated 23.09.2020). The Said judgment of Larger Bench was called
in question before the Kerala High Court in C.E.Appeal No.1 of
2021, which was decided on 05.12.2022. Speaking for the Division
Bench, Hon'ble Sri Justice S.V.Bhatti (as his Lordship then was)
opined as under:
"The payment of premium on insurance together
with service tax for valid and correct reasons has been
held by the Larger Bench as follows:
"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".
15. The substantial questions raised are not
tenable, and the findings recorded by the larger bench
have already considered these issues. Two questions
argued before this Court are answered against the
Revenue and in favour of the assessee. Hence
C.E.Appeal No.1 of 2021 is dismissed.
For the view taken in the preceding paras, the
questions raised in the appeals are answered against
the revenue and in favour of the assessee. Hence the
appeals stand dismissed."
6. No amount of argument could be advanced to persuade us
to take a different view than the view taken by the Kerala High
Court. Thus, we find no reason to entertain this appeal. There
exists no substantial question of law which necessitated this Court
to admit the appeal.
7. The appeal is accordingly dismissed. No costs.
Interlocutory applications, if any pending, shall also stand
closed.
_____________
Sujoy Paul, J
_______________________________
Namavarapu Rajeshwar Rao, J
27th June, 2024
Myk/Tsr
