Punjab National Bank Vs Commissioner of Central Excise & Service Tax (CESTAT Chandigarh)
The CESTAT Chandigarh allowed the appeal filed by Punjab National Bank against the order dated 15.02.2018 of the Commissioner (Appeals), Ludhiana, which had upheld the lower authority’s order disallowing CENVAT credit of Rs.35,31,531 availed on insurance premium paid under the Deposit Insurance and Credit Guarantee Corporation Act, 1961. The appellant submitted that the issue stood settled by the Larger Bench decision in M/s South Indian Bank, a Principal Bench decision in the appellant’s own case, and the Chandigarh Bench decision in State Bank of Patiala.
The appellant also contended that the disputed credit had been distributed by its Head Office as an Input Service Distributor (ISD), while no show cause notice had been issued to the ISD. The Tribunal observed that the Larger Bench had held that registration with the Deposit Insurance Corporation and payment of insurance premium are necessary for a bank to render “Banking and Other Financial Services” and that the insurance service received from the Deposit Insurance Corporation constitutes an input service eligible for CENVAT credit. Holding that the issue was squarely covered in favour of the appellant, the Tribunal set aside the impugned order and allowed the appeal, without examining the remaining contentions.
